EU’s strong dependence on China in drug production

According to the report of the international group Tasnim news agency, weekly “Spiegel” wrote in an article: “During the last 20 years, drug production has been increasingly transferred from Europe to Asia, which has led to Germany and Europe’s heavy dependence on foreign countries – and for some time to frequent shortages.” In particular, the production of active ingredients for some low-cost drugs has migrated to Asia over time over the past 20 years. These include well-known substances such as paracetamol and ibuprofen, as well as the antibiotic and broad-spectrum amoxicillin.

In 2000, about two-thirds of generic active substances in Europe And a third was produced in Asia. According to a study by management consultant MundiCare on behalf of the industry association Pro Generics, this ratio has now reversed: two-thirds of active ingredients now come from countries such as China or India.

This review examined 560 active ingredients in 2020 and found that 93 of these active ingredients are only produced outside of Europe. As is often the case, the reason lies in the costs: generics come to the market mainly because of their low price, and the competition is fierce.

Of course. Shortages and shortages in Germany and Europe, such as tamoxifen and antipyretic syrup last winter, were mainly due to the withdrawal of generic manufacturers from the market. Supply chain problems exacerbated the problem. However, we cannot confirm that the current difficult economic conditions in China are the reason for the shortage here.

However, given China’s important role in the entire supply chain Medicines, the problems in this country at least partially contribute to the shortages. Beijing’s zero-covid policy has severely disrupted the supply chain, and China’s economy has been recovering since the end of the pandemic, but much more slowly than expected.

But China not only full generics of ibuprofen but in many places it also produces the active ingredient ibuprofen, which is then made into a pill or fever reliever in India or the United States. According to Daxue Consulting in Beijing, about 40% of the world’s active pharmaceutical ingredients are produced in the People’s Republic of China. About 70% of all medicines produced in Europe and Japan contain the active ingredients of the People’s Republic of China. It produces a lot of antipyretics, but the conditions in this country are not the same as in China. India has to import many parts especially from China. This is one of the reasons why manufacturing costs in India are 20% higher than in the People’s Republic.

According to a 2021 study by RIS think tank in Delhi, India 90 Up to 100% depends on China for some important active ingredients such as paracetamol, penicillin, vitamin B12 and ibuprofen. In other words: India produces generic ibuprofen for the global market. But ibuprofen itself – and thus the important active ingredient – almost always comes from China.

One ​​of the scientists of the review says: The dominant position of the People’s Republic of China in active ingredients is mainly Due to cost-effective manufacturing options in China with proven and large production facilities, relatively lower energy costs and less stringent environmental policy. However, Beijing is currently increasing environmental regulations for this sector. Severe environmental pollution caused by the production of active substances and their chemical compounds was one of the reasons why Europe was happy to hand over this sector to Asia.

Japanese newspaper Nikkei Asia to study Management consultancy PwC in France pointed out that every production step in the production of active ingredients relies on technologies that are potentially harmful to the environment. Therefore, the proper management of hazardous waste and ensuring safety is costly for companies.

Therefore, China’s reasonable environmental policy in this sector increases the costs of global drug production. . For example, when Anhui Bayi Chemical, a producer of nitrochlorobenzene – the main precursor to the pain reliever paracetamol – was forced to close its plant at the end of 2020 due to environmental concerns, this led to a sharp increase in the price of paracetamol. From the United States and the European Union to India and Japan, governments are now increasingly looking for ways to ensure greater independence in the drug supply chain, and more autonomy in the field.