Active ingredients, EUR 1.5 billion needed to bring production back to the EU

"Ensuring the availability of critical medicines is a strategic responsibility that we can no longer postpone". Pierfrancesco Morosini, the president of Aschimfarma, the Federchimica association representing the producers of active ingredients (APIs) and intermediates for the pharmaceutical industry, is asking Europe for funds "amounting to €1.5 billion to be shared among the various producer countries for the reshoring of production that currently takes place in the Far East". According to a study by Sicos, the French Association of Active Ingredients, carried out by the company Advancy, the share of India and China is 74%. At the Aschimfarma Forum held at Federchimica's headquarters in Milan, the main critical issue that emerged among manufacturers in the sector was precisely that of generics. The undersecretary of state at the Ministry of Health, Marcello Gemmato, emphasised in his speech that in this context, 'it is very important for us to reappropriate the chemistry of active pharmaceutical ingredients in Italy and Europe, containing our dependence on foreign production also for geopolitical reasons and to be able to cope with future crises'.

The industry's outlook, as Morosini pointed out, 'is largely played out on generic critical drugs and the 270 molecules that underpin them. Of these, Italy already produces 60 and could add another 100. Italian companies have the know-how and skills to produce many of the essential molecules currently lacking on the market. If adequately supported by concrete and sustainable European measures, they are ready to reactivate production in Italy, thus reducing dependence on third countries'. From this point of view, the new EU regulation represents "a strategic opportunity to incentivise investment, improve the transparency of supply chains, and enhance the excellence of made-in-Italy pharmaceuticals," Morosini continues. In particular, two types of aid are needed, explains the president of Aschimfarma, namely "support for Opex, i.e. recurring operating expenses and therefore mainly energy and personnel, for the 60 active ingredients already produced in our country, and support for the construction of new production lines, for research and development and for technology for the 100 critical active ingredients that our country could produce. Our request is consistent with the provisions of the Critical Medicines Act, and the events experienced in recent years make it even more urgent, because the vulnerability of the pharmaceutical supply chain exposes Europe to dependence on the countries of the Far East, where the producers of generic drugs are largely sourced, due to the excessively high costs of active ingredients produced in Europe'.

During the Aschimfarma Forum, Gemmato reiterated 'the importance of the pharmaceutical sector and in particular that of active ingredients in our country' and his commitment 'to modernising the regulatory framework. In the proxy bill on pharmaceuticals, there will also be a provision on active ingredients'. A few figures help to understand the importance of the sector for Italy. A study commissioned from Prometeia, entitled 'The bee market in Italy: size and trends' showed that the sector is in continuous expansion: the 2025 forecast speaks of a turnover of €5.76 billion, or 3.3% more than in 2024. Going back a few years, to 2018, the turnover was EUR 4.05 billion, rising to 4.30 in 2019, 4.57 in 2020. The trend of constant growth has consolidated the position of companies active in Italy within the European Union. Italy is the country most affected, having a market share of 26%, compared to 18% in Spain, 12% in Ireland and 9% in Germany. Recent years, however, show a decline in the share of critical generics. "The trend that will continue also in 2025 indicates a loss of competitiveness of the Italian industry in this relevant sector for critical medicines even for everyday use that we cannot afford because it would mean depending on the Far East, so India and China mainly," says Morosini.

Exports play a very significant role in the sector, so much so that around 90% of Italian turnover is generated by exports, the value of which rose from 3.48 billion euro in 2018 to 4.97 billion euro in 2024, an increase of 43%. In 2024, there was a significant strengthening of European destinations, which fuelled more than 56%, or EUR 2.8 billion, of total foreign sales. Among the destination markets, the United States with 19%, has the most important share, followed by Germany (18%). Other important European destinations are France (5%) and Spain (4%). Italian productions are characterised by a high level of quality supported by strong investments. In fact, the Prometeia survey shows that investments as a whole are estimated at 9.1% of turnover and are growing: they mainly focus on new production lines and the modernisation of existing lines. Other expenditure headings are research and development, which absorbs 2.5% of annual turnover, and health and safety with 1.9%. This is a sector with a significant and growing share of graduates or PhDs, who now number more than one in four, and with a strong focus on sustainability integrated into business processes, as shown by the widespread adoption of certifications in the ESG sphere.