Although the global chemical raw material drug (also known as active pharmaceutical ingredient, API) industry is highly competitive, manufacturers face multiple challenges including price and cost pressures, and increasingly stringent quality and environmental related regulations, the industry is still generally optimistic about the prospects. .
According to Enrico Pollostero, senior expert and vice president of the consulting company based in Brussels, the global chemical raw material pharmaceutical industry is currently estimated to be worth US$60 billion, including self-produced and self-manufactured products. At 60% of the total, the global API market value will continue to grow at an average annual rate of 3% to 4%. The average annual growth rate of production will be faster, and is expected to be 5% to 6%. However, the increase in different products will increase. There is a big difference in speed.
Despite this, for the global API industry, the overcapacity and increased competition have caused prices to fall as a real problem. From a worldwide perspective, the industry consolidation drama with the main purpose of reducing costs is gradually culminating. He further pointed out that Western pharmaceutical companies have chosen to withdraw or merge or transfer production bases to developing countries because of considerations of cost and environmental pressure; China and India, as the “rising stars†of raw material drug producing countries, have become increasingly The more stringent management regulations are introduced, the same industry consolidation is inevitable.
Siegfried, a Swiss manufacturer of bulk pharmaceuticals, pharmaceutical intermediates and finished pharmaceutical products, said that the global API industry consolidation is necessary because it allows companies to reach economies of scale while also having a certain amount of idle capacity. In order to respond quickly to customer needs. The company's chief executive, Siegfried Hanko, pointed out that the key to industry consolidation is to reduce costs and enhance the competitiveness of companies. Siegfried’s sales revenue in 2011 amounted to 328.1 million Swiss francs (approximately US$353.2 million), an increase of 4.4% over 2010, of which the API business realized sales revenue of 280 million Swiss francs, and in 2010 it was 252.2 million Swiss francs. .
Despite facing many challenges, raw material pharmaceutical manufacturers are still optimistic about the future development prospects. Some companies even accelerate the implementation of expansion.
In July last year, Siegfried announced that it will build a new raw material production facility in Nantong, China. The first phase of the project will produce APIs and pharmaceutical intermediates, which are expected to be put into production in 2014; after the completion of the second phase of the project, the plant will also Production of finished pharmaceutical products. In May last year, Siegfried also acquired a privately-held American Alliance Medical Products Company (AMP) for US$58 million. Siegfried said it will continue to look for the possibility of acquisitions in the API sector.
In India, Granules India achieved sales of 6.53 billion rupees (US$121 million) in the fiscal year ending March 31, 2012, of which API business sales revenue was 1.81 billion rupees. Compared with the fiscal year, they increased by 37% and 20% respectively. The company said it will continue to expand its API business in India. In the past year, without increasing capital expenditure, the company’s API production capacity has increased by more than 15%. It is expected that the capacity will be further increased this year.
Last year, Grenelles India also established a joint venture with a 100% subsidiary of Ajinomoto, Belgium, in Visakhapatnam, India, 50:50. It is expected that the joint venture will begin production of pharmaceuticals in 2013. Intermediates and APIs. In addition, the Glen Nulles company in India is also expanding its business abroad. For example, it has established a joint venture with China Hubei Baike Pharmaceutical Co., Ltd. to produce APIs and finished drugs. The joint venture company has achieved value increase through cooperation with customers and has more and more product categories.
In terms of API regulations, the US Congress passed the 2012 Generic Drug Usage Bill (GDUFA) on July 9, 2012 and is expected to be officially implemented in 2013. The act requires the global generics industry to pay approximately US$15 billion in generic drug royalties to the US Food and Drug Administration (FDA) to help the US FDA complete the approval of generic drugs more efficiently (as soon as possible within 10 months). This ensures that the public can obtain safe and effective generics faster. The new drug bill emphasizes full supervision from point to point, that is, the whole process from the production stage to the consumer will be under the supervision of the FDA.
The Gleneagles company in India believes that for most pharmaceutical companies, the implementation of GDUFA will increase business costs, but at the same time it also has the greatest benefit on the other hand, that is, to eliminate low-quality API manufacturers. In this process, the overall market share of raw material medicine manufacturers in China and India will not be reduced, and companies with good quality awareness will even gain more market share. In addition, the implementation of GDUFA helps to shorten the time for approval of new drugs, thereby accelerating the commercialization of new drugs. Sigma-Aldrich also stated that the GDUFA Act will have a significant impact on the global and U.S. API industries, and will help create a fair competitive environment for US and global API manufacturers.
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