Active Pharmaceutical Ingredients Market Size & Share to Surpass $308.96 Billion by 2028 | Vantage Market Research

WASHINGTON, April 09, 2023 (GLOBE NEWSWIRE) -- Global Active Pharmaceutical Ingredients Market is valued at USD 189.51 Billion in 2021 and is projected to reach a value of USD 308.96 Billion by 2028 at a CAGR (Compound Annual Growth Rate) of 6.30% over the forecast period 2022-2028.

Market Overview

The Active Pharmaceutical Ingredient (API) market plays a critical role in the production of drugs and is gaining significant attention in the pharmaceutical industry. APIs, also known as bulk drugs, are manufactured through chemical or biological processes and are used in drug production to achieve the intended therapeutic effect. With the increasing focus on innovative and advanced therapeutic drugs by various pharmaceutical and biotechnology companies, the API market is expected to have a positive outlook in the coming years.

One of the key drivers of the API market is the rising prevalence of chronic diseases and the growing demand for personalized medicine. Additionally, the emergence of novel drug delivery devices is expected to play a crucial role in boosting the market growth during the forecast period. However, in recent years, several pharmaceutical and biotech companies have shifted their manufacturing facilities overseas to reduce costs. This has led to changes in regulatory guidelines for production and manufacturing. Such trends are expected to further drive the growth of the global API market in the coming years.

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Active Pharmaceutical Ingredients Market Dynamics

The Active Pharmaceutical Ingredient (API) market is witnessing significant growth, fueled by the growing adoption of AI-based tools for drug discovery. AI is being used in target discovery, early drug discovery, and data analysis to generate novel insights and identify new drug candidates. With the increasing applications of AI in the pharmaceutical industry, the API market is expected to grow further in the near future.

Another factor contributing to the growth of the API market is the increasing incidence of chronic diseases. According to the World Health Organization (WHO), non-communicable diseases (NCDs) account for 71% of all deaths globally, with more than 15 million people dying from NCDs between the ages of 30 and 69 years. Cardiovascular diseases, cancers, respiratory diseases, and diabetes are among the leading causes of NCD deaths. As the occurrences of these diseases are increasing, the demand for more precise and effective drugs is also on the rise. This trend is expected to support the growth of the API market in the coming years.

The Active Pharmaceutical Ingredient (API) market is experiencing rapid growth due to the rising burden of chronic diseases across the globe, especially among the geriatric population. The market is seeing a significant demand for therapeutic drugs, with the Indian pharmaceutical sector covering over 50.0% of the global demand for several vaccines and 40% of the U.S. generic brand's demand, according to the Indian Brand Equity Foundation. Furthermore, China's pharmaceutical industry is the second fastest growing after India, and the demand for innovative drugs, including biological drugs, is driving the market growth during the forecast period.

The import of raw pharmaceutical ingredients from developing countries for the development of highly-advanced biopharmaceutical products is increasing. Many pharmaceutical firms are focusing on research and development activities to introduce innovative drugs in the market, which is expected to further drive the active pharmaceutical ingredient market growth.

The rising prevalence of infectious diseases and chronic disorders globally is expected to boost the demand for APIs for the development of innovative drugs. The increase in per capita healthcare expenditure in emerging countries and the rise in diagnosis rates is driving the demand for pharmaceutical drugs. This demand is also expected to drive the demand for generic and branded products in the active pharmaceutical ingredient market.

In summary, the Active Pharmaceutical Ingredient market is growing due to the increasing demand for therapeutic drugs, innovation in the industry, and the rising prevalence of chronic diseases worldwide. The market is presenting potential opportunities for pharmaceutical and biotechnology industries to produce dosage forms of new chemical entities in high-end therapy areas such as oncology and cardiovascular diseases.

Top Players in Global Active Pharmaceutical Ingredients (API) Market

  • Cipla, Inc.
  • Novartis International AG
  • AstraZeneca
  • Dr. Reddy’s Laboratories Ltd.
  • Boehringer Ingelheim
  • Teva Pharmaceutical Industries Ltd.
  • Merck & Co., Inc.
  • Eli Lilly and Company
  • F. Hoffmann-La Roche Ltd.
  • Mylan N.V.
  • AbbVie Inc.

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Company Insights

In an attempt to provide APIs to other drug makers, major companies are looking to leverage their production capabilities in Asian countries. Along with major players, the government of India is also providing impetus to domestic API manufacturing. For instance, in March 2020, the Indian government announced a 9.4 billion package for the bulk drug industry, aimed at boosting domestic production and exports.

The outsourcing segment is also witnessing substantial growth, with top biopharmaceutical players leading the charge. Developing countries like India and China are becoming popular choices for companies looking to outsource their API production due to the lower cost of manufacturing. Outsourcing to developing countries is a cost-effective measure that allows companies to gain higher profits, which is accelerating segment growth.

