China’s intermediates and API sector set growth, say researchers

By Gareth Macdonald

- Last updated on GMT

China’s intermediates and API sector set growth, say researchers
China will keep its position as a leading API and intermediates supplier thanks to recovering global demand and the growth of the generic sector say market analysts.

According to research by IBISWord​ China’s drug raw materials sector – which produces 90 per cent of the world’s vitamin C and 90 per cent of its penicillin - will generate revenue of $46.2bn (€35.4bn) this year, an increase of around 20 per cent on the amount seen in 2010.

The authors attribute the growth to the recovery of the pharmaceutical raw material export market, the value of which is on track to increase 8.4 per cent $19.8bn this year. This contrasts with 2009 when - as a result of the economic downturn -China's pharmaceutical raw materials exports grew just 0.2 per cent.

IBISWord also predicts that, as a leading supplier of raw materials and drug intermediates, China is set to benefit from the growth of the generic medicines market on the basis that manufacturers of non-branded drugs are keen to source the most cost-effective supplies.

This is in keeping with the conclusions of Frost & Sullivan​ which predicted – in a report published earlier this year – that China’s API producers will benefit from the expiration of patents in 2012, when nearly $80bn worth of patented drugs will go off patent,

This will lead to robust growth opportunities and the generic API sector is well positioned to seize them​."

API market

A similar trend is discussed in a report by consulting group Markets & Markets.

The authors predict that price pressures which emerged during the downturn allowed API producers in Asia – and China in particular - to compete with manufacturers in the US and Europe.

There has been a paradigm shift in the use of innovative drugs to that of low-cost API drugs after the economic recession, thereby causing a positive impact on the overall growth of the API market.

The authors go on to say that: “There has been an increase in influence of API players from emerging economies such as India and China after the economic recession. The recession restricted the growth of Innovative sector in developed economies such as the US and Europe, as the Innovative sector requires huge investments.

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