OTAWA,ON, Nov. 6, 2023 /PRNewswire/ -- The active pharmaceutical ingredients (API) market size was valued at USD 204.04 billion in 2023 and likely to hit around USD 363.68 billion by 2032, growing at a CAGR of 6.1% from 2023 to 2032.
An active pharmaceutical ingredient (API) is a drug's active component. API is an element of any medication that produces the expected effects. Medicines are usually made up of several constituents, and the essential part is the API. Excipients are other ingredients needed to be biologically harmless and commonly form a volatile portion of the drug result. Some drugs include active APIs to treat multiple symptoms or act in complex ways. Regional pharmaceutical firms have done the bulk of API preparation.
The API market was valued at 186.12 billion in 2020 and is expected to grow at a CAGR of 6.0%. Advancements in Active Pharmaceutical Ingredient (API) manufacturing, growth of biopharmaceutical sector, and increase in geriatric population are among key drivers of market growth. Rising prevalence of chronic diseases, such as cardiovascular diseases and cancer, is anticipated to boost the market growth.
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Data and statistics Active Pharmaceutical Ingredients Market
- The Department of Pharmaceuticals, India, has offered approval for bulk drug manufacturing in Himachal Pradesh, Andhra Pradesh and Gujrat under 'Promotion of Bulk Drug Parks' scheme that offers financial aids to capitalize the nation's active pharmaceutical ingredient production. Under the scheme, the government of Assam has estimated a pharmaceutical park with an investment of Rs.153.64 crores.
- In 2023, Boehringer Ingelheim invested $315 million in its new manufacturing facility for active pharmaceutical ingredients in Germany.
- In FY23, the drug export in India increased by 3.25% to $25.3 billion, according to the report by the Pharmaceuticals Export Promotion Council of India.
- In FY2022, the United States, UK and Russia were major export destinations for India's pharma industry; the United States held 29% share.
- With the emergence of generic medicines after the pandemic, the US Food and Drug Administration has witnessed 17% growth (as compared to 2022) in Drug Master Files (DMFs) submission. In the first half of 2023, a total of 410 Type II DMFs were submitted. China's submission of DMFs in the same period increased by 46.5%
- In 2023, Canadian government invested $80.5 million in federal funding to support Canadian Critical Drug Initiative for next five years. Under the initiative, Canada aims to create a robust manufacturing facility to develop approximately 70 million doses of critical medicines each year.
- The Government of India has started Production Linked Incentives (PLIs) scheme in order to supprot the domestic manufacturing of active pharmaceutical ingredients; the government has also approved an investment of $812 million for pharmaceutical and medical device manufacturing.
- A major manufacturer of API in India, Reddy's Laboratories Ltd. witnessed a 3% year-on-year growth in its pharmaceutical services and active pharmaceutical ingredients segment for the final quarter of 2023.
- Industry major Evonik invested €25 million to expand its manufacturing capacity for active pharmaceutical ingredients in Germany. The entire expansion project is aimed to be finalized by 2024.
- Evonik, in 2022, invested $220 million under a partnership with the US government for a new production facility. Tippecanoe is the chosen location for the new facility, which is the world's largest site for active pharmaceutical ingredients.
- Drug major Cipla, India, witnessed a 43.4% growth in its consolidated net profit (for the quarter ended in September 2023). While focusing on its active pharmaceutical ingredients' facilities, the company has stated its plans of capital expenditure worth ?1,500 crore.
Synthetic API market dominated the overall market in 2020 in terms of revenue share of 71.91%. Biotech molecule is expected to be the fastest growing segment and is anticipated to grow at a lucrative CAGR of 6.2% during the forecast period. Biotech molecule segment is driven by factors such as increasing demand for biopharmaceuticals and higher efficiency of these molecules. Rising R&D investments are also crucial for segment growth owing to development of highly potent molecules that can generate higher revenue.
Active Pharmaceutical Ingredient (API) Market Size, By Types of Synthesis, 2022-30 (US$ Billion)
By Type of Synthesis | 2022 | 2023 | 2024 | 2025 | 2029 | 2030 |
Biotech | 57.56 | 60.70 | 64.06 | 67.75 | 86.60 | 92.98 |
Monoclonal Antibodies | 21.15 | 22.36 | 23.66 | 25.09 | 32.40 | 34.88 |
Recombinant Proteins | 25.36 | 26.72 | 28.18 | 29.78 | 37.95 | 40.73 |
Vaccines | 11.05 | 11.61 | 12.21 | 12.87 | 16.22 | 17.34 |
Synthetic | 146.48 | 154.02 | 162.08 | 170.93 | 215.98 | 231.18 |
Captive API market dominated the overall market in 2020 in terms of revenue share of 57.44%, owing to higher availability of raw materials and intensive capitalization of major key players in development of high-end manufacturing facilities. Merchant API market is expected to be the fastest growing segment and is expected to grow at a lucrative CAGR of 6.1% during the forecast period. Merchant, i.e., outsourcing market is driven by factors such as rising demand for biopharmaceuticals and high cost of in-house manufacturing of these molecules. The share of merchant API market is expected to increase from 42.56% in 2020 to 43.17% by 2030.
