Active Pharmaceutical Ingredients (API) Industry Overview
|Study Period:||2018 - 2028|
|Fastest Growing Market:||Asia-Pacific|
|Largest Market:||North America|
*Disclaimer: Major Players sorted in no particular order
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Active Pharmaceutical Ingredients (API) Market Analysis
The active pharmaceutical ingredients (API) market was valued at approximately USD 177.05 billion in 2021, and it is expected to reach USD 258.60 billion by 2027, registering a CAGR of nearly 7.50% during the forecast period 2022-2027.
In 2020, the COVID-19 outbreak had a favorable impact on the market as the countries and major players are manufacturing high amounts of ingredients to maintain demand for the treatment of COVID-19. The COVID-19 pandemic has led drug manufacturers to redirect their models to focus on a larger pool of patients. For example, the US requested that hydroxychloroquine (HCQ) be imported from India to treat coronavirus. The virus has also disrupted the drug supply chain in Canada and may cause problems for patients in the country. Canadian pharma majors are expanding their programs with countries other than China to access new regions.
The key factors boosting the growth of the active pharmaceutical ingredients market are the rising drug research and development activities for drug manufacturing, the increasing importance of generics, and the increasing uptake of biopharmaceuticals. However, the unfavorable drug price control policies across various nations and high manufacturing costs are expected to hinder the market’s growth.
The increasing prevalence of chronic diseases is expected to increase the demand for drugs, which is expected to fuel the active pharmaceutical ingredients market growth in the near future. According to the World Health Organization (WHO), cardiovascular diseases are the leading cause of death globally, accounting for an estimated 17.9 million lives each year.
The Alzheimer's Association stated that around 5.8 million people in the US were living with Alzheimer’s disease in 2020. This disease is the sixth-leading cause of death in the US and is more prevalent among people aged above 65 years (and approximately 5.6 million patients fall in this age bracket). With the baby-boomer 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.
Moreover, the launches of new drugs and biological products, acquisitions, collaborations, and regional expansions are some of the strategic initiatives being taken by the companies to maintain stability in the market. This is likely to fuel market growth in the near future. For instance, in 2020, Quartic.ai and Bright Path Labs collaborated to develop AI-based technology for the continuous manufacturing of critical APIs that are required for producing crucial small-molecule drugs.
The active pharmaceutical ingredients (API) market has traditionally been dominated by drugs, such as anti-infectives and diabetes, cardiovascular, analgesics, and pain management drugs. However, as per the R&D trends, the demand is shifting toward developing complex APIs used in novel formulations, targeting 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.
Active Pharmaceutical Ingredients (API) Industry Segments
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. The active pharmaceutical ingredients (API) market is segmented by business mode (captive API and merchant API), by synthesis type (synthetic and biotech), by type of drug (generic and branded), by application (cardiology, pulmonology, oncology, ophthalmology, neurology, orthopedic, and other applications), and by geography (North America, Europe, Asia-Pacific, Middle-East and Africa, and South America). The report also covers the estimated market sizes and trends for 17 different countries across major regions globally. The report offers the value (in USD billion) for the above segments.
|By Business Mode|
|By Synthesis Type|
|By Type of Drug|
Active Pharmaceutical Ingredients (API) Market Trends
This section covers the major market trends shaping the Active Pharmaceutical Ingredients (API) Market according to our research experts:
Cardiology Segment Expected to Hold the Largest Market Share
The pulmonology segment has been experiencing a high peak in growth due to the COVID-19 pandemic as the pharma sector is at the forefront in the combat against COVID-19 and has responded to this global challenge by guaranteeing the availability of medicines despite supply chain interruptions.
The 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 European Society of Cardiology 2019 Statistics, cardiovascular diseases (CVD) remain the leading cause of mortality and a major cause of morbidity in Europe. Currently, there are more than 6 million new cases of CVD in the EU and more than 11 million in Europe as a whole every year. With almost 49 million people living with the disease in the EU, the cost to the EU economies is high at EUR 210 billion a year.
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 affect a higher portion of the population during the forecast period. Market players are continuously developing new APIs to cater to the need in the oncology segment globally. In December 2019, Dr Reddy's Laboratories launched Bortezomib for injection, a generic version of Velcade of Millennium Pharmaceuticals, in the US market. Bortezomib is used to treat 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 to do so 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 US holds the majority of the market in the North American region.
With the drastic spread of COVID-19 in the country, the demand for drugs and ingredients increased, forcing the country to export many APIs from different countries, and local players also produced as per the demand. Most of its API requirements are met through imports from the Asian markets. The US trade statistics suggest that nearly 75-80% of the APIs imported to the US are from China and India, as these countries have well-established manufacturing facilities and a large talent pool serving the pharmaceutical sector.
The US government's recent political and trade policies to increase import duties and taxes are expected to drive operational costs and increase the pricing pressure on 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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Active Pharmaceutical Ingredients (API) Market Competitor Analysis
The active pharmaceutical ingredients market is highly competitive and consists of several major players, 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 UK are the key regions for API trade due to the presence of a well-developed pharmaceutical and life sciences sector.
