Ottawa, Feb. 17, 2023 (GLOBE NEWSWIRE) -- The active pharmaceutical ingredients market is anticipated to increase at a compound annual growth rate (CAGR) of 6% from 2023 to 2032. The increasing drug research and development efforts for drug manufacturing, the growing significance of generics, and the rising adoption of biopharmaceuticals are the main drivers of the active pharmaceutical ingredients market's growth.
Key Highlights
- North America region has generated market share of 39.5% in 2021.
- Asia Pacific region is poised to grow at a CAGR of 7.4% from 2022 to 2030.
- By type of manufacturer, the captive API segment has captured market share of 59.5% in 2021.
- By type, the innovative APIs segment has held market share of 66.4% in 2021.
- By application, the cardiovascular diseases segment has held 19.7% revenue share in 2021.
- The oncology segment is poised to grow at a CAGR of 8.5% from 2022 to 2030.
- By type of synthesis, synthetic API segment has generated 73% revenue share in 2021.
- The biotech segment is expanding at a CAGR of 7.4% between 2022 to 2030.
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Market Overview
The phrase "active pharmaceutical ingredient" (API) is used to describe the physiologically active portion of a medicine (e.g. tablet, capsule). A medication often consists of numerous parts. The API represents the main ingredient. Excipients are a general term for additional components. A medicine may occasionally contain multiple active pharmaceutical ingredients (APIs), and the patient's response will depend on the dosage that has been prescribed. Combination therapies employ two or more active substances to treat various ailments in various ways. When it comes to the production of pharmaceuticals, strict quality control is a requirement because the API is the primary factor taken into account when writing a prescription.
Numerous ground-breaking medications expected to lose their patent protection in the upcoming years are expected to impact the market for active pharmaceutical components. Future technology advancements will be required to maintain viability in high-volume, low-value environments. When outsourcing occurs, APIs are subject to strict regulations and scrutiny from the country they are sent to. For instance, the US Food & Drug Administration continues to conduct inspections of API manufacturing facilities abroad.
Regional Analysis
- In 2022, North America had the greatest revenue share (39.5%), and it is anticipated that it will continue to lead during the projection period. The increased prevalence of cancer and other ailments brought on by a sedentary lifestyle is to blame for this, which encourages R&D and expands the market.
- During the projection period, Asia Pacific is expected to have the quickest CAGR of 7.4%. A benefit for the area is the existence of economies like China and India, which the world depends on for the creation of APIs at a reduced cost. It is projected that rising healthcare spending in the area will drive market expansion.
- During the projection period, tremendous growth is anticipated in Europe. The presence of major market players locally and a rise in research funding are anticipated to fuel the industry in this area. Because of increased investments, there are more biopharmaceutical businesses in Europe.
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| Region | Revenue Share, 2022 (%) | |
| North America | 38.26 | % |
| Europe | 28.30 | % |
| Asia Pacific | 22.35 | % |
| LAMEA | 11.09 | % |
Competitive Landscape
The market for active pharmaceutical ingredients is extremely competitive and has a number of significant companies, which suggests a fragmented market environment. Due to their extensive industrial footprints, several manufacturers from China and India enjoy a prominent market position in the API market. Due to the presence of a thriving pharmaceutical and life sciences industry, Italy, Germany, and the UK are the primary regions for API commerce in Europe.
The majority of APIs made by well-known MNCs are utilized for captive production. A small number of businesses, though, have emerged as contract manufacturers with a wide range of customers. Furthermore, small and midsize businesses are expanding their market position by releasing new ingredients at competitive costs in response to rising technology breakthroughs and product improvements.
Key market players
- Merck & Co., Inc.
- AbbVie, Inc.
- Bristol-Myers Squibb Company
- Boehringer Ingelheim International GmbH
- Cipla, Inc.
- Teva Pharmaceutical Industries Ltd.
- Albemarle Corporation
- Viatris Inc.
- Aurobindo Pharma
- Sun Pharmaceutical Industries Ltd.
- Dr. Reddy’s Laboratories Ltd.
Market Dynamics of the Active Pharmaceutical Ingredients Market
Market Drivers
The significance of precision medicine
Precision medicine takes into account the variation in each person's environment, heredity, and lifestyle. This method has improved the accuracy of forecasting prevention and treatment plans for a specific disease in specific populations. The strategy makes ensuring that therapeutic or preventive actions are given to patients in a way that maximizes benefits and reduces costs and consequences. Clinical professionals, healthcare systems, pharmaceutical corporations, patients, and governments are all becoming more and more aware of precision medicine. Precision medical research has already produced a number of novel, FDA-approved therapies that are tailored to a person's unique traits.
Oncology ranks first among all therapeutic categories under the precision medicine focus area. Creating pharmacologically effective drug concentrations at the illness site while maintaining low drug concentrations in the rest of the body is the goal when conducting clinical trials for such novel medications.
Market Restraints: Drug pricing control measures that are not favorable
The majority of countries impose restrictions on reimbursement or profits in order to regulate pharmaceutical manufacturer prices, either directly (France and Italy) or indirectly (Germany and Japan) (UK). It is widely acknowledged that nations with stringent price controls have lower medicine prices than those with laxer regulations (such as the UK) or no regulations at all (US).