As a leading player in the global Active Pharmaceutical Ingredient (API) market, Pfizer offers a wide range of products, which has helped establish its strong brand image and competitive advantage. The company's focus on both organic and inorganic growth strategies, including partnerships, agreements, collaborations, product endorsements, and acquisitions, has enabled it to maintain a strong market position and competitive edge against other companies in the industry. With its comprehensive product offerings and continued efforts to reinforce its market position, Pfizer remains a major player in the API market.

Key Challenges Facing the Active Pharmaceutical Ingredient Market:

The Active Pharmaceutical Ingredient (API) market faces significant challenges that impact its growth trajectory. One of the key constraints is the high cost associated with the production and distribution of APIs. The industry struggles to maintain innovation and competition due to the protection of intellectual property rights, which can lead to a shortage of affordable APIs and restrict access to medication for a large segment of the population.

The cost of raw materials and the extensive research and development required to develop effective APIs are also factors that limit the growth potential of the industry. The political tensions and dynamics that impact the pricing of raw materials further add to the cost pressure.

In addition, the absence of laws to reinforce regulatory procedures has raised concerns about the availability of poor-quality products. This can lead to a loss of trust among stakeholders, creating further challenges during the projection period.

To gain more information about the Active Pharmaceutical Ingredient market and make informed decisions regarding market growth, contact Vantage Market Research for an analyst brief. Our team can help you understand the latest developments, trade regulations, market size, product approvals, and geographic expansions, among other things.

Active Pharmaceutical Ingredient Market Opportunities

  • Rising disposable income: The rising disposable income of people in developing countries is leading to an increase in the demand for healthcare services. This is expected to drive the demand for APIs used in these services.
  • Government initiatives: Governments in many countries are promoting the use of generic drugs in order to reduce healthcare costs. This is expected to drive the demand for APIs used in generic drugs.
  • Regulatory changes: The regulatory environment in the pharmaceutical industry is constantly changing. This is leading to new opportunities for API manufacturers.

Top Report Findings

  • The global active pharmaceutical ingredients (API) market size is expected to reach USD 308.96 Billion by 2028, registering a CAGR of nearly 6.30% during the forecast period 2022-2028.
  • The growth of the API market is attributed to the increasing prevalence of chronic diseases, the rising demand for generic drugs, and the technological advancements in the API manufacturing process.
  • Increasing prevalence of chronic diseases is one of the major factors driving the growth of the API market. The rising incidence of chronic diseases, such as cancer, cardiovascular diseases, and diabetes, is leading to an increase in the demand for APIs used in the treatment of these diseases.
  • Rising demand for generic drugs is another major factor driving the growth of the API market. Generic drugs are cheaper than branded drugs and are often used as a cost-effective alternative. The demand for generic drugs is expected to increase in the coming years, driven by factors such as rising healthcare costs, government initiatives to promote generic drug use, and increasing awareness about generic drugs.
  • Technological advancements in the API manufacturing process are also contributing to the growth of the API market. The development of new technologies for the synthesis of APIs is leading to the development of new APIs, which are more effective and have fewer side effects.
  • The API market is segmented on the basis of type, application, and region. Based on type, the market is segmented into small molecules, large molecules, and biosimilars. Small molecules are the most common type of API, accounting for the largest share of the market. Large molecules are used to treat complex diseases, such as cancer and autoimmune disorders. Biosimilars are copies of biologic drugs, which are made from living cells.

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Top Trends in Active Pharmaceutical Ingredient Market

The Active Pharmaceutical Ingredient (API) market is rapidly growing worldwide, with many countries implementing strict regulatory guidelines to ensure high-quality API production. These guidelines aim to improve the clinical effectiveness of final products. Due to the rising costs of in-house API manufacturing, many pharmaceutical companies are outsourcing their API production processes to Asia Pacific countries, such as China and India. This outsourcing is considered a cost-effective alternative to manufacturing in western countries.

Various manufacturers have already established their presence in China and India, prompting biopharmaceutical industries to seek partnerships with Contract Development and Manufacturing Organizations (CDMOs). CDMOs like AGC Biologics possess technical expertise and capabilities for large-scale API manufacturing, which is expected to drive the growth of the API market in the coming years.

As an example, in August 2020, AGC Biologics partnered with Ono Pharmaceutical Co., Ltd. for the production of innovative biopharmaceuticals during the clinical development stage. This collaboration is expected to contribute to the growth of the active pharmaceutical ingredient market in the near future.

