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pharmaceuticals · APIs · supply security
Who makes the world's medicines, and who makes their ingredients?
Pharmaceutical trade is two markets stacked on top of each other. The visible one is finished formulations, HS chapter 30, the pills and vials that cross the pharmacy counter: a $894.3B export market in 2024, dominated by Western Europe and the United States. Underneath sits the market for active ingredients and their precursors, vitamins (HS 2936), hormones (2937), alkaloids (2939) and antibiotics (2941): a $60.8B market with a very different geography. This page measures both tiers with BACI HS6 trade data from 1995 to 2024, then uses the CEPII GeoDep dependence panel to ask which importers are one supplier away from a drug shortage.
formulation exports (ch 30, 2024)$894.3B
API-heading exports (4 HS4, 2024)$60.8B
top antibiotics exporter (2024)CHN (45.7%)
economies with pharma dependence (2022)198
pharma-sector dependent lines (2022)2,538
The two-tier market: formulations grew much faster than the ingredients beneath them
World exports of finished formulations rose from $60.0B in 1995 to $894.3B in 2024, a 14.9x expansion. The four classic API headings together went from $15.8B to $60.8B, only 3.8x. The divergence is partly real (value migrated downstream into patented formulations and biologics) and partly compositional: many modern APIs, especially for biologics, ship inside chapter 30 or as unclassified intermediates rather than under the four legacy headings. Within the API tier the headings moved very differently: hormones (HS 2937, the heading that contains insulin and the peptide hormones behind the GLP-1 boom) multiplied 15.6x to $38.0B, while antibiotics (HS 2941), the workhorse generics tier, grew only 1.6x to $11.3B over twenty-nine years, roughly flat in real terms. Cheap, essential, and stagnant in value is exactly the profile that concentrates production in the lowest-cost location.
Figure 1a
World exports of finished formulations (HS chapter 30), 1995-2024
Finished-formulation exports reached $894.3B in 2024, 14.9x the 1995 level. The acceleration after 2020 reflects vaccines, biologics and the repricing of patented medicines, current USD values, so inflation is included.
Source: CEPII BACI 202501 (retrieved 2026-04-28), sum of HS6 export values across chapter 30, current USD (BACI stores thousands USD; multiplied by 1,000 for display).Figure 1b
World exports of the four API headings, 1995-2024
Hormones (HS 2937) became the largest API heading at $38.0B in 2024, overtaking antibiotics, which stood at $11.3B after three decades of near-stagnation. Vitamins reached $9.1B and alkaloids $2.4B. The post-2020 hormone surge tracks the insulin and GLP-1 peptide expansion documented in company disclosures from the Danish, Irish and US production hubs.
Source: CEPII BACI 202501 (retrieved 2026-04-28), sum of HS6 export values per HS4 heading (2936 vitamins, 2937 hormones, 2939 alkaloids, 2941 antibiotics), current USD (thousands USD x 1,000).
Who makes the world's APIs
The four headings have four different market structures, and the data does not support a single "China makes all APIs" story. In 2024 the top exporter of vitamins (HS 2936) is CHN at 40.4% of world exports, and the top exporter of antibiotics (HS 2941) is CHN at 45.7%. Hormones are a different world: IRL leads at 48.5% of a $38.0B market, reflecting where the multinational originators located peptide-hormone production. Alkaloids are the most dispersed heading, led by DEU at just 15.6%. Concentration ratios say the same thing: CR4 (the combined share of the top four exporters) runs from 52% in alkaloids to 80% in hormones. Every heading is above the 40% CR4 threshold that industrial-organization work treats as a tight oligopoly.
Figure 2
Top-5 exporters and CR4 per API heading, 2024
HS 2936 · Vitamins and provitamins · world $9.1B · CR4 68%
Two headings have a dominant single supplier: vitamins (CHN, 40.4%) and antibiotics (CHN, 45.7%), both led by China in this year's data. The hormone heading is nearly as concentrated (IRL, 48.5%) but the concentration sits in high-income economies. Alkaloids (DEU, 15.6%) have no majority-scale leader. India appears in the top five for alkaloids and antibiotics, the generics-adjacent headings, but not for vitamins or hormones.
Source: CEPII BACI 202501 (retrieved 2026-04-28), HS6 export values aggregated to HS4 headings, 2024. Share = country exports / world exports per heading; CR4 = combined share of the four largest exporters.
Formulations vs ingredients: two different maps
Put the two tiers side by side and the asymmetry is stark. The formulation market is led by DEU ($113.7B, 12.7% of world exports), followed by IRL and USA; the API tier is led by IRL (30.6%), with USA and CHNnext. Countries that dominate the finished tier do not necessarily control their own inputs, and the reverse holds too. India is the canonical case: the "pharmacy of the world" ranks #9 in formulation exports at $29.1B (3.3% of world exports), yet in the API tier it ranks #6 with $2.0B, and in antibiotics specifically it imported $1.9B against exports of $1.0B in 2024: a net importer of the ingredient class its generics industry runs on.
Figure 3
Top-10 formulation exporters vs top-10 API exporters, 2024
Finished formulations (HS chapter 30)
API headings (HS 2936 + 2937 + 2939 + 2941)
The formulation top-10 is Western European and American with two exceptions (India at #9, Singapore); the API top-10 mixes high-income hormone hubs (IRL, CHE, USA) with the volume producers (CHN, IND). Note the scale difference between the panels: the formulation market is roughly 15x the size of the four API headings combined.