Over the past few years, pharmaceutical medicine prices have gradually risen all over the world. The US is a significant unregulated market for medical costs. However, several well-known nations have laws governing drug prices. Governments in a number of nations implement price controls to restrict expenditure on medications. However, these restricted medicine costs have a negative impact on pharmaceutical businesses' revenue. This in turn contributed to a reduction in R&D spending and lower new molecular entities (NMEs)
Market Opportunities: Growing market for biosimilars
The primary reasons propelling the growth of the biosimilars market are the rising prevalence of various diseases, the rise in off-patent biologic medications, promising results from current clinical trials of biosimilars, and the rising demand for biosimilars in various therapeutic applications. Since biosimilars are generic versions of proprietary biologic medications, they are exempt from many regulatory bodies' strict regulations. Over the following 10 years, it is anticipated that originator biologics' patents and other intellectual property rights will expire, providing opportunities for biosimilars to enter the market.
Report Highlights of the Active Pharmaceutical Ingredients Market
Manufacturing Insights
In 2022, the captive API market's revenue share was 59.5%, which was the highest. Due to the simple accessibility of raw materials and large investments made by key players to establish high-end manufacturing facilities, it is predicted to grow at a significant rate in the next years. Further evidence that important firms are more focused on internal production than outsourcing comes from recent developments and initiatives.
Major corporations are attempting to supply APIs to other drugmakers by utilizing their production capabilities in Asian nations. Along with major companies, the Indian government also intends to support indigenous API production.
Leading biopharmaceutical companies are in charge of the outsourcing market's significant expansion. Furthermore, players wishing to outsource their API production frequently choose nations like China and India due to their lower manufacturing costs.
Type Insights
In 2022, innovative APIs held the highest proportion (66.4%). This expansion is linked to increasing R&D initiatives for novel medicine development and favorable government laws. Numerous innovative items are currently being developed as a consequence of intensive research in this area and are anticipated to be on sale throughout the projected period. It is anticipated that new players in this sector will fuel market expansion. A desire for tailored medications is predicted to expand along with the demand for targeted therapies using high-potency API molecules, such HPAPI.
| Type | Revenue Share, 2022 (%) | |
| Generic APIs | 34.60 | % |
| Innovative APIs | 65.40 | % |
Type of synthesis Insights
With a share of 73% in 2022, the synthetic API segment had the biggest revenue. The easier techniques for the synthesis of these compounds and the greater availability of raw materials are credited with this. Additionally, a large number of synthetic chemicals are forecast to become no longer patentable in the upcoming years, which is likely to spur growth.
During the forecast period, it is expected that the biotech segment would experience considerable growth of 7.4%. The demand for biopharmaceuticals is rising, and these molecules are more effective, which are two drivers driving this market. Due to the market's strong profitability and significant revenue from APIs related to biotech, major firms are drawn to it. Biological therapy for metastatic renal cell cancer, for instance, is provided by Clinigen, Inc.'s Proleukin (aldesleukin).
Application Insights
In 2022, the sector for cardiovascular disorders had the highest revenue share (19.7%). This is explained by the target diseases' rising global prevalence. The World Heart Federation, the World Stroke Organization, and the Stroke Association are just a few of the groups aiming to raise awareness of cardiovascular disorders. During the projection period, the oncology section is expected to experience considerable growth of 8.5%. The market is being driven by elements including shifting lifestyles and the rising incidence of cancer. The incidence of numerous metabolic illnesses is being fueled by the rising acceptance of a sedentary lifestyle. In most nations, hormonal imbalance is becoming a significant concern. These conditions include imbalances in the thyroid and sex hormones. A common API used to treat hypothyroidism is levothyroxine. There are different kinds of hormonal therapy, including treatments for men undergoing cancer treatment, postmenopausal women, and youngsters to promote healthy growth. The market is also anticipated to grow as hormone-dependent aging issues become more prevalent.
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Recent Developments
- In December 2021, The Chasse-sur-Rhône, France, location of Novasepui, a provider of services and technologies for the life sciences industry, invested about EUR 6 million to upgrade its capabilities with regard to the newer generation APIs in fields like oncology, the central nervous system (CNS), and infectious diseases.
- In August 2021, The US Food and Drug Administration (FDA) granted Teva Pharmaceutical and MEDinCell's New Drug Application for TV-46000/mdc-IRM clearance (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 deal with Gilead Sciences Inc. to produce and supply Gilead's investigational antiviral remdesivir supporting efforts to scale up the supply of the investigational treatment for COVID-19.
- In April 2020, Northern Biologics was purchased by Boehringer Ingelheim. The oncology product line of Boehringer Ingelheim was expanded by this acquisition.
Market Segmentation
By Type of Synthesis
- Biotech
- Monoclonal Antibodies
- Recombinant Proteins
- Vaccines
- Synthetic
By Type of Manufacturer
- Captive APIs
- Merchant APIs
- Generic APIs
- Innovative APIs
By Type
- Generic APIs
- Innovative APIs
By Type of Drug
- Prescription Drugs
- Over-the-counter Drugs
By Application
- Cardiovascular Diseases
- Oncology
- CNS & Neurological Disorders
- Orthopedic Disorders
- Endocrinology
- Pulmonology
- Gastrointestinal Disorders
- Nephrology
- Ophthalmology
- Others
By Regional Outlook
- North America
- U.S.
- Canada
- Europe
- U.K.
- Germany
- France
- Asia Pacific
- China
- India
- Japan
- South Korea
- Middle East & Africa
- Latin America
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