Chinese peptide company "Rush purchase" of Chinese api

This is the novel coronavirus pneumonia epidemic (COVID-19) global pandemic, and the real scene of the global pharmaceutical industry chain operation.

The epidemic situation is like a “Butterfly” impact, which has aroused a thousand waves in the global economy, and the pharmaceutical industry directly related to the epidemic response is at the top of the wave. Pharmaceutical manufacturers in the upstream of the pharmaceutical industry have felt the change of market wind direction early.

“Novel coronavirus pneumonia has a potential negative impact on our supply chain and global economy,” he said. Malincro pharmaceutical company

The production stagnation and trade control caused by the spread of the epidemic directly caused the obstruction of the global API supply chain. As a “world pharmacy”, India has implemented a national blockade since March 25, which has exacerbated the tension in the global pharmaceutical supply chain.

The European Union, the United States and other governments have begun to deal with the risk of drug shortage in the epidemic. In China, where the epidemic peak has been successfully broken through, more and more API manufacturers are returning to production, and various APIs with “made in China” labels have opened the global industrial chain.

Demand Surge

From the perspective of industrial chain, the pharmaceutical industry involves three links: pharmaceutical raw materials, pharmaceutical R & D and manufacturing, and pharmaceutical circulation. The upstream of Western medicine industry chain is usually used as active pharmaceutical ingredient (API).

Crude drug is a kind of chemical substance which has certain pharmacological activity and is used to produce preparations. The intermediate products in the production of API are called pharmaceutical intermediates (also known as chemical intermediates). Only by processing finished pharmaceutical preparations can APIs be used for clinical application.

Novel coronavirus pneumonia novel coronavirus pneumonia have a fever in the world, and paracetamol, including Panadol, has been introduced into France and Australia in the treatment of new crown pneumonia with fever as its main symptom.

Panadol, which is on sale in Australian drugstores, has been snapped up. To this end, Australian health minister Greg Hunt announced on March 19 that “the children’s version of Panadol is no longer available on the regular shelves. People who want to buy medicine have to prove that they really need it before they can buy it. “

With the increasing demand for drugs at the end of the industrial chain, the incremental demand is conducting upward along the industrial chain. The outbreak of API orders is a direct manifestation of the transmission of market demand to the upstream.

As the world’s largest producer and exporter of API, China is facing up to this wave of market demand. “Isobath” reporters interviewed and asked a number of API manufacturers in Zhejiang, Shandong, Hebei, Anhui and other places, all of which responded that the volume of export orders had increased since the beginning of this year.

Novel coronavirus novel coronavirus pneumonia novel coronavirus pneumonia diagnosis and treatment program will also enhance the international market demand for related drugs including API, and the demand for other drugs directly related to the new crown pneumonia will also increase, and the export of our related raw materials will be in a short outbreak. Zhu Renzong, Deputy Secretary General of China Chamber of Commerce for import and export of medical and health products, analyzed.

In fact, novel coronavirus pneumonia has been affected by the epidemic situation in recent years, and the demand for API in the international market has been booming.

According to the statistics of China Chamber of Commerce for the import and export of pharmaceutical and health products, China has exported 10.1185 million tons of API in 2019, reaching 189 countries and regions in Asia, Europe and North America, with an annual export volume of 33.683 billion US dollars.

Among them, India is the main destination of China’s API industry chain. In 2019, a total of 807900 tons of API products will be exported from China to India, with a value of US $5.653 billion, accounting for nearly 17% of China’s total API exports.

For India, API from China is of great significance. Statistics show that 70% of India’s API comes from China, and the proportion of pharmaceutical intermediates is higher.

However, under the novel coronavirus pneumonia outbreak and spread, the global line of APIs to India is no longer as usual.

Supply is blocked

On the evening of March 24, Indian Prime Minister modi announced in a speech to the whole country that India would implement a complete blockade for 21 days from 0:00 on the 25th. People are not allowed to go out without emergency affairs. Schools, factories, office places, shopping, catering and entertainment places are all closed. Public transportation such as buses, subways, flights, buses and taxis are also suspended. Only part of the transport capacity is reserved for medical and other emergency personnel.

As a “world pharmacy”, the impact of India’s national blockade on the operation of the global pharmaceutical industry is even more worrying.

