The fight against Chinese subsidized drug production is uneven, but a European company is coping.
- - Virtually all active substances (API) needed to produce Servier drugs are produced in our factories - said Joanna Drewla, general director of Servier Polska, during the 21st Health Market Forum
- This is currently quite rare. Most APIs and intermediates in drugs manufactured in Europe come from China and India.
- "When it comes to our company, we have two aspects. First, we were initially a private company, and now we are managed by an independent foundation. This makes it easier for us to make certain decisions," explains Joanna Drewla.
- Secondly, the company exports drugs to 140 countries worldwide. This creates economies of scale and multiple markets.
Servier is one of the few companies that manufactures medicines from almost 100 percent of its own active pharmaceutical ingredients (APIs).
API is primarily produced at the Bolbec plant in France. Each year, over 2,000 tons of the substance are produced here, which are then sent to Servier's finished products plant. The manufacturer has a total of nine such plants worldwide, one of which—the third largest—is located in Warsaw.
The other two plants that supply active ingredients to Serviera's production facilities are located in Spain and Hungary.
Globally, over 98% of the active ingredients used in this company's medicines are produced in the European Union . From there, they are exported to a total of 140 countries around the world.
This solution is quite unique in a situation where up to 80 percent of APIs and intermediates in drugs manufactured in Europe come from China and India.
Manufacturers often emphasize that competing with Asian suppliers of active ingredients is nearly impossible. Therefore, during this year's 21st Health Market Forum, we asked the company how they manage to operate within this model.
"When we started our business, over 70 years ago, many companies were making their own APIs. However, with increasing pressure on prices, it was a natural move to find cheaper sources of substances. I believe the local governments in China and India heavily subsidized this business. In China, it was a priority for the Chinese economy to help local companies become export hubs," recalled Joanna Drewla, CEO of Servier Polska.
"When it comes to our company, we have two aspects. First, we were initially a private company, and now we are managed by an independent foundation. This makes it easier for us to make certain decisions. We have no shareholders, we are not obliged to pay a quarterly dividend, and we are not obliged to look through the prism of what is happening on the stock markets," she emphasized.
According to the director, this gives the company the freedom to decide how to invest the generated profit: whether it will be an investment in a factory producing its own active substance or in research and development:
"That's why virtually all active ingredients are produced in our factories. Although that doesn't mean it's cheaper. I think it's definitely more expensive. However, there's the issue of markets, which is very important, especially in the context of the current discussion in Poland regarding domestic API production."
- We currently supply 140 markets around the world and we have three API factories , which are completely sufficient to ensure supply, including the so-called plan B - if something happens in one factory, we can continue production in another - explained Director Drewla.
This means that when planning investments in active substance factories, this production must take place on a larger scale than just supplying the local market, which requires finding sales markets.
In this situation, a better strategy is to reach an agreement with other European countries regarding the production of critical substances and to specialize in certain APIs at the country level.
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