Health & Beauty

Ibuprofen is an aromatic propionic acid antipyretic Analgesic, widely used in the world, and is one of the main export products of antipyretic and analgesic APIs in China. China is a major producer and exporter of Ibuprofen APIs in the world. Among the world's five major producers of Ibuprofen APIs, China occupies two seats, namely Shandong Xinhua Pharmaceutical and Hubei Hendy Pharmaceutical.

According to customs data, in 2011, the export value of Ibuprofen API in China was about 52 million US dollars, and the export volume was 5024.82 tons; In 2022, the export amount of Ibuprofen API will be about 101 million dollars, and the export volume will be 7160.6 tons. In the past 12 years, China's Ibuprofen API export amount and export volume have increased as a whole, of which the export amount has increased by 95.89% and the export volume has increased by 42.50%. The growth rate of export volume is lower than the growth rate of export amount, which indicates that for more than 10 years, Ibuprofen exports still have the phenomenon of "volume for price".

Fluctuation period of export amount from 2011 to 2015

According to customs data, from 2011 to 2013, the export amount and volume of Ibuprofen API grew steadily, but the price remained low, fluctuating around $10/kg. In the following years, affected by the international trade environment and the appreciation of RMB, the prices of various basic production factors rose one after another. However, as a traditional bulk drug, Ibuprofen has low added value and is difficult to break the situation, which is reflected in the decline of both the actual export volume and the export amount.

In 2015, the newly revised Environmental Protection Law of the China was officially implemented, which significantly increased the penalties for polluting enterprises. Under the pressure of environmental protection, the number of API plants that stopped production or were subject to production restriction penalties increased. This is also one of the reasons for the decline of Ibuprofen API export amount and export volume in 2014 and 2015.

2016-2019 export volume and price rise period

In June 2018, the Ibuprofen API production line of BASF AG in Germany stopped production for rectification due to technical reasons, resulting in a decrease in effective supply in the market. BASF's reduced production capacity of Ibuprofen API accounts for about 20% of the total global production capacity. Affected by this, China's Ibuprofen API exports ushered in a growth opportunity. According to customs data, in 2018, the average export price of Ibuprofen API in China broke the "$10 curse" for many consecutive years, and the average export price reached $16.42/kg throughout the year. In 2019, the average export price increased to $19.83/kg, and in April 2019, the export price rose to a peak of $22.9/kg. At the same time, the export of Ibuprofen APIs continued to increase. Compared to 2016, the export volume increased by 20.43% in 2019, and the export amount increased by over 100%.

From 2016 to 2019, the export volume and price of Ibuprofen API rose at the same time. On the one hand, BASF's production suspension and rectification led to a decrease in market supply; On the other hand, since 2015, the national drug regulatory authorities have started a series of regulatory policy reforms, such as the review and approval of APIs and the evaluation of generic drug quality and efficacy consistency, which have raised the relevant compliance costs of pharmaceutical enterprises and indirectly led to the "rising tide" of Ibuprofen API prices.

2020 to present: a period of ever-changing adjustments

At the beginning of 2020, the COVID-19 broke out. At the beginning of the epidemic, the medical community had relatively limited understanding of the research on COVID-19. The World Health Organization (WHO), based on a research paper published in The Lancet, issued a notice in March 2020 that the use of Ibuprofen may add to the condition of COVID-19, suggesting that patients should carefully choose to use Ibuprofen. Although WHO soon corrected and explained that it was not against the use of Ibuprofen for the treatment of COVID-19 infection, the widely spread public opinion still affected the market of Ibuprofen, and the export of Ibuprofen APIs in China was also cold. At the same time, affected by the epidemic, Ibuprofen API production capacity has not been fully released in China; The Ibuprofen factory in BASF, Germany, gradually resumed production and released the original capacity. Under the influence of several factors, although the export volume of Ibuprofen API in China did not decline much in 2020, the export unit price dropped sharply, leading to a significant decline in the export amount.

According to customs data, in 2021, the demand for Ibuprofen in the global epidemic prevention will increase, while the excellent epidemic prevention and control work in China will enable the production of API enterprises to recover well. In addition, since March 20, 2020, China will increase the export tax rebate rate of Ibuprofen and other products to 13%. Therefore, from 2020 to 2021, the export volume of Ibuprofen APIs in China will be relatively stable, but the export price has dropped significantly compared with that before the outbreak of the epidemic, leading to the decrease of the export amount of Ibuprofen APIs in 2021 to a level lower than that of the same period in 2018.

Since 2022, with the adjustment of epidemic prevention and control policies in various countries and regions, the demand for Ibuprofen API in the international market has declined. In addition, the export volume of Ibuprofen API decreased and the export amount further decreased due to the market occupation of Paracetamol and other antipyretic and analgesic APIs. In 2022, except August, the export of paracetamol (Paracetamol) raw materials in other months will maintain a year-on-year growth trend, with 46699.95 tons of exports throughout the year, a year-on-year growth of 25.51%.

According to customs data, in November 2022, China optimized and adjusted its epidemic prevention and control measures. From October to December of the same year, the export of Ibuprofen API fell month on month for three consecutive months. The reason for this is, on the one hand, due to the repeated impact of the epidemic on enterprise production; On the other hand, due to the rapid increase in demand in the domestic market in the short term, raw material pharmaceutical companies have reduced their exports and switched to domestic pharmaceutical manufacturers. As another classic type of antipyretic and analgesic drug, paracetamol also experienced a decline in the export volume of raw materials in the last two months of 2022, reflecting the situation of reducing exports to meet domestic anti epidemic needs during special periods.

It was observed that the export price of Ibuprofen API in recent two years was relatively stable at the level of $14/kg, and there was a certain downward trend. It should be noted that since 2021, the average export price of Ibuprofen API is based on the resumption of production by foreign competitive enterprises, and has superimposed the related costs of epidemic resistance, supply chain, logistics and shipping, and the rise of raw materials. With the gradual weakening of the impact of the epidemic on social activities and the gradual listing of a number of COVID-19 therapeutic drugs, the production capacity of Ibuprofen API enterprises can be fully released, but the corresponding demand decreases at the same time. It is expected that in the future, the export unit price of Ibuprofen API will not rise sharply again, and the market trend is not optimistic.

By analyzing the export of Ibuprofen APIs since 2011, we can find that its export price is greatly affected by the supply side, while the pull effect of the demand side is relatively limited. In the past ten years, the export of Ibuprofen APIs in China has experienced a short period of fluctuation, a period of simultaneous rise in volume and price, and a period of structural adjustment under complex circumstances. In 2018, as a window period of rising overseas demand and declining global total capacity, China's Ibuprofen API export ushered in a wave of golden growth, and the anti epidemic demand since the COVID-19 outbreak has also played a certain role in stabilizing the export volume of Ibuprofen API. However, in the face of the weakening anti epidemic demand and sufficient production capacity in the international market in 2023, China's Ibuprofen API export volume and export amount are expected to further decline.

Against the backdrop of vigorously promoting the green transformation, technological innovation, and industrial upgrading of the raw material pharmaceutical industry in China, with the progress of the downstream pharmaceutical industry, the high-quality development direction of the raw material pharmaceutical industry will be the characteristic raw material pharmaceutical with high added value and the CDMO (contract development and production organization) business format. The traditional bulk APIs represented by Ibuprofen must face the reality of partial capacity transfer if they want to change the development path of "volume for price" for a long time.