China and the global API supply chain: what Pakistani buyers should know
Cost, scale and concentration make China central to generic APIs. Tariffs, rebates and quality enforcement are changing the picture.
For a Pakistani manufacturer, sourcing active ingredients usually means sourcing from China. China supplied 58.6% of Pakistan’s pharmaceutical imports in FY24, according to an IPRI policy paper, and Health Minister Mustafa Kamal said in July 2026 that Pakistan imports almost 90% of its APIs and other raw materials.
Why China dominates
An analysis by DrugPatentWatch, updated in September 2026, sets out the reasons (its figures come from its own January 2026 report and were not independently re-verified):
- Chinese API production costs run an estimated 20–30% below India’s.
- Chinese fermentation plants are reported to be 5–10 times the size of Indian ones.
- The analysis singles out beta-lactam antibiotics and their intermediates, such as 6-APA and penicillin G, as a point of concentration; vitamin and statin intermediates are also named.
What is changing
| Change | Effect |
|---|---|
| China removed a 13% export rebate (December 2024) | Estimated 9–13% higher cost for exporters |
| US tariff schedule for generics | Zero for two years, then rising from August 2028 |
| India’s incentive scheme | New local plants for penicillin G, clavulanic acid and others |
| Quality enforcement | Data-integrity issues common in FDA warning letters |
What it means for buyers
- Qualify more than one source for critical APIs to reduce single-supplier risk.
- Audit quality: as DRAP moves to PIC/S standards, supplier qualification matters more.
- Watch costs: rebate and tariff changes can move prices quickly.
Meeting suppliers
The 2026 Pharma Asia exhibitor list includes 45 Chinese companies, many of them API, excipient and packaging material makers — see who is coming — alongside Pakistani importers and distributors. Compare with India’s approach in our PLI article.
Sources
- DrugPatentWatch, “China’s API chokehold survived a 100% tariff. Here’s the data.”, updated 27 September 2026
- Islamabad Policy Research Institute, policy paper on Pakistan’s pharmaceutical sector (Dr Aneel Salman and Sheraz Ahmad Choudhary), December 2025
- Dental Tribune Pakistan, “Pakistan, China launch major pharma investment drive to boost local manufacturing”, 17 July 2026
- Pharma Asia, Exhibitor List 2026 (organiser’s document)
