Industrial scale of China's API has been ranked first in the world. But the excess capacity has intensified thus leading to frequent price wars. At the same time, Chinese enterprises also face anti-dumping resistance in the international market.
Chinese pharmaceutical raw materials companies are transforming by three ways: actively develop new products and expand the industrial chain, mergers and acquisitions to consolidate the position in the market segments, production lines upgrading to improve product quality. In future, the bulk drugs industry will focus on low-end transformation for multi-level product system. The raw material drug companies should know clear about their positions according to their own conditions to avoid blindly following the trend. The Government should also further strengthen the supervision and guidance.
Chinese API industry overcapacity situation is increasingly serious. The bulk drug substance such as penicillin, glutathione, vitamin barriers entry is relatively low, a few years ago, tends to excess capacity in recent years, production can accelerate the trend of expansion. This trend has spread to the characteristics of bulk drugs from ordinary bulk drugs, some popular generic drugs, pharmaceutical raw materials could not escape the capacity of rapid expansion, followed by a rapid decline in prices of fate.
Overcapacity led to price wars frequent the same time, also the international market for Chinese enterprises to face anti-dumping resistance. Market price war-prone part of the exports of long-term existence of the trend of increase in volume and the rate of reduction. 2010, exports of bulk drugs in the top 10 species, seven species of the average price fell, the export volume of the fastest growing single varieties of Cardiovascular Drugs price decreases to 96%. Because a lot of raw material drug companies failed to obtain the certification of Europe and North America, mainly in Asia and Africa, sales, cheap Chinese bulk drugs in recent years repeated anti-dumping proceedings in the international market.
Traditional bulk API manufacturers are also actively upgrading of the production line, in line with overseas standards and environmental requirements, improve product quality. The future, the bulk drugs industry will focus on low-end transformation for multi-level product system. Five years, Chinese production of bulk API still has the quality, cost advantages, the basis of the demand for drugs is also growing, still need to meet international standards of bulk raw material drug companies. As part of the leading enterprises to upgrade to high-end products, coupled with an increasingly tight policy environment, part of the resveratrol market will usher in merger integration.
Oligopoly of the characteristically bulk drugs is further strengthen. Many characteristics drugs’ raw material resources are relatively scare. In the market competition, market concentration continues to increase. The raw material drug companies with leading technology enter into the industry chain downstream. That is the rapid growth of generics market. Technology innovation is driven by the API industry. The raw material drug companies should position themselves according to the conditions of their technology, capital to avoid blindly following the trend. In past, pharmaceutical raw materials are developed in large scales. Now there are in the transition to downstream agents. The absence of specialty products and blind development will bring to the preparation areas of overcapacity. Products such as antibiotic agents have fever investments now and the competition will intensify in the future.Source:http://www.cospcn.com
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