00:00 China's clear goal to become the world's number one, also when it comes to its domestic
00:07 pharmaceutical industry.
00:08 The world is becoming ever more dependent on medicine from China.
00:12 The Chinese have been very clever.
00:15 Will the world soon be completely dependent on China for medical supplies?
00:19 Will pharmaceutical exports then be used as political leverage?
00:26 Always be cheap.
00:27 With this motto, the Chinese pharmaceutical industry has grown rapidly, and the West has
00:32 helped a lot.
00:35 The background to this is that we don't want to spend much money on medicine, even though
00:42 it's the cheapest form of therapy, and therefore production costs must be reduced.
00:51 And the easiest way to do that is to go to countries that have low labor costs, fewer
00:56 environmental regulations and lower costs for energy and the like.
01:03 A single pill now costs 6 Euro cents in Germany, as much as a stick of chewing gum.
01:09 Experts say that China now produces 40 percent of all active ingredients in the world, that
01:15 is the part of a drug responsible for its therapeutic effects.
01:19 And sometimes China is involved even if it doesn't seem so.
01:28 For example, the popular painkiller ibuprofen is produced at these locations around the
01:33 world.
01:35 It was in short supply during the pandemic.
01:40 It was also produced in India.
01:43 But the diversity is deceptive, as India imports almost all of the active ingredients it needs
01:49 from China.
01:52 The Chinese have a key competitive advantage over the others.
01:56 They now also produce most of the raw materials for the drugs, and they do so very cheaply
02:01 due to economy of scale.
02:03 Thanks to its price advantage, China is squeezing out foreign competitors, as in the case of
02:08 cephalosporins, which are antibiotics.
02:12 Even a German manufacturer with state-of-the-art production technology had no chance against
02:17 China.
02:19 Remarkably, only a few years ago we produced cephalosporins at the company Höchst.
02:26 But that's no longer the case, as the Chinese have been very clever.
02:31 They always undercut the price that Höchst was charging, until the then owner of Höchst,
02:36 a private equity company, eventually said it's not worth it, we'll stop production.
02:45 What were the consequences?
02:49 If you take a closer look at cephalosporins, there is a key base material, aminocephalic
02:54 perenoic acid, which is produced exclusively in China.
02:58 So if the Chinese decide that they no longer want to supply it to Europe, if we were to
03:03 side with Taiwan in the event of war, then we would be left empty-handed, so to speak,
03:08 in terms of cephalosporins.
03:11 Antibiotics are life-saving drugs.
03:17 And China wants even more.
03:19 It wants to be at the forefront of new medicines.
03:23 Experts say that China is now researching every tenth drug in the world that's in the
03:27 development phase.
03:29 I think they are much more innovation-friendly.
03:34 And I think that ultimately these bureaucratic processes, if they want to implement something,
03:40 then they will.
03:41 So the bureaucratic processes are much faster than ours.
03:45 And on the other hand, money, support and funding flows into what are referred to as
03:49 core industries.
03:55 Europe wants to bring back pharmaceutical production.
03:58 Here in France, a plant for paracetamol, a painkiller, is to be built to cover a third
04:04 of European demand.
04:05 But this is only possible thanks to high subsidies.
04:12 I think we first have to reach a consensus on which active ingredients we consider to
04:16 be important.
04:17 There are a lot of lists and many different active ingredients floating around.
04:22 I think we also have to be honest and acknowledge that it'll be more expensive and we'll have
04:28 to agree to pay X amount.
04:34 A single pill would probably be 10 to 20 Euro cents more expensive in Germany if it came
04:39 from Europe instead of China.
04:41 It's unknown whether patients anywhere in the world would be willing to pay more for
04:46 more independence from China.
04:47 [MUSIC PLAYING]
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