Active Pharmaceutical Ingredients Market

Global Active Pharmaceutical Ingredients Market Size (2021 to 2026)

As per our analysis report, the global active pharmaceutical ingredients market size is expected to be growing at a CAGR of 6.3% from 2021 to 2026. This market is estimated to value USD 340.16 billion in 2021 and USD 461.6 billion by 2026.

The active pharmaceutical ingredients are chemically and biologically active components of drugs directly affecting mitigation, cure, prevention, and treatment of diseases. Chemical synthesis, fermentation, biotechnological approaches, and improved natural sources are all used to create APIs. The API represents the primary ingredient. Excipients are a term used to describe other substances. Medicine may include numerous APIs, and the impact on a patient is determined by the dose administered, which varies from person to person. Two or more active substances are used in combination treatments to treat different symptoms in various ways. Since the API is the key component examined when writing a prescription, strict quality control is a must for medication manufacture. There are two main processes in the production of pharmaceuticals. Manufacturers turn raw ingredients into APIs in the first phase. The last step entails combining APIs and excipients into tablets, capsules, solutions, and other forms and packaging the medicine for usage by end-users. APIs are either sold on the open market (also known as the merchant market) or used as inputs in final formulations by manufacturers.

MARKET DRIVERS:

Y-O-Y growth in the incidence of chronic diseases, the growing importance of generics, and increased uptake of biopharmaceuticals are majorly accelerating the growth rate of the global active pharmaceutical ingredients market.

In the last few decades, there is an increase in incidences of chronic diseases such as coronary artery disease, diabetes, chronic obstructive pulmonary disease (COPD), arthritis, hepatitis, cancer, and asthma across the globe, which is estimated to drive demand for the global active pharmaceutical ingredients market growth. The rise in the geriatric population over the globe, changes in lifestyle, and diet changes due to rapid urbanization are significant factors contributing to the market's growth.

Favorable government policies with many preparations for drug activities and a hike in the prices are significant positive signs for the global active pharmaceutical ingredients market growth. Companies cannot prepare a generic drug unless the patent of the drug expires. Besides, the emerging biosimilar market, the growing reach of HPAPI solutions, emerging markets, and emerging technologies have opened up a range of opportunities for the global active pharmaceutical ingredients market growth.

MARKET RESTRAINTS:

Strict regulatory requirements and unfavorable drug price control policies can slow down the global active pharmaceutical ingredients market in several countries.

Additionally, the major restraint in the global active pharmaceutical ingredients market is the high costs of manufacturing APIs. However, to improve manufacturing facilities, increased investments are needed for key players to comply with standards like CGMP. Renovation of product facilities, inculcating familiarity with the requirement of qualification processes. In addition to that, there is a high expenditure to obtain regulatory approvals from authorities. Even chemical synthesis of APIs also requires high expenses, and uncommon building blocks and raw materials add to manufacturing costs. 

MARKET CHALLENGES:

Factors such as lessening or shortening the developing time, cost of the development to be reduced, improving the process design, and compromising the gain or profits, a meeting of the standard quality are the challenges on the other side. The global active pharmaceutical ingredients market is marked by violent criminal competition, and it is challenging.

MARKET OPPORTUNITIES:

The global active pharmaceutical ingredients market is providing opportunities for the emerging biosimilars market. Due to the rise in various diseases' incidences, numerous off-patent biologics demands for biosimilars in different therapeutic applications are incremented. Over the next decade, expecting the expiration of patents and other intellectual property rights for biologics originators is growing, many biosimilars opportunities help enter the API market.

Impact of COVID-19 on the global API market:

After the WHO's declaration, a mixture of pharmaceutical and biopharmaceutical companies is established, and a few start-ups stepped forward to treat target diseases. In a few weeks, scientists found a list of molecules targeting COVID-19. Growth in funds and the development of research of products are driving the market growth. However, the active pharmaceutical ingredients market is affected by COVID-19 in many ways, especially economically. COVID-19 impacted the active pharmaceutical ingredients market in financial gain. Moreover, the supply chain of manufactured products is affected by the COVID-19 pandemic and expected that the active pharmaceutical ingredients market would regain the loss that occurred by the pandemic. The active pharmaceutical ingredients market should be on track in the upcoming years.

REPORT COVERAGE:

This research report on the global active pharmaceutical ingredients market has been segmented and sub-segmented based on the type of manufacturing process, type of synthesis, API formulation, application, molecules, and region.

