Pharmaceutical Formulation Intermediates vs APIs : What's Best?

A Pharmaceutical Formulation Intermediate (or PFI) is a blend of active substances and excipients, oftentimes in a powdered form. An Active Pharmaceutical Ingredient (or API), on the other hand, is the active component of the drug that acts on the symptoms of a disease. APIs work in coordination with inactive ingredients, which have no direct effect in healing one’s health condition, but are necessary for its production. For instance, dye is an example of an inactive ingredient as it doesn’t heal the body but is used in a pill to lend it a certain color.

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API refers to the key ingredient or chemical that makes the drug work. While a finished formulation or a formulation intermediate is the process in which different chemicals including the active ingredients are mixed in specific ratios to produce a specific drug.If you consider the example of a Paracetamol 500mg tablet, the API or the active component is the 500mg of paracetamol. However, in addition to Paracetamol, the tablet may also contain some colorants, fillers, preservatives, binders, etc. These other ingredients include maize, starch, stearic acid, soluble starch, povidone, etc. which are known as PFIs for their necessary production.

Understanding the legal part of things From the pharmaceutical management point of view, APIs must be registered with the Drug Regulatory Authority, according to the law, and synthesized in a GMP-compliant plant after obtaining the approval number.In general, both APIs and PFIs are manufactured by pharmaceutical companies in their home countries. But in recent years, many companies have chosen to shift their manufacturing overseas to reduce costs.

PFI or API – the challenger for a big pharma company?

‍A big pharmaceutical company generally deals with around 200 to 250 suppliers all over the world for its API formulation. Dealing with so many suppliers is challenging and expensive to run economically. Due to these differences in costs and time, along with hectic supply chain management, many API providers are buying finished formulation companies and vice-versa, resulting in cross consolidation. And it has also been noted that dealing with the core task of API cannot make it economically feasible due to high technical and testing costs.

Choosing to partner with an external vendor forPFIs is more profitable If giant drug manufacturers want to save on expenses to curb overspending, they might need to cut short the number of suppliers they work with. Especially in tough times like the Covid pandemic or any other unexpected events. However, if there is a cross consolidation between APIs and PFIs, in terms of supply chain management perspective, then they will not have to deal with multiple suppliers like earlier.

Moreover, many pharmaceutical companies are located in the UK and US, while most API and PFI manufacturers are located overseas. Because finished dosage manufacturers purchase APIs from suppliers and manufacture PFIs in-house, the cost incurred for its technical production is way high, increasing their testing costs as well. That said, drug manufacturers these days prefer purchasing PFIs from a specialized manufacturer, to reduce the cost and increase their RoI, so that they don’t have to make PFIs in-house and invest in machinery and manpower.

About ZIM Laboratories

In the global pharmaceutical supply chain, sales professionals specializing in Active Pharmaceutical Ingredients (APIs) and pharmaceutical intermediates play a crucial role. To excel in this competitive and dynamic international market, continuous enhancement of skills and knowledge is essential. Here are some key strategies to advance your career in pharmaceutical foreign trade sales:

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A thorough understanding of the chemical properties, production processes, quality standards, and applications of the APIs and intermediates you sell is fundamental to building trust with clients. Staying informed about global pharmaceutical regulations, market trends, and policy changes enables you to make informed decisions in the international marketplace. For instance, being familiar with the “Guidelines for the Development of the Pharmaceutical Industry” can provide insights into industry directions.

Engaging with clients from diverse cultural backgrounds is a daily aspect of international sales. Understanding and respecting cultural differences, coupled with effective communication techniques, can prevent misunderstandings and foster successful collaborations. Proficiency in negotiation is also vital to secure favorable terms and achieve mutually beneficial agreements.

Comprehensive knowledge of international trade procedures—including contract negotiation, payment methods, logistics, and tariff policies—is crucial for smooth transactions. In the pharmaceutical sector, familiarity with various countries’ drug registration and certification requirements is necessary to ensure compliance and avoid trade barriers. Understanding guidelines such as the “Export Commodity Technology Guide for Drug Registration” can facilitate market entry. 

In today’s digital era, online platforms are effective tools for accessing international markets. Specialized B2B platforms like Drugdu.com connect global pharmaceutical suppliers and buyers, offering extensive product information and trade opportunities. By registering and optimizing your company profile on such platforms, you can efficiently connect with global buyers and expand your business footprint.

Artificial Intelligence is transforming the pharmaceutical trade industry. Tools like DeepSeek, Manus, DrugduAI, and ChatGPT assist sales professionals in rapidly processing and analyzing large datasets, accurately identifying target markets, and enhancing work efficiency. For example, DeepSeek can aid in market analysis and customer demand forecasting, optimizing your sales strategies.

The pharmaceutical industry is constantly evolving, making ongoing education vital for maintaining a competitive edge. Participating in industry seminars, training programs, and staying updated with professional publications can help you acquire the latest knowledge and skills. Additionally, actively engaging in industry associations and online forums can expand your professional network, creating more business opportunities.

Contact us to discuss your requirements of what is a feed additive. Our experienced sales team can help you identify the options that best suit your needs.