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“The evolving APIs World – Crunches in the global APIs supply chain”.- edition 2021

April 2021

The study outlines the APIs market trend over the last past years, that, in line with the downstream pharmaceutical market, has registered a progressive slowing in the recent past years, due to a series of factors:

  • the so-called “Patent Cliff”;
  • increasing control of the healthcare expenditure in most countries;
  • increasing pressure by Regulatory Authorities all over the world, in terms of product quality and manufacturing procedures;
  • increasing price competition;
  • and last, but not least, the progressive slowdown of the global economic framework, drastically got worse in the year 2020 due to COVID – 19 pandemic, with a negative impact also on a traditionally anticyclic sector, like the pharmaceutical industry.

Synthetic APIs (or better PFCs – Pharmaceutical Fine Chemicals, including both active pharmaceutical ingredients and intermediates) continue to dominate, accounting for approximately 80% of the global APIs market, in spite of a faster increase of the biotech APIs market (for homogeneity reasons, the percentage incidence of the cost of active ingredient on the final cost of the finished dosage form is considered equal for both synthetic and biotech APIs).

Captive APIs market (production and in-house consumption of the API by the pharmaceutical company producing and selling the finished dosage form) accounts for approximately 60% of the global APIs market, and the merchant market (sales to third parties by independent fine chemical companies) for the remaining 40%. The increasing demand for smaller and more complex molecules however is pushing the APIs custom synthesis on a worldwide scale.

In addition, the study focuses on the following points:

  • key market drivers;
  • innovative emerging APIs and therapies: high potent products, orphan drugs for the treatment of rare diseases, ADCs, and so on;
  • market breakdown by geographical area, also considering some smaller, and until now neglected minor Asian countries;
  • analysis of the supply chain: the analysis highlights and evident, elevated and risky dependence of the European and global pharmaceutical APIs supply chain upon China (and India, which however, on turn, is strictly reliant to China as pharmaceutical raw materials’ supplier).

 

The elevated dependence upon Asian countries has progressively increased over the last past twenty years, and, whilst it was already latent in the previous years, has manifested itself in all its gravity in the year 2020, due to the disruption of many Chinese APIs facilities; this has created a “shortage” situation of pharmaceutical raw materials worldwide.

Also the most qualified and best positioned European companies had a proof of their excessive and risky dependence upon the Asian giant as pharmaceutical raw materials’ supplier.

The study also considers and suggest some strategies useful to combat this reliance upon a country, like China, which, what’s more, offers few guarantees in terms of quality standards and eco-sustainability.

A first strategy is “reshoring” (or recall into the original country of manufacturing activities that had been previously transferred into low – cost countries: this strategy has been already adopted by numerous companies, especially in the field of high potent and high-quality products.

In addition, the strategies must target to the introduction of innovative / eco-friendly processes, such as digitation / AI (Artificial Intelligence) technologies, green technologies, or continuous flow technology, whose adoption level in the different geographical areas is analysed in the report. The US are generally leading the adoption of innovative processes.

All this told, what is important however, is that Western companies still, and even more than in the past, hold technical know – how and capabilities to increase their APIs production and sales. Otherwise the risky Chinese dominium is destined to continue in the future years.

Index of contents

Introduction & Report Summary
1. Market trends 2007 - 2020
2. Key market drivers in the future years - opportunities and challenges
3. APIs demand by geographical area
4. APIs supply
4.1. Competitive landscape
4.2. Analysis of the supply by country
5. Major countries competing in the global APIs supply chain
6. How combat China’s dominance 6.1. Reshoring
6.2. Innovative technologies
6.2.1. Digitization technologies
6.2.1.1. The concept of Industry 4.0 technology
6.2.1.2. The Industry 4.0 in the APIs - Pharmaceutical industry’s context
6.2.1.3. Investments in Industry 4.0 technologies by the pharmaceutical-APIs industry
6.2.1.4. Future trends in investments in Industry 4.0 related technologies by the pharmaceutical / APIs industry
6.2.2. Microreactor technology
6.2.2.1. The concept of microreactor technology
6.2.2.2. Global microreactor technology market 6.2.3. Green processes - Biocatalysis
6.2.4. Technologies implementing the efficiency of the pharmaceutical supply chain
7. Ensuring the supply of medicinal products Recommendations of the European Council
8. Conclusions

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