Why API manufacturing companies almostly in China?

What is API?

API mainly refers to related products from basic chemical raw materials to chemical-pharmaceutical preparations, which are mainly divided into medical intermediate and chemical API.

The medical intermediate is a material produced in the process steps of the API and must be sub-transformed or refined to become the API, and it is a chemical raw material. This chemical does not require a drug manufacturing license to be produced. If it is to be used in the synthesis of medicines, the product specification must reach a certain level before it can become a qualified manufacturer.

Chemical API refers to Active Pharmaceutical Ingredient (API), which is intended to be used in any substance or mixture of substances in the manufacture of pharmaceuticals, and becomes an active ingredient of pharmaceuticals when used in pharmaceuticals. Such substances have pharmacological activity or other direct effects on the diagnosis, treatment, symptomatic relief, management, or prevention of disease, or can affect the function and structure of the body.

A chemical API is an active ingredient that is used to treat certain diseases and is directly used in the production of preparations through the related review and approval of the pharmaceutical administration department; a pharmaceutical intermediate is the key raw material for the production of chemical API.

API Market Overview

In the chemical API industry, developed countries such as the United States and Europe occupy a dominant position in the field of patented APIs with high added value by virtue of their advantages in research and development, production technology, and intellectual property protection; while China and India rely on cost advantages to occupy an important position in the generic drug API market.

As China, India, and other emerging market countries continue to increase investment in R&D, improve production technology, improve process level, and invest in improving production equipment to form specialized production lines, some API companies with advantages in technology, quality, and production capacity are gradually participating in international competition, it is also becoming an important supplier in the international market.

API in China

China is a major producer and exporter of APIs. More than 60% of APIs are sold overseas. Among them, API exports account for about 20% of the world’s API market share, but mainly bulk APIs.

At present, China's bulk API industry has a relatively high degree of marketization. China's production technology is mature, the product variety is complete, and the production capacity is sufficient. China is already the world's largest producer and exporter of bulk APIs. Among them, China's antibiotic production level leads the world, and antibiotic APIs account for 30% of the international market.

Linezolid intermediate

Through its language and technological advantages, India took the lead in entering the European and American markets through API, and gradually extended to the field of high value-added preparations, becoming the biggest beneficiary of the previous capacity transfer. But China's API industry is developing rapidly and becoming stronger, mainly due to:

• Complete industrial chain

Mainly including the chemical industry chain, pharmaceutical outsourcing industry chain and venture capital industry chain, etc.

• Technical advantages

The number of graduate students and the number of returnees from studying abroad continues to increase, providing sufficient human resources for the development of the industry.

• Intellectual property protection

China's protection of intellectual property rights is much higher than that of India.

• The advantage of fermented APIs

India's hot climate is not suitable for the production of fermented APIs, while China accounts for 70% of the world's production capacity.

The API market in China is highly fragmented with many players. Most of the companies located in Hebei, Shandong, and Northeast China are large state-owned enterprises, while the rising API production bases in Suzhou, Zhejiang, and other provinces have strong advantages in the export market.

About Us

Sandoo Pharmaceuticals and Chemicals Co., Ltd was established in 2009, with a creative and active team, located in Ningbo, China.

We have specialized in exporting and importing pharmaceutical intermediates and chemical products as well as API for more than 10 years, covering more than 10 countries.

We have a fully equipped research facility to support Sandro's internal supply chain and offer custom R&D services. We are supported by all kinds, including FDA-approved, GMP as well as GMP-like sites.

Our facilities are designed to comply with ICH 2022 working draft guidelines for quality standards. Always being modest, we learn and become experienced and professional with customer support.

To be harder, faster, stronger, and better, to win invaluable trust from every customer.

Sandoo