China's Active Pharmaceutical Ingredient Industry Overview (1)

China's Active Pharmaceutical Ingredient Industry Overview: From the Production Chain to the Global Market in 2024
Active pharmaceutical ingredients (APIs) are the key components of pharmaceutical formulations used for the prevention, diagnosis, treatment, alleviation or cure of various diseases. APIs can be synthesized chemically, extracted from plants, or manufactured by biotechnology processes, and are further processed into a variety of powders, crystals, extracts, or other forms to be used as raw materials in the pharmaceutical industry.
The definition of APIs in the ICHQ7 guidelines is any substance or mixture of substances intended to be used in the manufacture of a medicinal product and that, when used in the production of a medicinal product, becomes an active ingredient of that product.
The API production chain involves upstream basic chemicals and agriculture, including basic chemistry, plant cultivation, animal breeding, and some pharmaceutical intermediate preparation; midstream API production mainly involves chemical synthesis, plant or animal extraction, microbial fermentation, or other modern biotechnology processes; and downstream chemical formulation involves the conversion of APIs into final pharmaceutical formulations that can be used by patients.
In the production chain, API manufacturing requires high technical requirements, and is also affected by fluctuations in upstream raw material prices and downstream market demand. Generally, the gross profit margin in the chemical pharmaceutical industry increases from the upstream to the downstream segment, with the API gross profit margin lower than that of chemical inhibitors, but higher than that of intermediates.
Looking forward to the year 2024, China's API industry is expected to maintain steady growth, driven by domestic and international market demand. As the world's largest producer of APIs, China has a well-established production chain. As China elevates its domestic technological and regulatory standards, the emphasis on quality and safety will remain high. Furthermore, China's active involvement in global cooperation, such as the International Council for Harmonisation (ICH), is contributing to a more harmonized and standardized regulatory environment worldwide.
Going forward, the Chinese API industry is expected to continue its expansion in both domestic and international markets, driven by pharmaceutical innovations and an aging population's increasing demand for medicines. As China increases regulation and quality control, its API exports are expected to grow while complying with international standards. With the support of favorable policies, technological advancements, and international collaborations, China's API industry is set to thrive in the near future.