An Active Pharmaceutical Ingredients, API, is a biologically active chemical component that has a therapeutic effect on the body. They are synthesized chemically or extracted from natural sources like plants and animals. After an API is produced, it can be formulated into a finished dosed product such as tablets, capsules, injections, and creams by combining it with inactive ingredients such as binders, fillers, and lubricants.
China is the largest supplier of APIs to the pharmaceutical industry due to the availability of low-cost labor. China manufactures over 2000 API molecules in over 1000 manufacturing facilities to approximately 189 countries. The government of China provides incentives to the pharmaceutical industry to attract investment. In addition to cheap labor and government incentives, material costs are low in China which decreases overall production costs and increases the profit margin.
Challenges facing the Chinese API industry are poor quality control standards and lower quality materials. The government has been implementing stricter regulations and establishing a system for inspection and supervision to address concerns regarding quality control. Chinese manufacturers are encouraged to adopt international standards for quality control and manufacturing excellence.
An API is made from several chemical compounds. The API is not made by only one reaction from the raw materials but rather it becomes an API via several chemical compounds. The chemical compound which is in the process of becoming an API from a raw material is called an intermediate. Pharmaceutical intermediates are produced as by-products during the production of APIs. Drug intermediates are the drugs used as raw materials for the production of bulk drugs, or they can refer to a material produced during synthesis of an API that must undergo further molecular change or processing before it becomes an API.

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