According to statistics, India’s chemical drug production has ranked the fourth in the world and is the largest supplier of generic drugs in the world. India produces nearly 20% of the world’s generic drugs. India exports medicines to more than 200 countries, of which more than 60% are exported to the United States, Europe, Russia and other countries.

According to the statistics of Indian customs, from April to December 2019, the export of pharmaceutical preparations and biological products in India reached US $12.018 billion, a year-on-year increase of 14.18%, accounting for 5.03% of India’s total exports, ranking India’s third largest export product. Over the same period, India also exported US $2.957 billion of API and pharmaceutical intermediates, up 5.78% year-on-year.

Since March, India has frequently taken special measures due to the shortage of API inventory.

On March 4, the Indian government began to ban the export of 26 kinds of APIs and pharmaceuticals, including common antibiotics such as paracetamol, tinidazole and erythromycin. “Isobath” reporter inquired the Indian customs data and found that most of the 26 kinds of API and preparations restricted by India this time are products with higher export value in previous years.

The total export volume of the above 26 APIs and preparations from April to December 2019 is about 1.9 billion US dollars, accounting for 0.72% of India’s total exports in the same period.

In addition, India’s Ministry of medicine has made plans to establish the API industry utility assistance center to support the API parks to be built by state governments. The latest implementation of the plan is that the Indian government chartered a special plane to airlift 6 tons of API from China to Cipla, a local pharmaceutical company.

On the one hand, the demand for API in the international market continues to increase; on the other hand, production stagnation and logistics interruption caused by the spread of global epidemic situation lead to obstruction of global supply chain of API.

At present, the United States and Europe, which are deeply affected by the epidemic situation, are very worried about the interruption of drug supply chain.

In February 27th, the novel coronavirus pneumonia issued a statement on the impact of the new crown pneumonia epidemic on the supply chain of pharmaceutical companies in the United States by the food and Drug Administration (FDA). China’s novel coronavirus pneumonia is being contaminated by the supply of finished products, which is due to the supply of raw materials from China, according to a statement by a pharmaceutical manufacturer. FDA said there was a shortage of finished products.

At the same time, the FDA identified 20 drugs that only purchased raw materials or finished products from China, and cooperated with relevant pharmaceutical companies to assess whether there was any outbreak

There is a risk of drug shortage. ” In the statement, the FDA reminded pharmaceutical companies to look for alternatives to the API at risk of shortage as soon as possible.

The European Drug Administration (EMA) announced on March 10 that in response to the supply of drugs in the covid-19 epidemic, the European Union has set up a special “EU implementation steering group” to protect patients with the risk of drug supply shortage in EU Member States. “The most important thing is that it is the responsibility of pharmaceutical companies to ensure the continuity of drug supply,” the news stressed.

This includes, for example, appropriate flexibility by drug manufacturers to increase inventories, or to purchase both finished products and APIs at the same time. “

“Due to the increased demand for certain drugs, some member states are experiencing drug shortages,” EMA said in an outbreak Bulletin released on March 24. This is because drugs are used to treat patients with covid-19, or because patients need more drugs than usual. To prevent unnecessary pressure on the supply chain, patients should only accept their usual drug supply. “

trade barrier

In fact, besides novel coronavirus pneumonia outbreak, this is the reason why the global chain of APIs is often interfered by “man”. Trade barriers, including restrictions on exports, often result in the “refusal to sign” of API exported by China.

China is the world’s largest producer of API, and India is one of the world’s largest producers of finished drugs with high pharmaceutical level. India is objectively dependent on China’s API. Therefore, every time India antidumping against China’s API, its local importers and downstream users will have strong opposition. The Indian government should balance the protection of domestic API manufacturers and downstream pharmaceutical manufacturers to find a compromise.

In fact, the Indian government has vigorously supported “made in India” in recent years, and API parks have been built in various parts of India, and Indian pharmaceutical enterprises have also developed upstream. However, it is difficult to change the existing API supply chain pattern in the short term.

According to Zhang Yansheng, chief researcher of China International Economic Exchange Center, “India is a big producer of API and generic drugs, and has a certain share in the global drug supply chain. Under the condition of novel coronavirus pneumonia becoming a global pandemic, the export restriction measures for API are adopted to protect the demand of domestic drugs.