The GeoDep panel resolves India's antibiotic sourcing to the supplier level. In 2022, the largest single supplier of every one of the six antibiotic HS6 lines India imports is China, with first-supplier shares running from 52% (tetracyclines) to 97% (chloramphenicol); 3 of 6lines cross GeoDep's full dependence threshold (high concentration plus low substitutability). This is the axis New Delhi's Production Linked Incentive scheme for bulk drugs (2020) targets: formulation strength built on imported fermentation-based intermediates.
Figure 4
India's antibiotic imports: largest single supplier share per HS6 line, 2022
China is the first supplier on all 6 antibiotic HS6 lines, with shares between 52% and 97%of India's imports of each line. Darker bars mark the 3lines GeoDep flags as fully dependent. A note on sourcing: the workbench's bilateral_year table stores country-pair totals without product detail, so this supplier-level cut comes from GeoDep, which embeds the bilateral HS6 import shares.
Source: GeoDep: Geopolitical Dependencies (CEPII), 2025 build (retrieved 2026-04-28), year 2022, importer IND, HS6 lines under heading 2941. share_odpt = import share of the largest origin partner; dependent = 1 flags high supplier concentration plus low substitutability.
Single-source exposure: who depends, and on whom
GeoDep flags an importer x HS6 pair as dependent when imports are concentrated on one origin and substitutes are scarce. Restricting to the pharmaceutical sector in 2022, 198 economies carry at least one dependent pharma line, and the world total stands at 2,538 dependent lines, up from 1,991 in 2019. The most exposed importer by count is JOR with 26 dependent pharma lines. On the supply side the picture is bipolar: European Union (EU27) is the dominant origin on 945of the world's dependent pharma lines, followed by CHN (739) and IND (260). The EU appears in GeoDep only as the bloc EUN, which cuts both ways: as a supplier it is the single largest source of pharma dependence for the rest of the world, while as an importer the bloc itself records just 12 dependent pharma lines in 2022, because intra-EU sourcing counts as internal.
Figure 5
Pharma-sector dependent HS6 lines by importer, top 15, 2022
JOR leads with 26 dependent pharma lines, ahead of MAR (24) and RUS (24). The list mixes middle-income importers with thin domestic pharmaceutical industries and large industrial economies (JPN, KOR, GBR) whose dependence sits in specific niches rather than across the board. EU member states do not appear individually: GeoDep aggregates them into the EUN bloc.
Source: GeoDep: Geopolitical Dependencies (CEPII), 2025 build (retrieved 2026-04-28), year 2022. Count of HS6 lines with dependent = 1 and sect_pharmaceuticals = 1 per importer. The EU appears only as the bloc EUN.Figure 6
Dominant suppliers on the world's dependent pharma lines, 2022
European Union (EU27) is the first supplier on 945 dependent pharma lines and CHN on 739: together they anchor 66% of all pharma-sector dependence worldwide. The split is qualitative, not just quantitative: the EU's dependent lines lean toward high-value formulations and hormone products, China's toward antibiotics, vitamins and upstream intermediates, consistent with the heading-level concentration in Figure 2.
Source: GeoDep: Geopolitical Dependencies (CEPII), 2025 build (retrieved 2026-04-28), year 2022. Count of dependent pharma-sector lines (dependent = 1, sect_pharmaceuticals = 1) by first_odpt (largest origin partner). EUN = European Union (EU27) as a bloc.
Importer vulnerability and income: the gradient is weaker than expected
Does pharma dependence fall as countries get richer? Joining the 2022 dependent-line counts to World Bank GDP per capita produces a flatter picture than the shortage literature might suggest. Average counts by income quartile are 12.9 (poorest quartile), 15.0, 15.0 and 12.2(richest quartile): a mild hump in the middle-income range, not a monotone decline. Depth looks the same everywhere: on dependent lines the first supplier's average share sits between 83% and 85% across all four quartiles. Two caveats keep this honest. First, dependence here is a countof flagged lines, not a volume or health-outcome measure; a rich country's three dependent oncology lines can matter more than a poor country's twenty. Second, the richest quartile excludes the EU member states individually (they enter as the EUN bloc, whose intra-EU sourcing is internal by construction), which pushes the high-income average down.
Figure 7
Pharma-dependent lines vs GDP per capita, 174 economies, 2022
Each point is an economy: horizontal position is GDP per capita (log scale), vertical is its count of pharma-sector dependent HS6 lines. The cloud is wide at every income level, with most economies between 5 and 25 dependent lines regardless of income. What income buys is not fewer dependencies but different ones: richer importers depend on branded and biologic lines from the EU and US, poorer importers on generic antibiotic and vitamin lines from China and India.
Source: GeoDep: Geopolitical Dependencies (CEPII), 2025 build (retrieved 2026-04-28), year 2022, dependent pharma-line counts per importer; World Bank World Development Indicators, NY.GDP.PCAP.CD (GDP per capita, current USD), 2022. Economies without a 2022 WDI value are excluded; EU member states enter only via the EUN bloc.
Where to go next
This page is the pharmaceutical layer of the supply-chain platform. To ask what would happen if a dominant supplier were cut off, the Mercator substitutes model scores alternative suppliers line by line. The quarterly pharmaceuticals brief tracks the same HS codes at monthly frequency. The supply-chain hub collects the full stack (concentration, chokepoints, friendshoring, vulnerability), and critical inputs generalizes the dependence question from medicines to every input a country needs in order to export.