Saudi Arabia Active Pharmaceutical Ingredients (API) Market Size

Saudi Arabia Active Pharmaceutical Ingredients (API) Market Analysis

The Saudi Arabian Active Pharmaceutical Ingredients (API) market is expected to register a CAGR of 2% over the forecast period.

The COVID-19 pandemic has not only impacted the entire pharmaceutical supply chain, but more specifically, it disrupted the supply of APIs from India and China. This has increased the cost of many prescription medications and a shortage of essential drugs. For instance, from an article published in July 2021, there was a shortage of essential medications, such as antibiotics, vitamins, hormones, anti-cancer, anti-hypertensives, anti-diabetics, and steroids, in the country due to the high reliance on India and China for APIs. However, with the released COVID-19 restrictions and the country's resumed import and export activities, the studied market is expected to grow over the forecast period.

Certain factors propelling the market growth are the increasing prevalence of infectious, genetic, cardiovascular, and other chronic disorders, the growing geriatric population, and the expanding adoption of biologics and biosimilars in the country.

The rising burden of infectious and chronic diseases is the key factor driving the market growth. To assess the highest burden of mental disorders, a household survey was conducted by the Saudi National Mental Health Survey (SNMHS). Its report published in February 2022 assessed that neurological disorders, including Parkinson's and epilepsy, were associated with the highest individual-level numbers of days-out-of role. The high burden of Parkinson's disease as a mental disorder among the Saudi population is expected to raise the demand for better treatment drugs. This is anticipated to boost the demand for active pharmaceutical ingredients for manufacturing drugs, propelling the market growth.

The growing geriatric population more prone to developing infectious and other chronic diseases is also contributing to the market growth. For instance, according to the 2022 statistics published by UNPFA, about 72% of the population in Saudi Arabia is between 15-64 years, and 4% is 65 years or above. The data published by MIT Technology Review in June 2022 stated that the population of Saudi Arabia population is aging at an accelerated rate. Thus, the high aging population increases the need for effective drugs for treating various chronic and infectious diseases. This is anticipated to propel the demand for active pharmaceutical ingredients, boosting the market growth.

Furthermore, the healthcare system in the country is actively seeking ways to lower costs and raise revenues. Innovative formulary management provides a way to save prescription prices without sacrificing patient care. Specialty pharmaceuticals are one prominent area in which cost reductions would make a significant difference because of the high cost of biologics, which results in a disproportionate contribution to the total national drug spending. Thus, using less expensive biosimilars offers a chance to reduce drug costs and spending on biologics without compromising patient outcomes. For instance, from a study published in Healthcare Journal in July 2021, it has been observed that researchers in Saudi Arabia recommend utilizing trastuzumab biosimilars rather than the reference product (Herceptin) for treating patients with breast cancer. This switch to biosimilar drugs helps to reduce the high healthcare costs associated with the disease in the country. This is anticipated to increase the production of biosimilar drugs which is further expected to increase the demand for API in the country over the forecast period.

Moreover, the rising company focus on developing pharmaceutical products, increasing drug approvals, and investments in the country contribute to market growth. In November 2021, BeiGene, and NewBridge Pharmaceuticals stated that BRUKINSA (zanubrutinib) received approval from the Saudi Food and Drug Authority (SFDA) for the treatment of adult patients with mantle cell lymphoma (MCL) who have received at least one prior therapy.

Therefore, owing to the aforementioned factors, the studied market is expected to grow over the forecast period. However, the country's stringent regulations and drug price control policies are expected to impede the growth of the active pharmaceutical ingredients industry in Saudi Arabia over the forecast period.