Active Pharmaceutical Ingredients (API) are critical in manufacturing many prescription drugs. Healthcare providers and patients rely on a consistent, uninterrupted supply of API to ensure that essential medications remain available. However, the global API supply chain is complex and often fraught with disruptions. This can lead to shortages and higher drug prices. In this article, we will explore the challenges of the API supply chain and how companies are working on getting it just right.

So what are APIs exactly?

Active pharmaceutical ingredients (APIs) are the chemicals used to make a drug. They are the "active" ingredients that produce the desired therapeutic effect. APIs can be sourced from natural and synthetic sources and must meet strict quality standards set by regulatory agencies such as the US Food and Drug Administration (FDA).

The API supply chain is long and complex, often involving multiple manufacturing steps and suppliers. This can make it difficult to track the source of an API and ensure its quality. In addition, the global API market is highly consolidated, with a few large companies controlling the majority of production. This can lead to disruptions in supply when one of these companies has a problem.

What are some examples of everyday APIs?

Many familiar drugs contain APIs. Some common examples include:

- Aspirin (acetylsalicylic acid)

- Ibuprofen (ibuprofen)

- Lipitor (atorvastatin)

- Nexium (esomeprazole)

- Viagra (sildenafil)

What challenges does the API supply chain face?

The API supply chain faces several challenges, including quality control, cost pressures, and environmental regulations.

Quality Control: Ensuring the quality of APIs is a significant challenge in the supply chain. APIs must meet strict quality standards by regulatory agencies such as the FDA. In addition, the manufacturing process for APIs is often complex, involving multiple steps and suppliers. This can make it difficult to track the source of an API and ensure its quality.

Cost Pressures: The global API market is highly consolidated, with a few large companies controlling most of the production. This can lead to disruptions in supply when one of these companies has a problem. In addition, the cost of raw materials and energy used in API production has risen recently. This has put pressure on API manufacturers to increase prices.

Environmental Regulations: Environmental regulations are another challenge for API manufacturers. Many APIs are produced using hazardous chemicals that must be disposed of properly. In addition, API manufacturing often generates a lot of waste products that must be treated before they can be released into the

Why aren't APIs made in the United States then?

The United States used to be a major producer of APIs, but that changed in the 1990s when drug companies began outsourcing production to China and India. These countries offered lower labour costs and fewer environmental regulations. In addition, the Chinese government provided subsidies to API manufacturers. As a result, most API production shifted to these two countries.

Today, China and India produce more than 80% of the world's APIs. However, this has led to concerns about the reliability of the global API supply chain. For example, when the Chinese chemical plant caught fire in 2017, it disrupted the supply of a critical API used to manufacture dexamethasone. As a result, the price of dexamethasone surged, and there were reports of patients being unable to find the medication.

Additionally, many of the raw ingredients and materials, coupled with increasing manufacturing costs associated with a shortage of qualified workers in the United States, have encouraged overseas manufacturing. In the United States alone, there are just 90,000 practicing chemists. On the other hand, India has nearly 1 million chemists, and China has 90,000 chemists in just one of their societies.

What can be done to reduce the risk of API shortages?

Companies can reduce the risk of API shortages by diversifying their supplier base and investing in alternative suppliers. In addition, they can improve the visibility and trace of APIs throughout the supply chain. Doing so can ensure a more reliable supply of essential medications.

How to reduce supplier risk for Active Pharmaceutical Ingredients (APIs)?

There are several steps that companies can take to reduce supplier risk for Active Pharmaceutical Ingredients (APIs). These steps include:

- Diversifying the supplier base: Companies should spread their business among multiple suppliers to reduce the risk of an API shortage.

- Investing in alternative suppliers: Companies should invest in alternative suppliers, such as those in Europe. Doing so can ensure a more reliable supply of essential medications.

- Improving visibility and tracing: Companies can improve the visibility and trace of APIs throughout the supply chain. This will help them to identify potential problems and address them quickly.

Conclusion

In summary, APIs are active pharmaceutical ingredients used to create medications. Many common medications contain APIs that have been sourced from other countries. Unfortunately, there has been a recent shortage of APIs due to disruptions in the global supply chain. One potential solution to this problem is more API manufacturing facilities in the United States. Do you have any questions about APIs or pharmacy? Feel free to leave a comment below or contact me directly. I'll be happy to answer them and continue learning about this topic with you.