88% registered APIs imported from China or India

Due to pressure to reduce costs

In 1H, 46% of drugs registered on the DMF were from China, 43% from India…less than 5% from Korea

Amid pressure to reduce costs in the pharmaceutical industry, concerns are growing over the increasing reliance on Chinese and Indian raw material

Amid a surge in the number of drug master file registrations in the first half of this year, the share of raw materials from China and India rose to 88.2%.

 

This is a sharp increase compared to the average of 62.1% share the two countries had during the past 5 years.

 

This is attributed to the large number of previously delayed raw material drug registrations that had been made upon the relaxation of DMF regulations, as well as the domestic pharmaceutical and bio industry's increased use of raw materials from China and India to reduce costs.

 

606 DMF registration from China and India source materials made in the first half of this year...

 

accounts for 88%, which is the highest-ever share According to the Ministry of Food and Drug Safety on the 26th, 687 DMF registrations were made in the first half of this year.

 

Among them, 313 raw materials were from China and 293 were from India.

 

The two countries combined accounted for 606 cases or 88.2% of the total DMF registrations.

 

This is the highest proportion ever recorded for a half-year period.

 

Until last year, the proportion of Chinese and Indian raw materials had never exceeded 75%.

 

The average proportion of Chinese and Indian DMF imports over the past 5 years was 62.1%, which is more than 26 percentage points higher than in the first half of this year.

 

The proportion of Chinese and Indian imports in the DMF has increased rapidly over the past 3 years.

 

After steadily declining since the first half of 2019, the share of Chinese and Indian DMF rose to 55.8% in the first half of 2022 and then began to increase.

 

It reached 69.9% in the first half of last year and 72.2% in the second half.

 

In the first half of this year, it soared to nearly 90%.

 

Pharmaceutical industry's dependence on Chinese and Indian raw materials deepens amid cost pressures The rapid increase in Chinese and Indian DMF is attributed to cost reduction pressures in the pharmaceutical and bio industry.

 

China and India are representative “low-cost mass production bases” in the global raw material drug market.

 

Following the global economic downturn after the pandemic, the pharmaceutical and bio industry in general faced a decline in profitability.

 

As a result, attempts to reduce costs were made, which led to an increase in the use of Chinese and Indian DMF.

 

An industry insider explained, “Domestic pharmaceutical and biotechnology companies are feeling a significant burden from manufacturing costs due to high exchange rates, rising labor costs, and declining profitability.

 

Chinese and Indian raw materials are sometimes almost half the price of domestically produced materials, leading to increased use of imported materials.” Additionally, the relaxation of DMF regulations has further increased the use of Chinese and Indian raw materials.

 

The government eased DMF requirements earlier this year by replacing on-site GMP inspections with the submission of GMP certificates and reducing the administrative processing period from 120 days to 20 days.

 

As a result, imported raw materials for which registration had been delayed were registered en masse.

 

In particular, it is analyzed that the abolition of on-site inspections has led to a significant increase in Chinese and Indian raw materials.

 

In the past, inspections in these two countries were physically difficult, and administrative procedures complex, often causing delays in registration.

 

This year, however, registration became possible with only a GMP certificate, significantly lowering barriers, and leading to a significant increase in the registration of Chinese and Indian raw materials.

 

Domestic raw material share in DMF only 5%, raising concerns about increased dependence on Chinese and Indian products On the other hand, the share of domestically produced raw materials registered in the DMF has decreased significantly.

 

In the first half of this year, the share of domestically produced raw materials registered was only 4.9% (34 cases).

 

This is less than half of the 12.6% recorded in the second half of last year.

 

The share of DMF registrations of raw materials from Europe and Asia also decreased sharply.

 

The share of European raw materials decreased by more than 10 percentage points from 14.5% in the first half of last year to 4.4% in the first half of this year.

 

The number also decreased from 37 to 30.

 

The share of DMF registrations of raw materials from Asian countries other than China and India also decreased from 3.9% to 1.5%.

 

Concerns have been raised that the dependence on raw materials from China and India may become excessively high.

 

If this trend intensifies, it could pose a threat to the stability of domestic drug supply.

 

In fact, during the early stages of the COVID-19 pandemic, export restrictions imposed by China and India directly impacted domestic drug production.

 

A pharmaceutical industry insider stated, “If raw material production becomes overly concentrated in specific countries, it becomes vulnerable to external factors such as export restrictions, logistics disruptions, and sharp exchange rate fluctuations.

 

In the long term, policies are needed to strengthen domestic raw material production capabilities and provide various incentives for the use of domestically produced raw materials.”