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Majority of generic drug ingredients produced in Asia – study

Industry players warn bringing production home may be a complicated process, saying higher labour costs and tougher environmental standards make it impossible to compete with Asian suppliers on price

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Two-thirds of the active ingredients needed to make generic drugs are manufactured in Asia, a study showed on Wednesday, the latest evidence to underscore Europe’s reliance on foreign imports for its medicines.

European governments were rattled at the start of the coronavirus outbreak when India, one of the biggest producers of drug ingredients, banned exports of certain products relevant to the pandemic, prompting concerns about disruptions to supply chains and a shortage of medicines.

Although those fears were largely unfounded, European Union health ministers have vowed to boost local drugs production to safeguard against future bottlenecks.

The study by German generics lobby group Pro Generika analysed the global production of 565 active pharmaceutical ingredients (APIs) and found 63 pe cent of the quality certificates, which grant them suitable for use in medicinal products, were held in Asia, up from around 31 per cent in 2000.

Price pressure and lower regulatory requirements have led to a shift in drugs production from Europe to Asia over the past two decades, Pro Generika said.

More than 80 per cent of Asia’s certificates are held by manufacturers in India and China where the majority of producers are concentrated in just a few states and provinces, the study found. For more than half of the APIs, there are only a handful of manufacturers worldwide.

Europe holds 31 per cent of API certificates, down from 59 per cent in 2000 with producers mainly in Italy, Germany, Spain and France focussing on ingredients with low sales volumes that are complex to manufacture.

Spooked by the pandemic, France in June announced plans to bolster domestic production of medicines with President Emmanuel Macron pledging 200 million euros ($236 million) to help domestic research and manufacturing of medicine.

Austria is also investing money to shore up production at a an antibiotics plant owned by Swiss drugmaker Novartis’s Sandoz division in Tyrol.

Industry players warn bringing production home may be a complicated process, saying higher labour costs and tougher environmental standards make it impossible to compete with Asian suppliers on price.

Stefan Oschmann, Chief Executive, Merck KgaA, told Reuters drug shortages at the start of the pandemic were minimal and it was “unrealistic” to repatriate large parts of the production chain to Europe.

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