In 2022, China's API Market Will Surpass The Past

Mar 14, 2022

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Source: YATAI YIHE  2022.02.21


API is any substance or mixture of substances used in the manufacture of pharmaceutical products.

 

China is a big producer and exporter of API. In recent years, with the promotion of new medical reform policies and the influence of global order transfer and other factors, the scale of China's API industry keeps expanding.It is estimated that China's API market will exceed 400 billion yuan in 2022.

 

However, while seeing the opportunities, it is also necessary to know that the current domestic API industry's industrial structure, industrial layout, green production level and other problems are still outstanding.Some market analysts point out that API companies face at least two challenges, including technology and cost.

 

First, the challenge of technological renewal

In recent years, the cost of API enterprises is rising gradually, forcing enterprises to speed up technology upgrading.Some head enterprises have been actively exploring automation, intelligent, continuous, miniaturized production, as well as enzyme catalysis, photochemistry and other cutting-edge technology iteration, constantly improve product quality, reduce manufacturing costs.

 

The CONTINUOUS manufacturing guidance issued by FDA clearly encourages API and generic drug companies to use continuous reactions in the manufacture of small molecule drug products to improve product quality and reduce manufacturing costs.

 

The industry believes that in the domestic API industry, continuous production will also become a trend.From batch production to continuous production, API enterprises can greatly shorten the production cycle, improve production efficiency, reduce labor costs, and obtain greater benefits.In addition, from the perspective of environmental protection, continuous production can also reduce the probability of pollution caused by material exposure, and greatly improve the quality of API products.

 

Second, environmental protection cost input

Pharmaceutical industry is a highly polluting industry. In recent years, environmental protection policies have become stricter, which has become the "sword of Damocles" for pharmaceutical enterprises, especially for API enterprises.Under the background of environmental protection tax law, implementation of sewage discharge permit system and normalization of environmental supervision, API enterprises need to make preparations, including increasing investment in environmental protection and purchasing equipment.

 

It is understood that some powerful head API manufacturers have increased the relevant investment, such as Huahai Pharmaceutical, APELOA pharmaceutical and other enterprises have reached 0.5-1 billion yuan of environmental protection investment.

 

And some small and medium-sized enterprises that cannot meet environmental standards are gradually eliminated by the market.According to incomplete statistics, a total of 17 pharmaceutical companies were punished for environmental protection violations in 2021, many of which were API manufacturers.This also reminds API enterprises that they should attach importance to the concept of green environmental protection, more strictly fulfill the obligation of environmental information disclosure, and fulfill their responsibilities in environmental protection.

 

Environmental protection cost is a big difficulty for small and medium-sized API enterprises, especially the high cost of environmental protection equipment has brought heavy burden to many enterprises.The Notice on The Implementation Plan of Promoting the High-quality Development of API Industry clearly states that by 2025, China will develop a number of high value-added and high growth varieties and break through a number of green and low-carbon technological equipment.With the acceleration of API industry upgrading, the industry is expected to seize the opportunity to create more green, low-carbon and economic equipment to help the high-quality development of the domestic API industry.

 

conclusion

In general, under the trend of technological upgrading, energy saving and environmental protection, the low-end capacity of the domestic API industry will be cleared at an accelerated pace, and the high-end capacity will be accelerated in the future.

 

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