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.
In this article
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.
How to qualify an API supplier
Price is only the first question. Under GMP, a manufacturer is responsible for the quality of the materials it uses, so each API source must be qualified before use and monitored afterwards. A typical qualification covers:
- Documentation — the supplier’s technical file, often a Drug Master File (DMF) filed with a regulator, or a Certificate of Suitability (CEP) from Europe’s EDQM showing the API meets the European Pharmacopoeia.
- GMP status — evidence of inspections by recognised authorities and the supplier’s own quality system for active substances.
- Samples and testing — testing several batches against the specification, including impurities.
- Audit — an on-site or remote audit of the manufacturing site, increasingly expected under PIC/S-aligned inspections.
- Agreements — a quality agreement that sets out who is responsible for what, including change notification.
- Ongoing monitoring — tracking complaints, deviations and test results over time.
Data integrity and change control
Two topics deserve special attention. Data integrity — whether test results are complete, original and trustworthy — is a frequent theme in regulators’ findings worldwide. Change control matters because suppliers sometimes change a route of synthesis, a starting material or a site; such changes can alter impurity profiles and must be notified and assessed. A good quality agreement makes notification a contractual obligation.
Managing supply risk
Concentration of supply is a risk for any buyer, wherever the supplier is. Practical steps include qualifying a second source for critical APIs, holding safety stock for products that patients cannot do without, and watching policy changes — export rebates, tariffs and environmental inspections — that can affect prices and availability at short notice. Distributors and importers can help by holding stock locally and handling documentation.
Working with importers and distributors
Many Pakistani manufacturers buy APIs through local importers rather than directly from the factory. A good importer adds real value: holding stock locally, managing import documentation and customs clearance, supplying certificates of analysis and regulatory documents, and handling smaller quantities than a manufacturer would sell directly. When choosing one, ask which manufacturers they represent, how they store materials, and how quickly they can provide the documents your quality team needs.
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)
