The Chinese pharmaceutical industry is turning to local suppliers for reagent procurement, seeking to reduce costs and shorten delivery times
Chinese pharmaceutical R&D companies are turning to local suppliers for reagent procurement to reduce costs and shorten delivery times. Due to the increase in import tariffs caused by the U.S. trade war, the market share of Western suppliers such as Thermo Fisher Scientific and Merck has been affected. Industry executives indicate that there will be greater reliance on domestic companies such as TITAN SCIENTIFIC and Vazyme Biotechnology in the future. It is expected that the import value of laboratory and diagnostic reagents in China will slightly decrease to USD 5.76 billion in 2024
Reuters Shanghai, August 14 - Industry executives and managers indicate that Chinese pharmaceutical R&D companies are increasingly interested in sourcing reagents, a key supply, from local manufacturers as they seek to reduce costs and shorten delivery times.
Western reagent suppliers, including Thermo Fisher Scientific (TMO) from the United States and Merck (MRCG.DE) from Germany, have made substantial profits selling these compounds used for laboratory analysis and quality control testing in China.
However, these industry executives and managers state that the trade war initiated by the United States has led to rising import tariffs in China, coupled with long-term concerns over costs or access, prompting Chinese companies to turn to local competitors such as TITAN SCIENTIFIC (688133.SS) and Vazyme (688105.SS) for their purchases.
The five executives and managers interviewed by Reuters, all working in reagent procurement or supply for Chinese companies, suggest that this industry is showing early signs of shifting towards increased domestic sourcing.
According to the United Nations Commodity Trade Statistics Database (U.N. Comtrade), the market for laboratory and diagnostic reagents in China is partially supplied by imports, with imports projected to be USD 5.76 billion in 2024, slightly down from USD 5.83 billion in 2023.
Ma Xingquan, co-president of Ruizhi Pharmaceutical Technology (300149.SZ), stated: "(Reagent localization) actually has more advantages because the requirements for timeliness are very high."
He mentioned that most of the reagents used in the company's preclinical operations are produced by Chinese companies, including TITAN SCIENTIFIC and Shanghai Aladdin Biochemical Technology (688179.SS).
Ma added that as new products are launched, the company's use of domestic reagents may further increase
