Active Pharmaceutical Ingredients (API) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Active Pharmaceutical Ingredients (API) Market is segmented by Business Mode, Synthesis Type, Type of Drug, Application (Cardiology, Pulmonology, Oncology, Opthalmology, Neurology, Orthopedic, Other Applications), and Geography

Active Pharmaceutical Ingredients (API) Market Snapshot

Study Period:

2018 - 2026

Base Year:


Fastest Growing Market:

Asia Pacific

Largest Market:

North America


6.5 %

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Market Overview

Some of the key factors that are driving the API market include the increasing prevalence of infectious diseases, cardiovascular conditions, and other chronic and genetic disorders.

For instance, The Alzheimer's Association stated that around 5.8 million people in the United States were living with Alzheimer’s disease in 2018. This disease is the sixth-leading cause of death in the United States and is more prevalent among people above 65 years of age (and approximately 5.6 million patients fall in this age bracket). With the baby-boom generation reaching around 65 years of age, this number is expected to reach 14 million, worsening the situation over the forecast period. By 2050, a new case of the disease is expected to develop every 33 seconds. ​

The active pharmaceutical ingredients (API) market has traditionally been dominated by drugs, such as anti-infectives and the diabetes, cardiovascular, analgesics, and pain management drugs. However, as per the R&D trends, the demand is shifting toward the development of complex APIs used in novel formulations, targetting niche therapeutic areas.

The major factors limiting the market growth include drug price control policies across various countries, fierce competition among existing players, and stringent regulatory policies.​

Scope of the Report

Active pharmaceutical ingredient (API) is a part of any drug that produces its effects. Some drugs, such as combination therapies, have multiple active ingredients to treat different symptoms or act in different ways. They are produced using highly technological industrial processes, both during the R&D and the commercial production phase.

By Business Mode
Captive API
Merchant API
By Synthesis Type
By Type
By Application
Other Applications
North America
United States
United Kingdom
Rest of Europe
South Korea
Rest of Asia-Pacific
Middle East & Africa
South Africa
Rest of Middle East & Africa
South America
Rest of South America

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Key Market Trends

Cardiology is Expected to hold the Largest Market Share in the Application Category

The API market, by application, cardiology segment holds a significant share, due to the vast population using various CVD drugs owing to the high prevalence of cardiovascular diseases.

  • According to the American Heart Association Research Report 2017, about 92.1 million American adults are living with some form of cardiovascular disease or the after-effects of stroke. According to the World Health Organization, an estimated 17.9 million people died from CVDs in 2016, representing 31% of all global deaths. Of these deaths, 85% are due to heart attack and stroke. Over three-quarters of CVD deaths take place in low- and middle-income countries.
  • The oncology segment is also expected to grow significantly during the forecast period owing to the high prevalence of cancer in the last few decades, and the disease is expected to claim a more prevalent population during the forecast period.
  • Market players are continously developing new APIs to cater the need in oncology segment globally. In December 2019, Dr Reddy's Laboratories launched Bortezomib for injection in the US market a generic version of Velcade of Millennium Pharmaceuticals. Bortezomib is used for the treatment of adult patients with multiple myeloma or with mantle cell lymphoma who have received at least one prior therapy.

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North America Dominates the Market and is Expected to continue its dominance through the Forecast Period

North America currently dominates the market for active pharmaceutical ingredients and is expected to continue its stronghold for a few more years. This region is expected to increase its market share in the future, owing to the increasing incidences of disease and rising aging population. The United States holds the majority of the market in the North American region. However, the majority of its API requirements are met through imports from the Asian Markets. The US trade statistics suggest that nearly 75% to 80% of the APIs imported to the United States are from China and India, as these countries have well-established manufacturing facilities and an abundant talent pool serving the pharmaceutical sector.