Active Pharmaceutical Ingredient (API) Market Size, By Types of Manufacturers 2022-30 (US$ Billion)
By Type of Manufacturer | 2022 | 2023 | 2024 | 2025 | 2028 | 2029 | 2030 |
Captive APIs | 116.95 | 122.94 | 129.34 | 136.37 | 161.82 | 172.15 | 184.23 |
Merchant APIs | 87.09 | 91.78 | 96.80 | 102.31 | 122.30 | 130.43 | 139.93 |
Innovative API dominated the market in 2022, but the growth is expected to slow down in the coming decade owing to patent expirations and decrease in revenue. However, generic API will overtake the branded market owing to exponential growth of generic industry in regions such as India and China. Regional government support is another factor improving the growth rate of generic APIs.
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Active Pharmaceutical Ingredient (API) Market Size, By Types, 2022-30 (US$ Billion
By Type | 2022 | 2023 | 2024 | 2025 | 2028 | 2029 | 2030 |
Generic APIs | 70.60 | 74.50 | 78.69 | 83.28 | 99.95 | 106.74 | 114.66 |
Innovative APIs | 133.44 | 140.22 | 147.45 | 155.40 | 184.17 | 195.84 | 209.50 |
In 2022, North America was the largest market for APIs due to established branded drug industry in the U.S. Moreover, growing R&D initiatives aid in availing capital for new molecule development. Asia Pacific is expected to be the fastest growing market over the forecast period. Availability of affordable labor and presence of major companies in the industry that are setting up API manufacturing plants in developing counties such as China & India. Government support for setting up new facilities in countries such as the U.S. and India is a driver for manufacturers to expand their businesses.
Regional Snapshot
North America is expected to retain the largest share in the active pharmaceutical ingredient (API) market over the forecast term. This is imputable to the growth in occurrences of chronic diseases and the emerging need for speciality drugs in the area. Furthermore, the growing significance of generics and Investments in feasible proof by pharmaceutical firms is also projected to aid the development of the active pharmaceutical ingredient (API) market soon.
Active Pharmaceutical Ingredient (API) Market Share, By Region, 2021-30 (%)
By Country | 2021 | 2022 | 2025 | 2028 | 2029 | 2030 |
North America | 38.21 % | 38.26 % | 38.40 % | 38.55 % | 38.59 % | 38.64 % |
Europe | 28.35 % | 28.30 % | 28.14 % | 27.99 % | 27.93 % | 27.88 % |
Asia Pacific | 22.28 % | 22.35 % | 22.56 % | 22.77 % | 22.84 % | 22.91 % |
LAMEA | 11.15 % | 11.09 % | 10.89 % | 10.70 % | 10.63 % | 10.57 % |
Europe has anticipated expanding significantly in the global active pharmaceutical ingredient (API) market and will probably carry on the same fashion over the forecast period. This is attributable to the increase in investment in research and development activities and the regional market in the region. Moreover, the rise in biopharmaceutical firms is also projected to help the regional advancement of the market.
- The U.S. active pharmaceutical ingredients market was accounted for USD 34.90 billion in 2022 and will reach at a CAGR of 6.8% from 2023 to 2030.
- The Canada active pharmaceutical ingredients market was accounted for USD 26.72 billion in 2022 and will reach at a CAGR of 5.9% from 2023 to 2030.
- The Mexico active pharmaceutical ingredients market was accounted for USD 16.45 billion in 2022 and will reach at a CAGR of 4.9% from 2023 to 2030.
Report Highlights
The COVID-19 outbreak had a positive crash on the worldwide APIs market. The drug-induced industry was an epicentre in therapy symptoms linked to COVID-19, including cough, high fever, and cold. Due to the rising popularity of the drug industry during the pandemic, the active pharmaceutical ingredients market has also seen growth over time. However, the coronavirus outbreak has caused global business and economic disturbance.
APIs are utilized as Antibody Drug Conjugates (ADCs). They are significant and efficient care modalities combined with organically drugs and antibodies for cancer treatment. APIs aim for cancer cells when they generate the least disclosure of drugs. Hence, the progress of cancer-specific APIs is predicted to increase the API market growth.
The critical element scaling up the expansion of the active pharmaceutical ingredients market is the emerging drug exploration and progress activities for drug making, the rising significance of generics, and the growing intake of biopharmaceuticals. Even so, the adverse drug cost command approach throughout numerous nations and high making prices are projected to hamper the market's advancement.
Furthermore, introducing new drugs, cooperation, and geographical expansions are some of the firms' strategic initiatives to hold constancy in the market. This is probably to fuel market expansion in the forthcoming. The active pharmaceutical ingredients (API) market has typically been labelled by drugs, like cardiovascular, anti-infectives and diabetes, pain management drugs, and analgesics.
