The shortage of pharmaceutical active materials

Beyond the relocation of production plants

By Jean-Pierre Barthole

The unprecedented health crisis that the world is facing reminds us, if necessary, of the great dependence of our countries on health products and materials designed overseas.

Will we face a shortage of medicines, for which China and India are the main suppliers, escalate the terrible difficulties of the moment? Will globalisation of the supply chain, without a complete assessment of the risks of supply disruption, deprive us of essential pharmaceutical active ingredients? Could the relocation of production in Europe be the solution[1] [2]?

  • Until the 60’s, the pharmaceutical industry was grounded on chemotherapy : each chemical preparation’s compound has a therapeutic target. The active molecules were made out of 4 to 5 steps of chemical synthesis, on which the chemical industry has initiated its development through R&D.
  • Since then, the rise of biotechnologies has superseded chemotherapy. A new technology pathway opened up new innovation avenues to make new molecules. Through broad collaborations between companies and research institutions, the increasing knowledge, intellectual property and know-how have allowed to develop more sophisticated molecules out of more and more complex synthesis process including up to 25 steps. This went with significant capital and R&D costs.
  • Western countries’ politicians are worried about their health spending rise and, in order to cut costs, in particular for generic molecules. This led to a massive manufacturing relocation. As a matter of evidence, paracetamol, ibuprofen and penicillin, amongst many others, are respectively 60%, 50% and up to 90% made in China. This manufacturing dependence has reached a point that, under the current circumstances, a shortage of antibiotics is a matter of concern, as expressed recently by the European Chamber of Commerce in China.
  • European and US regulatory files relating to new molecules and their processes, have built up and become more complex.
    • Quality framework for active ingredients and patient safety imposes increasingly stringent rules throughout the design and production phase of the manufacturing units; this requires the development of cumbersome, time-consuming and costly files. Given the challenges of developing active ingredients, should we be pragmatic somehow ?
    • Authorisation dossiers have also become more complex …. A FDA file can be 100,000 pages long while it used to be only one third of it 30 years ago.[4]
  • Innovative molecule’s development cost has significantly increased, leading manufacturers to outsource all or part of the active ingredients synthesis steps, with the manufacture of building blocks (part of molecules) made in China at a height of about 50%.

As a result, pharmaceutical companies have kept on rationalising their footprint while containing their industrial investments. These were meant to control the erosion of their return on R&D investments with a very limited success [5].

How can we globally contemplate future scenarios? What future for drugs at a global level? What can we do to prevent a potential shortage?

Monitoring such production footprints is heavily challenging :

  • Discovery of new active molecules is becoming less and less frequent,


  • The supply chain has become complex, as production of intermediates are made in a scattered footprint and even more with just in time supply demand,


  • The manufacturing footprint is somewhat messy and way too complex with a number of 3 to 6 thousands sites in China and India,


  • Regulatory constraints have tied up, both on product approval filings and production production processes. This has increased new products’ time to market up to more than 15 years while patents expires after 20 years…

In many countries, public health is an invaluable capital delivering physical, mental and well-being to the community. Higher operating costs might be necessary to prevent that such system breaks up.


Faced with these challenges, productions relocation’s issue is only the tip of the iceberg ! We need to come back to the rationale for this shift and draw lessons how to cope with the resulting issues; indeed :

  • Can we streamline regulatory filings in a pragmatic fashion without any compromise on people safety?


  • European production footprint has been dismantled[6]. And this has gone with a loss of the industrialization skills on a big scale. It will therefore take time, energy and tangible and intangible investment to turn around the current trend. How many active ingredient production units have been created in Europe in the last 20 years?


  • As citizens, are we ready to see factories settling down in our neighborhood? Are we ready to pay more for drugs produced in Europe? What will we learn from the crisis once this is over?


  • Support schemes at the EU level – as far as possible – will likely have to be considered (Relocation tax credit, targeted training, etc.).

China no longer wants to be only the producer of active ingredients but also the developer of new molecules. It has recently simplified its approval process for new medicines and is the first country in the world to approve a new anemia treatment, Roxadustat by Astra Zeneca and Fibrogen[7]. It is also developing the «Pharma Valley» made in China, in Shanghai’s Pudong district, country’s biotechnology heart. China is building the width and depth of its core competences: “China has funds, scientific resources and the key projects supported by the central government…” said Jun Ren, founder of New Summit Biopharma[8].

If we are not ready to change the paradigm, Europe will lose the grip on future drugs. This may be impactful on our public health.

Sources : 

[1] The pharmacist’s daily life: Is there a risk for medicines supply? – M. Mazière – February the 17th 2020

[2] Euractiv : Europe’s dependence on medecine imports – March the 16th 2020

[3] Académie Nationale de Pharmacie : Pharmaceutical raw materials, globalization and public health, council recommendations – June the 22nd 2011

[4] Strategic Horizons: Drug Market Characteristics and Pharmaceutical Company Strategies – P. Abecassi et N. Coutinet – 2008,1, n°7,111-139

[5] Site internet internet website – April the 20th 2020 :

[6] Counterpoints: Drug shortage in France, 4 items – June 2019

[7] The Opinion: China approves a drug for the first time before other nations – December the 19th 2018

[8] PWC: Would the world’s largest pharmaceutical industry located in China? – C. Mazille et H. Rives – December 2019

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