Barcelona, February 8, 2022

  • Problems in the global supply chain are affecting the production of Active Pharmaceutical Ingredients (APIs) in relation to scarcity, and the exponential increase in raw material prices.
  • In addition to the difficulties regarding raw materials, the sector also faces other serious problems that put its production at risk, such as, among others: long delays in the delivery times of materials; increase in logistics costs, and unprecedented increases in energy prices.
  • The difficulties for the production that the companies that manufacture Active Ingredients are encountering, can cause the shortage of certain essential medicines because the high extra cost of their current manufacture, cannot applied in a regulated price market.

Although it had been brewing for some years, the arrival of the pandemic has exacerbated and put before the different administrations the serious situation with which we currently find ourselves. The dependence of Asian countries, especially China and India, has highlighted the risks of the different European supply chains, being the manufacturers of APis the first link in the value chain of medicine production. This industry cannot see its production interrupted, since the direct consequence may be the lack of medicines.

New environmental and energy use restrictions in China as well as the celebration of the 2022 Winter Olympics in Beijing, and the Asian Games scheduled for August, are causing a considerable cost increase of the basic raw materials to produce Active Ingredients. In addition, 65% of pharmaceutical inputs, equipment and facilities come from China. The offer for these products at this time is absolutely abusive, not including the delivery time, nor offering any type of compensation for breach of contract.

India also causes supply problems and higher prices of many raw materials precisely because, to a large extent, it also depends on basic chemicals manufactured in China.

Although the European Commission has focused on understanding the functioning of European supply chains, especially those of products that have proven essential during the recent pandemic, to identify possible weaknesses and proceed to their strengthening and resilience, seeing as an appropriate way to re-manufacture certain parts of value chains on our continent, especially active ingredients, for the time being, manufacturers do not find a solution to the problems exposed, since it is impossible include these increases to their sales price due to the reference price system of generic medicines.

Although the situation of a possible shortage may be controlled in the short term thanks to the investments of companies on the one hand (increase in stocks, assumption of energy, transport and raw materials’ costs increases), the decrease in profits year after year, if this situation persists over time, could generate situations of shortages of certain APIS and essential medicines in Spain and Europe.

The Spanish and European APIs manufacturers have as their flag to manufacture under the strict GMP quality standards, the highest environmental and safety standards, and call on the administration to equalize the international “playing field” and that the rules be the same for all manufacturers, regardless of their origin. If this situation continues, the effect will be detrimental to the safety of the final consumer: patients. Determined action by governments is needed to prevent that from happening.

About AFAQUIM

Manufacturers of Active Ingredients and pharmaceutical intermediates in Spain represent a turnover that exceeds 2,400 million Euros and an export rate of around 83% of their total production.

Despite global competition in prices, especially from Asian countries, the sector has responded with the highest quality and safety of its products, manufacturing under the strictest global standards such as GMP legislation, and maintains a constant line of growth of more than 15% per year. Spain is the second European country in importance in the production of pharmaceutical raw materials, well above its industrial position in all nations.

AFAQUIM represents 33 companies, some integrated into international groups and most of them independent manufacturers.

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