Active Pharmaceutical Ingredients (APIs) Market - Global Outlook & Forecast 2023-2028

Active Pharmaceutical Ingredients (APIs) Market - Global Outlook & Forecast 2023-2028

The global active pharmaceutical ingredients (API) market is expected to grow at a CAGR of 6.67% from 2022 to 2028.

MARKET TRENDS & DRIVERS

Reshaping the Pharmaceutical API Industry with Digital Transformation

Digital Transformation has allowed the active pharmaceutical ingredients (API) market to reshape itself to optimize production, streamline processes and reduce costs. By embracing the digital revolution, API manufacturers and suppliers can leverage advances in automated workflows, AI-enabled production management, and increased predictive analytics capabilities for data-driven decision-making. Additionally, the cloud-based infrastructure allows API-focused stakeholders to store, manage and use their data. At the same time, the increasing affordability of automation and other digital technologies helps to create a more efficient and cost-effective API supply chain more easily. Together, these advancements have enabled the pharmaceutical API industry to become more agile, responsive, and cost-efficient – unlocking new possibilities for product innovation and providing customers with a better overall experience.

Rising Demand for Novel APIs

The rising demand for novel APIs is due to the increasing need for newer, more specialized drugs to treat complex diseases, illnesses, and medical conditions. Novel APIs are developed using advanced biotechnologies and advanced synthesis techniques to create more effective drugs that provide better treatment than existing drugs. The growing demand for novel APIs is that they present several advantages over existing drugs, including improved safety, efficacy, and cost-effectiveness. Moreover, they can be used to treat rare diseases that current drugs cannot treat and to produce new therapies for existing diseases.

Technological Advancements API Manufacturing

The technological advancements in manufacturing in the active pharmaceutical ingredients (API) market have helped improve API quality, increase production efficiency, reduce costs, and ensure environmental protection. New technologies for API manufacturing include continuous processing and computerization of operations, which enable large-scale, cost-effective, and efficient production. Automated machines, computer-controlled process description (CPD) systems, and digital manufacturing systems are now being used to increase the accuracy of API formulation, improve overall efficiency, and reduce manual labor requirements. In addition, new technological advancements such as micronization techniques, nanotechnology, and crystallization techniques greatly improve API quality while increasing overall production speeds. Finally, new waste management methods, such as liquid waste treatments, have also significantly improved API manufacturing processes, as well as standards of environmental protection.

Growing Importance & Demand for Generic Drugs

Over recent years, the growing importance and demand for generic drugs have increased tremendously. This is mainly due to the cost savings they offer, as generic drugs typically cost 30-80% less than other brand-name drugs. Moreover, generic drugs are often the only option for patients who cannot afford expensive brand-name drugs. As such, generic drugs have become increasingly popular among consumers seeking affordable healthcare solutions. Additionally, generic drugs have become more widely available due to government programs like Medicaid and Medicare. These government-sponsored programs help to make generic drugs more accessible to those who need them. Furthermore, the increased demand for generic drugs has led to yet another significant development in the pharmaceutical industry: the formation of API manufacturers. These companies specialize in the production of APIs that are designed explicitly for generic medications. Creating APIs specifically tailored to generics can provide a cost-effective alternative to more expensive original drugs. As a result, manufacturers in the active pharmaceutical ingredients (API) market have become an essential component of the generic drug supply chain.

SEGMENTATION INSIGHTS

INSIGHTS BY MOLECULE TYPE

The global active pharmaceutical ingredients (API) market by molecule type is classified as large and small. This differentiation not only considers the size of the molecule but also how the molecules are made, their behavior, drug delivery, and mode of delivery. A small molecule API refers to an organic compound with a size of about 1 nm, which assists in regulating biological processes. Small molecules may be orally delivered, and the body is most likely to consume them. They possess the characteristics of rapid infusibility due to their small size, which enables them to reach the intercellular site of action. Small molecules have long been the basis for drug development. They are easily digested or absorbed into the bloodstream.

Segmentation by Molecule Type

• Small Molecule/ Chemical API
• Large Molecule/ Biological API

INSIGHTS BY THERAPY AREA

The cardiovascular therapy area dominated the global active pharmaceutical ingredients (API) market, accounting for a share of over 19% in 2022. Cardiovascular APIs are manufactured by companies involved in drug manufacturing for cardiovascular diseases. Manufacturers producing hypertensive drugs for people with high blood pressure drive the market's growth. Cardiovascular disease is a major cause of death and disability worldwide and is a major medical research and development focus. Pharmaceutical interventions are an important part of treatment for cardiovascular conditions, particularly when managing risk factors such as high blood pressure, high cholesterol, and diabetes. APIs are used to create medicines targeting specific aspects of the condition to achieve effective cardiovascular therapy.

