Active Pharmaceutical Ingredients (API) of good quality is core to the
manufacturing of effective and safe essential drugs. The price of APIs is the
main cost driver for manufacturing. Only a limited number of large manufacturers
of finished pharmaceutical products have their own API manufacturing
capabilities, and none of them can make all required APIs in-house. The majority
of manufacturers, including all those located in Sub-Saharan Africa (with the
exception of one company in South Africa) have to buy all APIs in the open
market. The paper tries to make the structures of the API market more
transparent, trying to determine how difficult it is for small manufacturers in
developing countries to navigate the global API market and ensure that they get
a quality product at a fair price. It also looks into the competitiveness of the
market, trying to assess the risk that manufacturers or traders monopolize parts
of the API market for essential medicines with low commercial attractiveness.
The author confirms the initial assumption that the API market provides a
challenge in particular to small manufacturers, who have limited means to verify
the quality of the APIs they are buying. One potential way to address this
problem would be to broaden the World Health Organization (WHO) prequalification
system to include APIs for drugs that are on the WHO model list for essential
medicines.