Number of pages: 100 | Report Format: PDF | Published date: April 01, 2021
Historical Years – 2021 | Base Year – 2022 | Forecasted Years – 2023-2031
According to the deep-dive market assessment study by Growth Plus Reports, the active pharmaceutical ingredients (API) market was valued at US$ 185.31 billion in 2022 and is expected to register a revenue CAGR of 6.4% to reach US$ 323.88 billion by 2031.
Active Pharmaceutical Ingredients (API) Market Fundamentals
Pharmaceutical API, or the active substance in a medication that is responsible for its therapeutic effect, is known as the active pharmaceutical ingredient. It is the component of the drug that confers its intended therapeutic effect and makes it medically active. Both generic and branded medications make use of APIs. However, because they are the main component that makes the generic drug equivalent to the brand-name product, they are typically more important in producing generic drugs. During the R&D and commercial production phases, they are produced using highly technological industrial processes. The API market is progressively a worldwide business coordinated in the production network of drugs, in which APIs comprise the main parts regarding clinical viability and worth.
Active Pharmaceutical Ingredients (API) Market Dynamics
The increasing prevalence of chronic diseases such as cancer, diabetes, and cardiovascular diseases is one of the major drivers of growth in the global active pharmaceutical ingredients (API) market. The primary components of pharmaceutical drugs used to treat these diseases are APIs. The International Diabetes Federation estimates that 537 million adults aged 20 to 79 have diabetes. By 2030, that number is expected to rise to 643 million; by 2045, it is expected to reach 783 million. In addition, it is anticipated that the annual number of new cases of cancer will reach 23.6 million by 2030. Numerous other diseases, in addition to cancer, have shown an increase in prevalence rates. The rising incidence of diabetes, heart disease, and cancer, the flood in stationary ways of life, and the expansion in the geriatric populace are the critical drivers of the worldwide market. The need to cut healthcare costs, the availability of low-cost generic drugs, and the growing emphasis on cost-effective healthcare solutions all contribute to the rising demand for generic drugs. As indicated by the FDA report, 9 out of 10 solutions filled are for generic medications in the U.S. The growth of the global active pharmaceutical ingredients market is fueled by APIs being the primary components of generic drugs. The global active pharmaceutical ingredients (API) market is expanding due to the growing emphasis placed on R&D efforts aimed at creating novel APIs. The trend is being driven by the need to cater to the growing demand for specialized APIs and the need to address the unmet medical needs of patients. The favorable government policies aimed at promoting the growth of the pharmaceutical industry and improving access to healthcare services are driving the growth of the API market. Governments are providing incentives for pharmaceutical companies to invest in R&D activities and are promoting the production of APIs to reduce dependence on imports. The technological advancements in the production of APIs, such as the use of biotechnology and nanotechnology, are driving the growth of the API market. These advancements are enabling the production of more effective, safe, and cost-efficient APIs, driving the market's development.
However, the high capital speculation and creation costs and severe guidelines for the well-being and treatment of APIs are probably going to control the market income development partially.
Active Pharmaceutical Ingredients (API) Market Ecosystem
The global active pharmaceutical ingredients market is analyzed from the following perspectives: type, type of manufacturer, application, and region.
Active Pharmaceutical Ingredients (API) Market by Type
Based on the types, the active pharmaceutical ingredients (API) market is segmented into generic and branded.
The branded API segment accounts for the largest global active pharmaceutical ingredient market revenue share. Diverse players are motivated to introduce novel drugs to the market because of extensive R&D programs aimed at the creation of a variety of innovative, cost-effective products. The development in the remedial use of novel age of fixings, which incorporates high-strength fixings and peptides, is expected to assume a pivotal part in the speed increase in the production of branded API. Another significant factor that is anticipated to increase the demand for branded APIs over the forecast period is the rapid expansion of pharmaceutical and biotech companies worldwide.
Active Pharmaceutical Ingredients (API) Market by Type of Manufacturer
Based on the type of manufacturer, the active pharmaceutical ingredients (API) market is segmented into merchant (contract) manufacturers and captive (in-house) manufacturers.