Segmentation by Therapy Area

• Cardiovascular
• Oncology
• Neurology
• Anti-infectives
• Endocrinology
• Pulmonology
• Others

INSIGHTS BY MANUFACTURERS TYPE

Based on the type of manufacturing process that an API-producing company opts for, the active pharmaceutical ingredients (API) market is segmented into captive and merchant markets. The captive market includes APIs produced by manufacturers in-house for their own needs, while the merchant market for APIs includes APIs manufactured by third parties. There are a lot of benefits and shortcomings of producing APIs in-house. COVID-19 has fueled the need for producing APIs in-house rather than outsourcing due to disruptions in the supply chain in China.

Segmentation by Manufacturers Type

• Captive
• Merchant

INSIGHTS BY BRAND

The patented/ innovative APIs segment accounted for a higher global active pharmaceutical ingredients (API) market in 2022. The use of patented or innovative active pharmaceutical ingredients (API) has become increasingly important in the pharmaceutical industry in recent years. Patented API can give a pharmaceutical company a competitive advantage through its exclusive access to the API, enabling it to sell products at higher margins and have a greater market share. API innovation is a necessary component of the pharmaceutical industry since it advances the development of new and improved pharmaceutical products that can benefit patients

Segmentation by Brand

• Patented/ Innovative API
• Generic API

INSIGHTS BY POTENCY

Active pharmaceutical ingredients (APIs) are essential components in producing pharmaceutical products. They are the active components in medicines that are responsible for the desired therapeutic effect. In recent years, the potency of APIs has become increasingly important for producing safe and effective medicines. Non-potent active pharmaceutical ingredients (NAPIs) are substances used as active ingredients in pharmaceuticals but do not possess the same potency as their potent counterparts (APIs). NAPIs are typically combined with APIs to enhance the drugs' therapeutic effect or reduce their toxicity. Low-potency NAPIs are generally considered safe for human consumption and are used to provide minor therapeutic benefits. The global non-potent active pharmaceutical ingredients (API) market is expected to grow at a CAGR of over 6% during the forecast period.

Segmentation by Potency

• Non-potent API
• Highly Potent API

GEOGRAPHICAL ANALYSIS

North America is one of the largest global active pharmaceutical ingredients (API) markets, accounting for over 41% share in 2022. The region has seen a steady growth in the demand for APIs, driven primarily by the increasing prevalence of chronic diseases, the rising demand for generic drugs, and the rapid development of the pharmaceutical industry. The increasing number of chronic diseases in North America has been a major factor driving the demand for APIs. According to the Centers for Disease Control and Prevention (CDC), around half of the adults in the U.S. suffer from at least one chronic disease. This has led to an increase in the use of prescription drugs, which in turn has led to an increase in the demand for APIs.

Segmentation by Geography

• North America
• The U.S.
• Canada
• APAC
• China
• India
• Japan
• South Korea
• Australia
• Indonesia
• Singapore
• Europe
• Germany
• The U.K.
• Russia
• France
• Spain
• Italy
• Latin America
• Brazil
• Mexico
• Argentina
• Middle East & Africa
• Turkey
• Saudi Arabia
• UAE
• South Africa

COMPETITIVE LANDSCAPE

The active pharmaceutical ingredients (API) market is concentrated, competitive, and characterized by numerous global and domestic vendors across geographies. AbbVie, Boehringer Ingelheim, Bristol-Myers Squibb Company, Cipla, Eli Lilly and Company, GSK, Merck KGaA, Novartis, Pfizer, Sanofi, Sun Pharmaceuticals, and Viatris are the prominent vendors in the global active pharmaceutical ingredients (API) market. These companies are always at the forefront of delivering high-quality APIs for domestic and international pharmaceutical manufacturers. They also invest in considerable R&D activities to offer a competitive product line.

Key Company Profiles

• AbbVie
• Boehringer Ingelheim
• Bristol-Myers Squibb Company
• Cipla
• Eli Lilly and Company
• GSK
• Merck KGaA
• Novartis
• Pfizer
• Sanofi
• Sun Pharmaceutical Industries
• Viatris

Other Prominent Vendors

• Abbott
• Albemarle Corporation
• Amgen
• Aurobindo Pharma
• BASF Corporation
• Biocon
• Dr. Reddy’s Laboratories Ltd.
• Teva Pharmaceuticals Industries
• F. Hoffmann-La Roche
• GLENMARK PHARMACEUTICALS LTD.
• Lupin
• Shenzhen Hepalink Pharmaceutical Group

KEY QUESTIONS ANSWERED:

1. How big is the active pharmaceutical ingredients (API) market?

2. What is the growth rate of the global active pharmaceutical ingredients (API) market?

3. What are the growing trends in the active pharmaceutical ingredients (API) market?

4. Which region holds the most significant global active pharmaceutical ingredients (API) market share?

5. Who are the key players in the global active pharmaceutical ingredients (API) market?