Thereby, per the research and development trends, the need is shifting toward expanding complicated APIs used in new formulations, aiming for niche therapeutic aspects.
The significant elements confining the market growth include:
- Drug price control policies throughout various countries.
- Vicious contests amongst existent players.
- Stringent regulative guidelines.
Market Dynamics
Market Drivers
The increasing consent in Abbreviated New Drug Applications (ANDA) raises the need for active pharmaceutical ingredients (API). A company must file an Abbreviated New Drug Application (ANDA) to market a generic drug. An ANDA authorization means that the generic drugs is reasonably comparable to the original prescription regarding the quality, route of administration, dosage form, strength, performance characteristics, and intended use. Therefore, these acceptances favour quicker approval of APIs.
The rise in the prevalence of chronic disorders boosts the market. Besides cancer, many other diseases have exhibited increasing occurrence rates. Therefore, these increasing chronic disease cases augment the market's requirement and expansion.
Market Restraints
Numerous firms can only produce a drug if the patent of a drug is terminated, and late approvals from the companies hamper the market growth.
The demand for high capital for the manufacturing of APIs as the process requires highly systematic protocols resulting in the outsourcing of various APIs. Low and middle economic countries need help to afford it. Thereby, the need for low-cost substitutes is more in satisfactory-income countries in Asia Pacific, Africa, and Latin America. The unavailability of appropriate care affects market growth.
Market Opportunities
Some drugs addressed to an API may be a bulk-finished commodities. Moreover, active pharmaceutical ingredients have pulled significant consideration from regulative bodies on a global scale as it provides safety care. Higher approval of synthetic API is escalating the market growth.
Highly potent active pharmaceutical ingredients specify a massive transfer as pharmaceutical firms use small molecules to render new medicines. Its advantages include the demand for a lower therapeutic dose, the ability to bind to particular receptors, and high efficiency can be recognized as a growing need amongst producers and consumers. Numerous API manufacturers have approved highly potent active pharmaceutical ingredients to distinguish themselves from the competition as the generic API industry gradually competes, boosting the market growth.
Market Challenges
The expensive expenditure in their manufacturing cells encompasses:
- Renovation of production accommodations.
- Compilation of a portfolio of commodity security and efficiency tests.
- Familiarizing staff with skill norms.
Furthermore, acquiring regulatory clearances is more expensive for small businesses. The high manufacturing costs are a substantial dispute for the growing active pharmaceutical ingredients market in the forthcoming years.
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Recent Developments
- In 2021, Reddy's Laboratories Ltd advertised the opening of Reddy-Lenalidomide, a generic which is an alternative to Revlimid capsules, authorized by Health Canada for the therapy of transfusion-dependent anaemia.
- In 2021, Teva Pharmaceutical and MEDinCell were sanctioned by the United States Food and Drug Administration (FDA) for a Novel Drug Request for TV-46000/mdc-IRM. The medication is being utilized to cure schizophrenia.
- In 2021, Novasep devoted roughly EUR 6 million to its Chasse-sur-Rhône, France site to improve its potential in spaces like central nervous system (CNS), oncology, and infectious diseases.
- In 2020, Pfizer signed a deal with Gilead Sciences to produce and provide Gilead's virus scan drug termed Remdesivir for the care of COVID-19 long term.
Related Reports
- High Potency Active Pharmaceutical Ingredients Market - The market size was valued at USD 24.28 billion in 2022 and expanding around USD 55.66 billion by 2032 with a CAGR of 8.7% from 2023 to 2032.
- Small Molecule API Market - The market size was estimated at USD 176 billion in 2022 and is expanding around USD 299.2 billion by 2032 with a CAGR of 5.5% from 2023 to 2032.
- Healthcare API Market - The market size was valued at USD 218.41 million in 2022 and is expanding around USD 309.86 million by 2032 with a CAGR of 3.56% from 2023 to 2032.
- Plant-based API Market - The market size was valued at USD 30.12 billion in 2022 and it is expanding around USD 56.12 billion by 2032 with a CAGR of 6.42% from 2023 to 2032.
- API Management Market - The global API management market size was valued at USD 5.07 billion in 2022 and is expanding around USD 94.27 billion by 2032 with a CAGR of 34% from 2023 to 2032.
- Telecom API Market - The market size was valued at USD 206.14 billion in 2021 and is expanding around USD 1.2 trillion by 2030 with a CAGR of 21.62% from 2022 to 2030.
Key Market Players
- Albemarle Corporation
- AurobindoPharma
- Reddy's Laboratories Ltd
- AbbVieInc
- Teva Pharmaceutical Industries Ltd
- Mylan N.V.
- CiplaInc
- BoehringerIngelheim International GmbH
- Merck & Co., Inc
- Sun Pharmaceutical Industries Ltd
- Bristol-Myers Squibb Company
- Novartis AG
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 Geography
- North America
- Europe
- Asia-Pacific
- Latin America
- Middle East & Africa (MEA)
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