The upstream of pharmaceutical intermediates is the basic chemical raw material industry. Basic chemical raw materials are bulk commodities and prices fluctuate greatly, which directly affects the production costs of enterprises.

However, pharmaceutical intermediates are subdivided into primary intermediates and advanced intermediates. Because primary intermediate suppliers can only provide simple intermediate production, they are at the front end of the industrial chain. The pressure of competition and price is the greatest. The price fluctuations of basic chemical raw materials have a greater impact on them. And advanced intermediate suppliers not only have strong bargaining power for junior suppliers, but more importantly, because they undertake the production of advanced intermediates with higher technical content, and maintain closer ties with multinational companies, so The impact of raw material price fluctuations is small.

Speaking of certification, the FDA currently requires that intermediates must be registered. COS (European Pharmacopoeia Compliance Certification, only drugs that pass the certification can be sold in the EU market) are not used, but the CTD file must have a detailed process description of the intermediate. In China, there are no mandatory GMP requirements for intermediates.

Pharmaceutical intermediates do not require a production license like APIs. The barriers to entry are relatively low and competition is fierce. Therefore, quality, scale, and management level are often the foundation for the survival and development of enterprises, and increasing environmental pressures have also led many small companies to gradually withdraw from the competitive stage, and the industry concentration is expected to increase rapidly. It is generally believed that the following three directions will be the key for related companies to improve profitability, increase added value, and continue to grow:

1) Diversified and high-end products, from the production of extensive low-end intermediates to refined high-end intermediate products;

2) Take the road of professional outsourcing services, continue to extend on the outsourcing service industry chain, and undertake R & D outsourcing services;

3) Focus on pharmaceuticals and attack the APIs and preparations downstream of the intermediates.