This will not only expand the gap between supply and demand for the global pharmaceutical industry chain, but also promote the tendency of trade protectionism. Such trade barriers will hinder the adaptation of global drug supply and demand. If the gap between supply and demand is further widened, it is bound to cause the price of API to rise, which will further aggravate the tense situation of global anti epidemic drug supply. “

rise in price

The price rise triggered by the mismatch of supply and demand in local market is reflected in the market price fluctuation of several API varieties.

According to the data of boa Hexun, the market prices of several vitamin varieties have risen sharply recently, among which vitamin B1, biotin, vitamin K3, vitamin E, nicotinamide, vitamin D3 and vitamin A have risen the most. On March 5, 2020, the prices were 325 yuan, 325 yuan, 92.5 yuan, 65 yuan, 53 yuan, 107.5 yuan and 330 yuan per kilogram respectively, which were 106%, 86%, 59%, 34% and 18% higher than those on January 20, respectively 、16%、7%。

Under the expectation of price rise of specific varieties, the API plate in the capital market continued to rise.

According to the statistics of Shenwan industry index, the chemical API index fluctuated from 6659.25 on January 2, 2019 to 7999.38 on March 26, 2020, with an increase of 20.12%, while the performance of the whole pharmaceutical and biological industry increased by 9.19% in the same period.

In addition to the novel coronavirus pneumonia epidemic, the global cost of the API industry chain has increased and the cost of raw material drugs has increased.

“The prices of chemical raw materials and chemical intermediates supplied by our upstream chemical enterprises are also increasing recently. In addition to some logistics factors, the cost of purchasing raw materials is also fluctuating.” Lu’an pharmaceutical said.

Zhu Renzong pointed out: “affected by the epidemic situation, flights between countries have been greatly reduced, shipping enterprises have postponed or cancelled some ship times, and land transport quarantine and control measures have increased, resulting in limited international logistics, serious shortage of transport capacity, prolonged delivery time of API, and obvious increase in freight, which is manifested in tight supply of API and rising prices.”

“Isobath” reporter from Shandong, Hebei and other regions of raw material drug manufacturers from interviews, some antibiotics, vitamins, hormones and other bulk drug products sales, often signed long-term orders. The unit price of an order is usually composed of the agreement base price and the flexible range of unit price. Both the buyer and the seller can negotiate and adjust the flexible range of unit price according to the market situation and the quantity of goods at any time.

“We are all long-term strategic partners. When the market is good, we will not ask high prices from customers. When the market is not good, customers will not let us lose too much. ” The person in charge of an API enterprise in Shijiazhuang, Hebei Province, has such an interpretation of the mobile range of unit price.

With the improvement of the epidemic situation in China, the resumption of work and production has been carried out in various places, and the contradiction between supply and demand of API has been alleviated.

According to the latest research report of China Chamber of Commerce for the import and export of pharmaceutical and health products, the rate of return to work in China, including API and upstream chemical intermediates enterprises, is increasing

More than 70% of the total, domestic logistics has gradually returned to normal, the shortage of upstream chemical raw materials has been significantly alleviated, the production capacity utilization rate of API enterprises has been gradually improved, and the delayed foreign trade orders have been delivered for customs clearance and delivery.

Industrial chain integration

In the global industry chain, different levels of APIs often have different routes. There are also two “brothers” in the bulk API of paracetamol, which are characteristic API and patent API.

Regarding their level, the sales director of a pharmaceutical enterprise in Zhuhai, Guangdong Province, said: “the price of bulk API is often greatly affected by cyclical changes in supply, production capacity and price. However, there are certain technical and regulatory barriers to the certification of characteristic APIs, which involve many varieties and are scattered. Therefore, more stable orders can be obtained and sustainable profits can be obtained.”  

However, Dong MI, a listed API company, believes that it is unlikely that API manufacturing will return to Europe and the United States, which involves the migration of the entire upstream industrial chain.

In addition to controlling more initiative, extending the industrial chain has become an important way for more Chinese pharmaceutical enterprises to reduce production costs.

“VC class I API industry is greatly affected by the international situation and block trading, and the cyclical fluctuation is obvious. In addition to the pressure of environmental protection, many companies are also making transformation in API business in recent years, and some API production bases are considering relocation. Enterprises with a complete industrial chain of raw materials and preparations will benefit from price fluctuation of raw materials. ” The head of Shijiazhuang API enterprise said.

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