International Pharmaceutical Supply Chains Include Active Pharmaceutical Ingredient (API) Manufacturers, Pharmaceutical Intermediate Manufacturers, and Pharmaceutical Excipient Manufacturers All of Which Can Cause Adulterated and Dangerous Pharmaceuticals if Pharmaceutical Supply Chain Fraud Occurs by International Adulterated Drug Whistleblower Reward Lawyer Jason Coomer

International Pharmaceutical Supply Chains Include Active Pharmaceutical Ingredient (API) Manufacturers, Pharmaceutical Intermediate Manufacturers, and Pharmaceutical Excipient Manufacturers All of Which Can Cause Adulterated and Dangerous Pharmaceuticals if Pharmaceutical Supply Chain Fraud Occurs by International Pharmaceutical Supply Chain Fraud Whistleblower Reward Lawyer, International Adulterated Drug Whistleblower Lawyer, and International Pharmaceutical Executive Whistleblower Reward Lawyer Jason S. Coomer

Pharmaceutical suppliers of raw materials to the pharmaceutical industry include suppliers of active pharmaceutical ingredients (APIs), intermediates, and excipients.   It is the United States Food and Drug Administration's expectation that current good manufacturing practices (CGMP) be used for the manufacturing, processing, packing, or holding (i.e., storage) of active pharmaceutical ingredients (APIs), intermediates, and excipients.  Further, the FDA recommends that laboratory controls should include the establishment of scientifically sound and appropriate specifications, standards, sampling plans, and test procedures to ensure that raw materials, intermediates, APIs, and containers conform to established standards of quality and purity.

Traditional West European and North American API Manufactures have been Replaced by Indian API Manufacturers and Chine API Manufacturers

The active pharmaceutical ingredient (API) market is very competitive with many producers with many API manufacturers specializing and targeting their manufacturing based on joint venture contracts, large pharmaceutical company demand, governmental procurement contracts, regional resources and availability of supplies, and other logistical and profit driven factors. Driven by profits and lower costs, API manufacturing has slowly been shifting from the historical leaders in Western countries to newer firms in India and China.  

The overall API market was valued at $101.08 billion in 2010, and is expected to grow at a CAGR of 7.9% from 2011 to 2016.  In 2005, the total world API market was $76B and growing at an average annual rate of 8.2%. The market share held by Indian API manufacturers in the global API merchant market (generic APIs and branded/innovator APIs) was 6.5% in 2005, 12.0% in 2010, and is expected to increase to 22.0% by 2015. India is expected to be the fastest growing API supplier during the next five years and will keep its position above China. 

The market share held by Chinese companies in the global API merchant market (generic APIs and branded/innovative APIs) has risen from 14.2% in 2005 to 19% in 2010. Although China remains the largest API supplier on a global basis, growth rates from 2005–2010 of Chinese API suppliers were less than those of Indian suppliers. China’s share of the Western European generic API merchant market fell from 39.2% in 2005 to 35% in 2010. China’s share of the US generic API merchant market increased slightly from 11.5% to 12.9% in 2010. While Italy still remains the world market leader in APIs destined to sectors such as cardiovascular or the central nervous system, China leads in anti-infective APIs.

As a generalization, Chinese firms have tended to focus on the earlier raw materials stage whereas Indian firms have tended to focus more on the final API manufacturing stage. In many cases, a Chinese firm will make the raw material for a pharmaceutical product and then sell it to an Indian firm who will then convert the raw material into an API. Then, either the same firm, another Indian firm, a global Multinational Corporation (MNC) or a final formulator in a developing country will convert the API into a final formulation product ready for the market. However, the situation is rapidly evolving as both China and India gain new manufacturing skills. Not surprisingly, while many Western API firms have been winding down and/or consolidating their manufacturing capacity, many firms in India and China have been increasing capacity to meet the growing demand.

Traditional West European and North American Excipient Manufacturers have been Replaced by Indian Excipient Manufacturers and Chine Exipient Manufacturers

Pharmaceutical excipients play an important role in pharmaceutical formulations by adding functionality or by facilitating the processing of a drug product.  Recent trends in the pharmaceutical excipient manufacturer industry include: geographic expansion and select investment in emerging markets.  The global market for excipients totaled $4.9 billion in 2011. That value is projected to reach more than $6.7 billion in 2016 after increasing at a five-year compound annual growth rate (CAGR) of 6.5%.   The global excipients market can be broken down by material type into three segments – organic, inorganic, and USP (U.S. pharmaceutical) water.   The segment made up of organic excipients held a value of nearly $4.6 billion in 2011, and is expected to grow at a CAGR of 6.6% to reach a value of nearly $6.3 billion in 2016. The segment made up of inorganic excipients, worth $268 million in 2011, should be worth $350 million in 2016, a CAGR of 5.5%. The USP water excipients segment totaled $92 million in 2011, and in 2016 that value should reach $114 million, a CAGR of 4.4%.

Increased globalization and strategies for securing the supply chain are important issues for excipient producers. The International Pharmaceutical Excipients Council (IPEC) expanded into China in July 2008 with the formation of IPEC–China.

Regulations for Pharmaceutical Ingredients and Raw Materials

Regulation for pharmaceutical ingredients and raw materials can be complicated and can change depending on where the pharmaceutical ingredients are coming from and where they are being sold.  As such, an international producer from China or India that manufactures an API or excipient that sells it to a final formulator in the United States can be subject to the regulatory authorities in China and the United States.  The API or excipient manufacturer should be required to produce the product to the quality standards enforced by the Chinese authorities as well as will be required to meet USFDA standards as well.

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