The recent political and trade policies implemented by the US government to increase import duties and taxes are expected to drive operational costs and increase the pricing pressure on the manufacturers. The FDA has also increased the application fees for new drug approvals and has increased the number of periodic inspections conducted on various off-shore contract manufacturing facilities to ensure the supply of high-quality products to the US market.

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Competitive Landscape

The active pharmaceutical ingredients market is highly competitive, and consists of several major players; thus, indicating a fragmented market scenario. The API market has several manufacturers from China and India holding a dominant market position, due to their large manufacturing footprints. In Europe, Italy, Germany, and the United Kingdom are the key regions for API trade, due to the presence of a well-developed pharmaceutical and life sciences industry.

A majority of the APIs produced by reputed MNCs are used for captive production. However, few players have emerged as contract manufacturers with a diversified client base. Further, with increasing technological advancements and product innovation, mid-size and small-scale companies are increasing their market presence, by introducing new ingredients with competitive prices. Companies, like Teva, Pfizer, Aurobindo, Sun Pharmaceuticals, Novartis, Mylan, and Boehringer Ingelheim, hold substantial market shares in the active pharmaceutical ingredients market.

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Table Of Contents


    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Market Drivers

      1. 4.2.1 Increasing Prevalence of Infectious, Genetic, Cardiovascular, and Other Chronic Disorders

      2. 4.2.2 Increasing Adoption of Biologicals and Biosimilars

      3. 4.2.3 Rising Prevalence of Cancer and Increasing Sophistication in Oncology Drug Research

    3. 4.3 Market Restraints

      1. 4.3.1 Drug Price Control Policies Across Various Countries

      2. 4.3.2 High Competition Between the API Manufacturers

      3. 4.3.3 Stringent Regulations

    4. 4.4 Industry Attractiveness Porter's Five Forces Analysis

      1. 4.4.1 Threat of New Entrants

      2. 4.4.2 Bargaining Power of Buyers/Consumers

      3. 4.4.3 Bargaining Power of Suppliers

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry


    1. 5.1 By Business Mode

      1. 5.1.1 Captive API

      2. 5.1.2 Merchant API

    2. 5.2 By Synthesis Type

      1. 5.2.1 Synthetic

      2. 5.2.2 Biotech

    3. 5.3 By Type

      1. 5.3.1 Generic

      2. 5.3.2 Branded

    4. 5.4 By Application

      1. 5.4.1 Cardiology

      2. 5.4.2 Pulmonology

      3. 5.4.3 Oncology

      4. 5.4.4 Ophthalmology

      5. 5.4.5 Neurology

      6. 5.4.6 Orthopedic

      7. 5.4.7 Other Applications

    5. 5.5 Geography

      1. 5.5.1 North America

        1. United States

        2. Canada

        3. Mexico

      2. 5.5.2 Europe

        1. Germany

        2. United Kingdom

        3. France

        4. Italy

        5. Spain

        6. Rest of Europe

      3. 5.5.3 Asia-Pacific

        1. China

        2. Japan

        3. India

        4. Australia

        5. South Korea

        6. Rest of Asia-Pacific

      4. 5.5.4 Middle East & Africa

        1. GCC

        2. South Africa

        3. Rest of Middle East & Africa

      5. 5.5.5 South America

        1. Brazil

        2. Argentina

        3. Rest of South America


    1. 6.1 Company Profiles

      1. 6.1.1 Aurobindo Pharma

      2. 6.1.2 Teva Pharmaceutical Industries Ltd

      3. 6.1.3 Pfizer Inc.

      4. 6.1.4 Novartis AG

      5. 6.1.5 BASF SE

      6. 6.1.6 Boehringer Ingelheim GmbH

      7. 6.1.7 Dr. Reddy’s Laboratories Ltd

      8. 6.1.8 Lupin Ltd

      9. 6.1.9 Mylan NV

      10. 6.1.10 Sun Pharmaceutical Industries Ltd

  7. *List Not Exhaustive

**Competitive Landscape covers- Business Overview, Financials, Products and Strategies and Recent Developments

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