API Market - By Type of Manufacturing Process:

• Captive Manufacturing
• Contract Manufacturing

Based on the manufacturing process, the captive manufacturer's segment is estimated to account for the largest share in 2020. The large share of this segment can be attributed to companies' growing preference to maintain in-house manufacturing of innovative APIs for their economic benefits. Intensive capitalization of key players and the easy availability of raw materials to develop high-end manufacturing facilities further support the segment's growth.

API Market - By Type of Synthesis:

• Synthetic
• Biotech

On the type of synthesis, the synthetic segment is expected to be the largest in 2020. The emergence of new molecules in the market, the increasing number of approvals for new products, and technological advances in the synthesis method are the main contributors to Segment growth. However, the biotechnology API segment is expected to grow at the highest CAGR during the forecast period.

API Market - By API Formulation:

• Generic API
• Innovative API

Based on API formulation, the innovative API segment is expected to account for the majority in 2020. The large share of this segment can be attributed to the increasing number of FDA approvals for new molecular entities, higher price commanded by innovative APIs as compared to their generic equivalents, and growing focus of innovator APIs companies on R&D for the development of novel, innovative API products to cater to the unmet medical needs of the Global active pharmaceutical ingredients market.

API Market - By Application:

• Cardiovascular Diseases
• Oncology
• Neurological Disorders
• Orthopedic Disorders
• Respiratory
• Gastrointestinal Disorders
• Urology
• Others

API Market - By Molecule:

• Large Molecule
• Small Molecule

API Market - By Region:

• North America
• Europe
• Asia Pacific
• Latin America
• The Middle East and Africa

Regionally, the North American Active pharmaceutical ingredients market is predicted to dominate the global API market during the forecast period due to technological advancements and the high development of the economy. Moreover, the increase in the prevalence of cancer diseases and other diseases related to lifestyle to encourage R& D activities propels the market's demand.

The Asia-Pacific API market is expected to register a high growth rate compared to other regions during the forecast period in the global active pharmaceutical ingredients market. Factors such as increasing healthcare expenditures, a growing aging population create a vast patient pool and rising economies in this region. Additionally, key players' initiatives in setting API manufacturing plants in developing countries like India and China and laborers' availability contribute to growth in the Asia-Pacific region.

China is considered to be the leader in API manufacturing in the APAC region. There are many domestic companies involved in the manufacturing and supplying of API all over the world. Not just in the Asia-Pacific region, China exports a significant share of its domestically produced API worldwide.

KEY MARKET PLAYERS:

List of key market participants leading the global active pharmaceutical ingredients market profiled in this report is Sanofi, Bayer AG, Pfizer Inc., F. Hoffmann-La Roche AG, Abbott Laboratories, Merck & Co., Inc., Boehringer Ingelheim GmbH, GlaxoSmithKline Plc (GSK), Novartis AG, Eli Lilly and Company and Teva Pharmaceutical Industries Ltd.

RECENT MARKET DEVELOPMENTS:

• In 2020, to manufacture and supply Gilead's antiviral drug (Remdesivir), a multilayer agreement was signed by Pfizer (US) with Gilead Sciences for the treatment of COVID-19. 
• In 2020, an acquisition was made by Novartis with Aspen's Japanese operations to strengthen its position globally by generics and the off-patent medicines market. Already Novartis agreed to manufacture and supply with Aspen. 
• In 2020, to focus on therapeutic antibodies by targeting the tumor microenvironment, an acquisition was made by Boehringer Ingelheim (Germany) with Northern Biologics. 
• On February 26, 2020, Sun Pharmacy launched the Riomet ER in the U.S. as an adjunct to diet and exercise to improve glycemic control.
• On February 18, 2020, Boehringer- Ingelheim launches patient Centric MyStudioWindow powered by Carebox.
• On February 07, 2020, Dr. Reddy’s and subsidiaries launched the Trientine Hydrochloride Capsules, USP, 250, approved by the FDA. 
• On February 07, 2020, Dr. Reddy and their unit entered the Amendment of Agreement with Aurigene Discovery Technologies.
• On February 27, 2020, Dr. Reddy’s Laboratories announced the launch of naproxen and esomeprazole magnesium delayed-release tablets, which the FDA approved. 
• In June 2019, Primal Pharma solutions announced its lab space extension of its Michigan, a U.S-based facility. This facility is dedicated to the high power of something to influence the active pharmaceutical ingredients.