Majority of generic drug ingredients produced in Asia - study
BERLIN (Reuters) - Two thirds of the active ingredients needed to manufacture generics are made in Asia. This was the result of a study on Wednesday. This is the latest evidence that Europe relies on foreign imports for its medicines.
Europe was shaken at the start of the coronavirus outbreak when India, one of the largest manufacturers of drug ingredients, banned exports of certain products relevant to the pandemic, raising concerns about drug shortages.
While these fears were largely unfounded, European Union health ministers have promised to boost local drug production to protect themselves from future supply disruptions.
According to the study by the German generics lobby Pro Generika, price pressure and lower regulatory requirements have led to a shift in pharmaceutical production from Europe to Asia in the past two decades.
The study analyzed the global production of 565 Active Pharmaceutical Ingredients (APIs) and found that 63% of the quality certificates that made them suitable for use in medicines were held in Asia, up from around 31% in 2000.
More than 80% of Asian certificates are held by manufacturers in India and China, where the majority of manufacturers are concentrated in a few states and provinces, according to the study. There are only a handful of manufacturers worldwide for more than half of the APIs.
Federal Health Minister Jens Spahn said the pandemic had "painfully" highlighted the risk of strong dependency on a region or country, citing the lack of medical protective masks.
He said Europe must first define which drug ingredients are systemically important and which incentives would best contribute to increasing local production.
He hoped the European Commission would come up with proposals no later than November so that decisions could be taken in the first half of 2021.
DOUBLE SOURCE
Europe holds 31% of API certificates, compared to 59% in 2000, with manufacturers mainly in Italy, Germany, Spain and France focusing on low-volume ingredients that are complex to manufacture.
France has pledged EUR 200 million (US $ 236 million) to boost domestic drug production, and Austria is also investing funds in an antibiotics facility for the Sandoz division of Swiss drug maker Novartis in Tyrol.
Industry players warn that it could be complicated to bring production home. Higher labor costs and stricter environmental standards make it impossible to compete with Asian suppliers on price.
Novartis said that instead of having a single supplier close by, at least two key ingredient sources should be identified to provide fallback options in the event of failure.
Dual sourcing is "a clear focus on this idea of localizing more production, which I believe is the main instinct of many health authorities," said Maria Soler Nunez, head of group quality at the Swiss pharmaceutical company, at an online event hosted by the Financial Times.
Stefan Oschmann, CEO of Merck KgaA, said the drug shortage at Reuters at the beginning of the pandemic was minimal and it was "unrealistic" to repatriate large parts of the production chain to Europe.
($ 1 = 0.8490 euros)
(Reporting by Caroline Copley; Additional reporting by Ludwig Burger; Editing by Mark Potter)
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