The captive manufacturers API segment accounted for the largest revenue share of 52% in 2022. Due to the easy availability of raw materials and significant investments made by major players in developing high-end manufacturing facilities, it is anticipated to expand significantly in the coming years. Besides, late turns of events and drives by central participants recommend that they are exceptionally centered around in-house fabricating over re-appropriating. For example, in November 2019, Novartis declared the procurement of CellforCure-a France-based CDMO-for delivering particles in-house, which was prior contracted to CellforCure. It is anticipated that the expansion of the segment will be aided by these initiatives by key players. To supply APIs to other drugmakers, major businesses are looking to capitalize on their production capabilities in Asian nations. In addition to major players, the Indian government intends to encourage domestic API manufacturing. For instance, the Indian government will boost domestic production and exports by announcing a 9.4 billion package for the bulk drug industry in March 2020.
Active Pharmaceutical Ingredients (API) Market by Application
Based on the application, the active pharmaceutical ingredients (AP) market is segmented into cardiovascular disease, infectious diseases, oncology, neurological diseases, diabetes, respiratory diseases, and others (pain management, orthopedics, urinary tract disorders, ophthalmology, gastroenterology, etc.).
The cardiovascular diseases segment accounted for the largest global active pharmaceutical ingredients (API) market revenue share. This is because the prevalence of target diseases is rising worldwide. Different associations like the World Heart League, the World Stroke Association, and the Stroke Affiliation are pursuing expanding mindfulness about cardiovascular sicknesses. During the forecast period, the segment is anticipated to be driven by a high prevalence and rising awareness of cardiovascular diseases, thereby driving demand for cardiology drug APIs.
Active Pharmaceutical Ingredients (API) Market by Region
Geographically, the global Active Pharmaceutical Ingredients market has been segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.
North America accounts for the largest global active pharmaceutical ingredients (API) market revenue share. This is because of the aging population and increasing chronic diseases. Most of the North American market is owned by the United States. The country's demand for drugs and ingredients grew because of the rapid spread of COVID-19, necessitating the export of numerous APIs from other nations and local production to meet the demand. Most of its API’s necessities are met through imports from the Asian business sectors. According to US trade statistics, China, and India account for between 75 and 80 percent of all API imports to the US. This is due to the large talent pool serving the pharmaceutical industry and its well-established manufacturing facilities. It is anticipated that the US government's recent political and trade policies to raise import duties and taxes will raise operational costs and put manufacturers under more price pressure. To guarantee the supply of high-quality goods to the US market, the FDA has also increased the frequency of periodic inspections of various offshore contract manufacturing facilities and raised the application fees for new drug approval.
Asia Pacific region is projected to record a high revenue CAGR in the global active pharmaceutical ingredients (API) market. Pharmaceutical drugs and APIs are in high demand because of the region's large population. The factors include an increase in investment in R&D activities, a rise in the cost of healthcare, rising demand for generic drugs, and an increase in chronic disease prevalence. The Asia-Pacific region is seeing a rise in the demand for generic drugs as a result of rising healthcare costs, the need to cut healthcare costs, and the availability of cheap generic drugs. Since APIs are essential components of generic drugs, the trend is anticipated to fuel the region's API market growth. The market is supposed to be driven by nations like China, India, Japan, and South Korea, which have deep-rooted drug businesses and are significant makers and exporters of APIs.
Active Pharmaceutical Ingredients (API) Market Competitive Landscape
The prominent players operating in the global active pharmaceutical ingredients market are:
Active Pharmaceutical Ingredients Market Strategic Developments
An active pharmaceutical ingredient (API) is the part of a medication that produces the desired therapeutic effect. It is the chemical compound or substance responsible for the drug's biological activity. The API is usually combined with other inactive ingredients or excipients to form a complete drug product.
During the forecast period, the global active pharmaceutical ingredients market is expected to grow at a revenue CAGR of 6.4%.
Sun Pharmaceutical Industries Ltd., Merck KGaA, GlaxoSmithKline plc, Cipla Inc., and Pfizer Inc. are the major players in the active pharmaceutical ingredients treatment market.
The Asia Pacific region is projected to grow at a high revenue CAGR in the global active pharmaceutical ingredients market.
The API market is highly competitive, with many manufacturers vying for market share. This competition can lead to downward pressure on prices, making it difficult for companies to maintain profitability.
*Insights on financial performance are subject to the availability of information in the public domain