Most of the APIs produced by reputed MNCs are used for captive production. However, a few players have emerged as contract manufacturers with a diversified client base. Further, with increasing technological advancements and product innovations, mid-size and small-scale companies are increasing their market presence by introducing new ingredients at competitive prices. Companies like Teva, Pfizer, Aurobindo, Sun Pharmaceuticals, Novartis, Mylan, and Boehringer Ingelheim hold substantial market shares in the active pharmaceutical ingredients market.
Active Pharmaceutical Ingredients (API) Market Top Players
Teva Pharmaceutical Industries Ltd
Sun Pharmaceutical Industries Ltd
*Disclaimer: Major Players sorted in no particular order
Active Pharmaceutical Ingredients (API) Market Recent Developments
In December 2021, Novasep, a supplier of services and technologies for the life sciences sector, invested around EUR 6 million in its Chasse-sur-Rhône site, France, to upgrade its capabilities with respect to the newer generation APIs in areas such as oncology, central nervous system (CNS), and infectious diseases.
In August 2021, Teva Pharmaceutical and MEDinCell received approval from the US Food and Drug Administration (FDA) for their New Drug Application of TV-46000/mdc-IRM (risperidone extended-release injectable suspension for subcutaneous use). The drug is being used for the treatment of schizophrenia.
In August 2020, Pfizer Inc. announced a multi-year agreement with Gilead Sciences Inc. to manufacture and supply Gilead’s investigational antiviral remdesivir supporting efforts to scale up the supply of the investigational treatment for COVID-19.
In April 2020, Boehringer Ingelheim acquired Northern Biologics. This acquisition broadened Boehringer Ingelheim’s oncology product portfolio.
Active Pharmaceutical Ingredients (API) Market Report - Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.2.1 Increasing Prevalence of Infectious, Genetic, Cardiovascular, and Other Chronic Disorders
4.2.2 Increasing Adoption of Biologicals and Biosimilars
4.2.3 Rising Prevalence of Cancer and Increasing Sophistication in Oncology Drug Research
4.3 Market Restraints
4.3.1 Drug Price Control Policies across Various Countries
4.3.2 High Competition between API Manufacturers
4.3.3 Stringent Regulations
4.4 Industry Attractiveness - Porter's Five Forces Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION (Market Size by Value – USD million)
5.1 By Business Mode
5.1.1 Captive API
5.1.2 Merchant API
5.2 By Synthesis Type
5.3 By Type of Drug
5.4 By Application
5.4.7 Other Applications
5.5.1 North America
188.8.131.52 Rest of Europe
184.108.40.206 South Korea
220.127.116.11 Rest of Asia-Pacific
5.5.4 Middle-East and Africa
18.104.22.168 South Africa
22.214.171.124 Rest of Middle-East and Africa
5.5.5 South America
126.96.36.199 Rest of South America
6. COMPETITIVE LANDSCAPE
*List Not Exhaustive
6.1 Company Profiles
6.1.1 Aurobindo Pharma
6.1.2 Teva Pharmaceutical Industries Ltd
6.1.3 Pfizer Inc.
6.1.4 Novartis AG
6.1.5 BASF SE
6.1.6 Boehringer Ingelheim GmbH
6.1.7 Dr. Reddy’s Laboratories Ltd
6.1.8 Lupin Ltd
6.1.9 Mylan NV
6.1.10 Sun Pharmaceutical Industries Ltd
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
Active Pharmaceutical Ingredients (API) Market Research FAQs
What is the study period of this market?
The Active Pharmaceutical Ingredients (API) Market is studied from 2018 - 2028.
What is the growth rate of Active Pharmaceutical Ingredients (API) Market?
The Active Pharmaceutical Ingredients (API) Market is growing at a CAGR of 7.5% over the next 5 years.
What is Active Pharmaceutical Ingredients (API) Market size in 2018?
The Active Pharmaceutical Ingredients (API) Market is valued at 177 Million USD in 2018.
What is Active Pharmaceutical Ingredients (API) Market size in 2028?
The Active Pharmaceutical Ingredients (API) Market is valued at 258 Million USD in 2028.
Which region has highest growth rate in Active Pharmaceutical Ingredients (API) Market?
Asia-Pacific is growing at the highest CAGR over 2018 - 2028.
Which region has largest share in Active Pharmaceutical Ingredients (API) Market?
North America holds highest share in 2021.
Who are the key players in Active Pharmaceutical Ingredients (API) Market?
Teva Pharmaceutical Industries Ltd, Sun Pharmaceutical Industries Ltd, Novartis AG, Pfizer Inc., Mylan NV are the major companies operating in Active Pharmaceutical Ingredients (API) Market.
Active Pharmaceutical Ingredients (API) Industry Reports
In-depth industry statistics and market share insights of the Active Pharmaceutical Ingredients (API) sector for 2020, 2021, and 2022. The Active Pharmaceutical Ingredients (API) research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the Active Pharmaceutical Ingredients (API) report PDF.