SOURCE / ECONOMY
Western drug firms bypass India, buy APIs directly from China
Published: Jun 01, 2021 08:46 PM
A worker installs beds at a 500-bed COVID-19 hospital in Jammu, the winter capital of Indian-controlled Kashmir, May 24, 2021. (Str/Xinhua)

A worker installs beds at a 500-bed COVID-19 hospital in Jammu, the winter capital of Indian-controlled Kashmir, May 24, 2021. (Str/Xinhua)



Chinese pharmaceutical producers have seen a rising trend of inquiries from clients in the US and some European countries that used to go to India for medicine supplies, as the ongoing coronavirus epidemic in India posed production and logistics disruptions.

Several domestic leading suppliers of active pharmaceutical ingredients (APIs) told the Global Times on Tuesday that direct orders from the US and European countries have increased by 10-20 percent since the new wave of COVID-19 outbreaks in India, which forced many factories to halt production.

A large API producer based in East China's Shandong Province has also seen orders from the West increase by 10-20 percent since April.

"The demand for ingredients for cardio-cerebrovascular disease and diabetes is rising sharply because of the production and logistics disruptions in India," said the manager of the company. 

With the ongoing outbreak in India, the changing API market has come into focus. India's supply chain for exporting drugs to Europe and elsewhere is now in a state of collapse as pharmaceutical makers have largely shut down due to lockdowns, according to media reports.

Such a sudden hit to the supply chain has caused hurdles for all industry participants, including Chinese API suppliers.

A manager surnamed Zhang with a major enterprise in the pharmaceutical industry in East China's Zhejiang Province told the Global Times on Tuesday that India's import demand for drugs fell 30-40 percent compared with the same period last year.

Zhang said that since the second round of outbreaks in India in April, many big cities in the country have been locked down, and workers have been asked to work from home because of the lockdown. This has affected their logistics and the delivery of goods to local customers.

"We previously sent large amount of cephalosporin and penicillin intermediates to India to make cephalosporins, but now we are clearly feeling a drop in demand in India after the production disruption in many parts of the country," Zhang said.

To cope with this situation, Zhang said that some European and US customers have managed to bypass India and contact his company directly in an attempt to get medicines or ingredients to make those medicines.

India and China are the two major sources of the world's API supply, and they together account for about 21 percent of the global supply chain.

Some media reports suggested that if the outbreak in India leads to a tight supply of APIs, it is likely to result in a transformation of the supply chains for the global API industry.

While the new demand from the West poses a challenge for Chinese API companies, it is positive for the supply chain upgrade of China's pharmaceutical industry, Wang Xuegong, deputy director of the China Pharmaceutical Enterprises Association, told the Global Times on Tuesday.

"Chinese companies have the ability to partially replace Indian drug processing, but it is not clear whether they can completely replace the Indian processing chain in the short term," said Wang.

Business representatives said that the proportion of drugs imported directly by Europe and the US will increase.

"European and American companies have also come to understand that they cannot put all their eggs in one basket or attach too much importance to the supplies from one country, so they will consider more alternatives," said Zhang.


blog comments powered by Disqus