TOKYO, Feb. 28, 2022—It’s not limited to garment, toys and industrial products: China is looming as the global supplier of active phrmaceutical ingredients (API), its share probably rising to record levels in line with its aggressive exports of COVID-19 vaccines. Japan, which relies on foreign products for almost everything, is a case in point: Of 8.5 trillion yen ($74 billion) worth of prescription drug production in 2020, imported API represented 5.9 trillion yen, or about 7/10th. Of the total, China and Korea accounted for 2/10th of generic pharmaceuticals, and China represented about half of total generics, followed by Italy and India.
The Japanese Ministry of Health Labor and Welfare in March 2021 identified 506 APIs as priority materials for stable stockpiling and supply, a policy sparked by acute shortages of some APIs the previous few years, and earlier in June 2020, it unleashed a program of domestic manufacturing of some APIs for which Japan’s dependence on foreign products are unusually high.
Is the program yielding results? Don’t count on it too much, warns Takuya Shinohara, a healthcare analyst with NLI Research Institute, an arm of Nippon Life Insurance Co., in an interview with The Prospect.
‘There aren’t too many products and technologies that Japan can excel over other countries,’ Shinohara said. ‘I doubt if the pharmaceutical industry stands out as an exception’ to many Japanese sunsetting technology and product trends. Over the past two decades, MHLW and the industry sought to develop blockbuster biopharmaceuticals. The result to date is essentially nil. ‘It’s not easy to move away from China as production and supply base,’ he said.
Meanwhile, Xi Jinping’s China, based on the China Manufacturing 2025 initiative, is strategically pursuing biopharma and advanced medical device R$D. Partly as a result, China has become a world-class supplier of API, pain killers, vitamins, antibiotics, antipyretics and other common drugs.
The U.S. reliance on Chinese pharmaceuticals is still not as high as Japan’s, according to the U.S.-China Business Council report, putting the China API share at 7 percent directly coming from that country in 2019 and 12 percent indictly via third countries. But the Chinese antibiotics API accounted for 36 percent of the U.S. antibiotics market, the same share as of the EU. More recent data and reports were not available as of this writing.
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