This article is from the public number: Zixiangnet (ID: passagegroup) , author: Fu Rao

India, as the largest country of generic drugs, its exports are worthThe world ranks 13th, but the export volume ranks third, which plays an important role in the world’s pharmaceutical supply. However, behind Indian generic drugs, China’s APIs are highly dependent. Recently, the Indian government also dispatched a special plane to purchase APIs in China.

In the past three years, Indian pharmaceutical manufacturers have imported close to 70% of their APIs from China.

In the beginning of 2020, the new crown virus attacked “China, workers stopped production, factories stopped production, and the manufacturing industry fell into a shutdown, affecting the world. The affected industries are starting to rethink. Is the world too dependent on “Made in China”?

“World Pharmacy” India, while responding to the crisis of drug substance shortages, has also begun to examine how to do so in order to find a balance between costs and risks.

The world pharmacy is in a hurry

“I purchase raw materials from the medicinal materials markets around the world, send them to factories in Jingzhou for purification, and then export them abroad. The largest orders come from India.” Bruce, who is doing a foreign trade in APIs in Hubei, told us.

Affected by the epidemic, Bruce trapped in his home in Hubei was helpless. “I’m in Wuhan, and I can’t leave the house. The medicinal materials trading has stopped, the factory has not been at work, the raw materials can’t go out, and the customers haven’t ordered. “

India on the other side of the “world pharmacy” has also fallen into crisis because of the interruption of the supply of bulk drugs (bulk drug & APIs) . Inventories have been underpinned by Indian drugmakers less than June, waiting for APIs from China.

To make matters worse, after the Indian government announced on March 11 that all foreigners are banned from entering the country, it issued a decree on March 13 prohibiting the shipment of Chinese APIs to India.

In order to ensure the stockpiling of key APIs, on March 4, the Indian government began banning the export of 26 APIs and pharmaceuticals, including several common antibiotics such as paracetamol, tinidazole and erythromycin, as well as the hormone progesterone and Vitamin B12 accounts for 10% of total exports.

India’s ban has severely affected the rest of the world. For the United States and Europe, they may experience some drug shortages in the next two to three months. The US Food and Drug Administration (FDA) issued a warning and compiled a list of drugs, listing 15The source of raw materials for 0 drugs reminds pharmaceutical companies to look for alternative sources of raw materials outside China and India in advance.

China is one of the few countries in the world capable of producing all chemical raw materials and has become the world’s largest producer and exporter. The WHO estimates that China’s API production accounts for about 20% of global output.

India is the second largest market for pharmaceutical exports in China (The United States is the largest market) , according to reports, in 2019, 68% of India’s total API value comes from China. Some people in the industry have pointed out that India’s dependence on China’s APIs for 80% to 90% of key medicines (such as statins) .

Trapped Hubei Pharmaceutical Merchants

Hubei, which has been most affected by the epidemic, is an important part of the API supply chain.

In 2018, the export of western medicine in China’s major provinces, data source: China Chamber of Commerce for Import and Export of Medicines and Health Products according to customs statistics

From the data point of view, Hubei is not a big province for API production. However, the most productive JiangTo operate in the Zhejiang and Shanghai regions, migrant workers in the surrounding provinces cannot be separated. According to the Economic Times of India, of the 10 million employees in China’s pharmaceutical industry, about 3 to 4 million live in Hubei and surrounding provinces.

Bruce is one of those 4 million practitioners. He is based in Wuhan and is engaged in the foreign trade of bulk drugs. On the one hand, he purchases plant raw materials around the world and sells them to API processing plants; on the other hand, he also helps long-term factories to take overseas orders. Most of the customers are Indian pharmaceutical companies.

In this stretched Spring Festival, his business is completely stagnant.

“I ordered a batch of goods overseas years ago and did not have time to send it. Now that the epidemic is out, the logistics in Hubei Province only transport key materials, and they dare not let the other party send me goods.”

The bulk drug business is a bulk cargo transaction, and plant raw materials are purchased by ton. Hoarding of goods means that funds cannot be turned around. Trapped at his home in Wuhan, Bruce had no way of shutting down his business.

Bruce tells us that there are two types of raw material sources, one is chemical synthesis, and the other is plant extraction. He is engaged in the trade of plant raw materials.

The supply chain of plant APIs is longer than that of chemical APIs. Bruce needs to go through the medicinal materials market and collect the plants from the most upstream plants. Medicinal Material Company) purchase plant raw materials in hand, transport the raw materials in tons to the processing plant, and obtain 1% to 10% of the original weight of purified raw materials. He told us: “Pharmaceutical processing has high requirements on purity. The proportion of plant ingredients that can purify effective ingredients for different varieties ranges from 1% to 10%.”

The difficulty of this business is that Plant-derived APIs are non-standard products, high inventory costs, and unstable demand. Bruce’s trade cycle is longer and the risks are greater.

Usually, he confirms the order and letter of credit after (Letter of Credit, a form of credit for cross-border transactions) Before you start purchasing by volume.

Purchasing is also a technical task. Bruce needs to judge the quality of plant raw materials based on experience. (that is, it is speculated that plants can purify effective medicinal ingredients