China's position and competitiveness in the global antibiotic value chain: implications for global health

Antibiotics are a key commodity for global health, and inadequate access is a major contributor to global mortality. COVID-19 has refocused attention on global pharmaceutical value chains and the need for sustainable and secure production and supply of key products, including antibiotics. Production of antibiotics and their active pharmaceutical ingredients is capital- and technology-intensive, however, and value chains are dominated by a limited number of countries. China is known to be one of the largest producers, but its position in global value chains has not previously been analyzed. This is important for discussions about equitable and resilient global supplies, including through global instruments such as the pandemic treaty.

This study utilizes data from the International Trade Center database to analyze global and Chinese export trade patterns in the antibiotic industry from 2002 to 2021, along with trends in comparative advantage. The antibiotic trade data included in this study covers different antibiotic products, including some tuberculosis drugs, while other types of antimicrobial drugs (such as antivirals, antiparasitics) are excluded.

The export share of antibiotic ingredients from China increased from 9.0% in 2002 to 44.5% in 2021. China is the largest exporter of antibiotic ingredients (with a strong comparative advantage). Additionally, the export share of antibiotic medicines increased from 0.5% in 2002 to 6.5% in 2021, making it the 7th largest exporter of antibiotic medicines (though with a comparative disadvantage). The proportion of antibiotic medicines in China's exports is gradually increasing, though the country's antibiotic industry is expected to remain in the upstream-to-midstream segments of the global supply chain in the short term. China's export market for antibiotic medicines is fragmented, focusing on developing countries, though European (17.9% in 2021) and North American markets (13.1% in 2021) are increasing in importance. China's weight in global antibiotic exports, particularly of antibiotic ingredients, creates dependencies for countries reliant on China, and for Chinese companies reliant on certain overseas markets.

China is central to global antibiotic manufacturing. Policies promoting the reshaping of global supply chains and reshoring of critical medicines will likely create challenges for Chinese exporters, though are unlikely to alter the global supply structure in the short term. This has implications for Chinese policymakers, including strengthening innovation, quality, international competitiveness, and diversifying markets. Equally, China's huge manufacturing capability, cost advantages, and rapid scientific and technological progress, make the country an inevitable and important part of future arrangements to ensure equitable global antibiotic access. As the Chinese government considers its global health policy in the post-COVID-19 era, antibiotics may provide an area where China can play a distinctive role.