Global Active Pharmaceutical Ingredient Market Segmentation

By Business Mode

  • Captive API
  • Merchant API

By Synthesis Type

  • Synthetic
  • Biotech

By Type Of Drug

  • Generic
  • Branded

Scope of the Report:

Report AttributesDetails
Market Size in 2021USD 189.51 Billion
Revenue Forecast by 2028USD 308.96 Billion
CAGR6.30% from 2022 to 2028
Base Year2021
Forecast Year2022 to 2028
Key PlayersCipla, Inc., Eli Lilly and Company, Merck & Co., Inc., Novartis International AG, Boehringer Ingelheim, Teva Pharmaceutical Industries Ltd., F. Hoffmann-La Roche Ltd.
Customization OptionsIf our report does not include the information you are searching for, you may contact us to have a report tailored to your specific business needs

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Recent Development in Active Pharmaceutical Ingredient (API) Market

The Active Pharmaceutical Ingredient (API) market is constantly evolving, with new developments and initiatives in the industry. APIs are the essential components of medications that provide therapeutic effects. They are the biologically active substances in a drug that are responsible for the treatment of diseases.

  • One recent development in the API market is the announcement by Everest Organics Limited, an India-based manufacturer of generic medicines, that they have started developing the API for the generic version of Molnupiravir. This medicine is an experimental antiviral drug used for the treatment of mild to moderate Covid-19 infections. This news is significant because the global demand for Covid-19 treatment is high, and the development of the generic API will make the drug more affordable and accessible to those in need.
  • In March 2022, the Indian Union Ministry announced that the production of 35 APIs had already begun in the country. This move was encouraged by a production scheme for the region’s pharmaceutical sector. These 35 APIs are part of the 53 APIs, for which the country currently has an import dependence of 90%. By producing more APIs domestically, India aims to reduce its reliance on imports, increase self-sufficiency, and boost its pharmaceutical sector's growth.
  • In February 2023, the US Food and Drug Administration (FDA) initiated new measures to restrict and control the illegal import of Xylazine APIs and associated finished products. This chemical is increasingly being incorporated into illicit drugs, leading to growing public health concerns. The FDA's action highlights the need for strict regulation and control of APIs to ensure drug safety and efficacy.

Key Questions Answered in Active Pharmaceutical Ingredients Market Report

  • What is the current size of the API market, and what is the expected growth rate in the coming years?
  • What are the major drivers, challenges, and opportunities shaping the API market?
  • What are the different types of APIs available in the market, and how are they classified?
  • Who are the major players in the API market, and what are their market shares and strategies?
  • What is the market segmentation by application, end-user, and region?
  • What are the latest trends and innovations in the API market, and how are they impacting the industry?
  • What are the regulatory frameworks and standards governing the API industry, and how are they evolving?
  • What are the major challenges facing API manufacturers and suppliers, and how are they addressing them?
  • What are the opportunities for API manufacturers and suppliers in different regions and applications?
  • What is the competitive landscape of the API market, and what are the key strategies adopted by the major players to stay ahead of the competition?

Regional Analysis

Asia-Pacific to witness the highest growth

The Active Pharmaceutical Ingredient (API) market is rapidly growing across the globe, with Asia-Pacific projected to witness the highest growth during the projection period. As the most dominant region in the industry, this growth is largely driven by countries like China and India, which have seen tremendous expansion in API production due to various factors.

These countries have a well-established pharmaceutical sector, particularly in the manufacturing wing, with large-scale production sites that serve clients globally. Moreover, their governments are taking significant steps to promote the industry and reduce dependence on imported medicines. The presence of a large pool of skilled professionals and supportive governmental regulations for API production in India and China also contribute to their growth.

Although Asia-Pacific leads the market, Europe and North America are also important contributors due to the growing research and product innovation activities. However, for those specifically interested in the Active Pharmaceutical Ingredient market, the growth and developments in Asia-Pacific are worth watching closely.

North America is currently the dominant region, accounting for the largest share of the global market. In 2020, the market size in North America was USD 76.77 billion and is expected to continue to grow during the forecast period.

The North American market's growth is driven by the increasing incidence of chronic diseases and government initiatives to develop innovative drugs. The demand for biological API is also rising due to the rapid adoption of biological drugs among patients for treating various chronic disorders. For example, Alzheimer's dementia affects approximately 6.2 million people aged 65 and above in the US, and this number is expected to increase to 12.7 million by 2050, contributing to the growth of the North American API market.

Meanwhile, the European region is also expected to see significant growth in the API market in the coming years. This growth is attributed to increased funding for research programs and the presence of major market players in the region. Pharmaceutical and biopharmaceutical companies' rising R&D programs are also expected to drive market growth in the region. For instance, the total pharmaceutical production of Europe was valued at USD 344,837.0 million in 2019, according to the European Federation of Pharmaceutical Industries and Associations (EFPIA).

Why Should You Buy this Active Pharmaceutical Ingredients Market Report?

  • This report provides you with an in-depth analysis of the API market, including its size, growth potential, and key trends.
  • This report also provides you with detailed information on the key players in the API market, their strategies, and their products.
  • This report will help you to make informed decisions about your business, such as whether to enter the API market or expand your existing operations in the market.
  • This report will also help you to identify and evaluate potential opportunities in the API market.
  • Finally, this report will help you to stay up-to-date on the latest developments in the API market.

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