Pharmaceutical Products and Chemical Intermediates ... - IFPMA

Description of Products Covered by the Initiative
Pharmaceuticals (produced by firms in NAICS 3254, “Pharmaceutical and Medicine
Manufacturing”) 6 are used to prevent, diagnose, treat, or cure diseases in humans and
animals. Products included in the Pharmaceutical Agreement include dosage-form
pharmaceuticals, bulk active pharmaceutical ingredients, and certain chemical
intermediates used in the production of pharmaceuticals.
� Dosage-form pharmaceuticals are those that have been prepared in forms, such as
tablets or vials, that may be packaged for retail sale. They are generally sold to
the final customer either as generic or brand-name products, by prescription or
over the counter.
� Bulk active pharmaceutical ingredients are produced or purchased by
pharmaceutical firms and further processed into dosage-form products.
� The chemical intermediates included under the Initiative are generally organic
chemicals used as inputs in the production of pharmaceutical active ingredients.
Chemical intermediates are produced by either pharmaceutical firms or specialty
chemicals firms (NAICS 325199, “All Other Basic Organic Chemical
Manufacturing”) 7 and usually used by pharmaceutical firms to produce
pharmaceutical products. The closer a chemical intermediate is to the final
pharmaceutical, the more likely it is to be produced by a pharmaceutical firm. 8
Although large firms account for most pharmaceutical production and exports, industry
sources indicate that small and medium-sized enterprises that export benefit from the
Pharmaceutical Agreement in several ways, including (1) duty elimination, (2) ease of
program use, (3) the establishment of a “level playing field,” and (4) the establishment of
a consistent trading environment. 9 A brief profile of certain characteristics of the
chemical and pharmaceutical industries is provided in Box 1.1.
6
The North American Industry Classification System (NAICS) is the industry classification system
used by the U.S. Census Bureau and other statistical agencies. See U.S. Department of Commerce, Census
Bureau, North American Industry Classification System (NAICS).
7
NAICS 325199 comprises firms primarily engaged in manufacturing basic organic chemical products,
excluding aromatic petrochemicals, industrial gases, synthetic organic dyes and pigments, gum and wood
chemicals, cyclic crudes and intermediates, and ethyl alcohol. See U.S. Department of Commerce, Census
Bureau, North American Industry Classification System (NAICS).
8
Pharmaceutical companies may produce final and intermediate products by either fermentation,
traditional chemical synthesis, or a combination of the two. Specialty chemical companies that supply
intermediates to drug companies generally use traditional chemical synthesis. Future advances in
biotechnology may allow more specialty chemicals and pharmaceuticals to be produced via fermentation or
enzymatic processes. See USITC, Industrial Biotechnology, 2008.
9
See USITC, Small and Medium-Sized Enterprises, 2010, 5-7.
1-2