Global Active Pharmaceutical Ingredient Market 2022-2028

Global Active Pharmaceutical Ingredient Market 2022-2028

Active pharmaceutical ingredients (APIs) are any substance or combination of substances that are used in a finished pharmaceutical product (FPP) and are intended to provide pharmacological activity. In other words, the API is the central ingredient of a drug. Some drugs can have multiple APIs in order to treat various symptoms. The efficacy and safety of medications are significantly dependent on the quality of APIs, indicating that poor quality API may result in serious issues such as illnesses and even mortality. API directly impacts both the quality and the cost of pharmaceutical goods. Pharmaceutical manufacturing occurs in two general steps. First, firms convert raw materials into APIs. Then, firms create final formulations by mixing APIs and excipients (other non-active ingredients), pressing the mixture into tablets, or filling capsules or preparing solutions, and then packaging the product for the consumer market.

Global API market is estimated to witness a significant growth rate of 6.9% over the period 2021-2028. Major factors driving the market growth are increasing chronic and acute diseases globally, growing focus on precision medicine, and surging biopharmaceutical industries across the globe.

According to the WHO, around 17.9 million fatalities occurred globally due to cardiovascular diseases (CVDs) in 2016, representing around 31% of global fatalities. Amongst these fatalities, around 7.4 million were due to coronary heart diseases (CHD) and nearly 6.7 million were due to stroke. By 2030, it has been projected that CVDs would be responsible for nearly 23.6 million mortalities across the globe. These facts and figures reflect the demand for various pharmaceuticals drugs, which in turn, augments the demand for APIs. However, stringent regulations regarding quality standards of API and fluctuating trade regulations between the countries are likely to hamper the market growth. Several regulatory authorities such as the US Food and Drug Administration (FDA) and European Medicine Agency (EPA) are involved to ensure that firms manufacture APIs and final formulations keeping quality as the primary concern. The geographic location of the manufacturer and market as well as the financing source, determines which regulatory agencies are involved in the compliance of API quality. APIs that are intended for final formulations in sub-Saharan Africa are often comply to lesser number of regulations due to weaker national regulatory agencies and cost-sensitive markets. Besides, increasing R&D investments by contract manufacturers, and government initiatives for the expansion of the pharmaceutical industry in emerging economies is promising ample growth opportunities for the market.

Global API market is segmented on the basis of type, type of synthesis, manufacturer type, therapeutics, and region. On the basis of type, the market is divided into a generic API and branded API. On the basis of the type of synthesis, the market is classified into biotech API, synthetic API, and others. Synthetic API segment held the dominant position in the global API market. On the basis of manufacturer type, the market is divided into in-house and contract.

Geographically, the market has been segmented into North America, Europe, Asia-Pacific, and Rest of the World (RoW). North America imports the majority of API from Asian and Sub-Saharan African countries and thus, is estimated to dominate the global API market. Moreover, the region is further estimated to continue as a dominant region over the forecast period. Major factors backing the growth of North American API market is the presence of major pharmaceutical firms such as Abbott Laboratories, AbbVie Inc., Dr. Reddy's Laboratories Ltd., and so on. These firms manufacture various drugs to cater to a wide range of customers across the globe, which augments the demand for API in the region. Moreover, the prevalence of diseases such as cancer, CVDs, and neurology disorders across the region is driving the demand for drugs, which further augments the growth of the API market in the region.