Global Active Pharmaceutical Ingredients (API) Market: Overview

Need for novel therapeutics in oncology has propelled research of discovering new active pharmaceutical ingredients (API). Growing research for new drug components for chronic diseases is increasingly stimulating the demand for active pharmaceutical ingredients among drug makers. Favorable regulatory ecosystem in various countries has been behind the growing body of clinical studies and research. The API market has been witnessing significant strides from the growing role of API in combination therapies for management of cancer and orthopedic diseases. Efforts to leverage artificial intelligence tools in drug making have expanded the potential of the API market. Furthermore, intensified efforts of the global healthcare system to develop precision medicine for chronic disease management has been broadening the avenue in API market. Focus of numerous drug makers on consolidating in-house API manufacturing is a key trend likely to change the face of the worldwide industry efforts in developing active pharmaceutical ingredients. Further, growing numbers of Abbreviated New Drug Application (ANDA) submissions is also catalyzing the prospects of the API market. 

The global active pharmaceutical ingredients (API) market stood at US$162,000.0 million in 2017 and is projected to clock a CAGR of 5.4% from 2018 to 2026. The opportunities are expected to reach worth of US$ 257,455.6 by 2026-end.

The report segments the API market on the basis of the type of API, type of drug, therapeutic, and region.

global  active  pharmaceutical  ingredients  (api)market

Continuous Advances in Biotechnology Underpin Sizable Potential in Biotech/Biological API

The key manufacturer types comprise in-house API manufacturing and API contract manufacturing. Of the two, the former holds the sway by accounting for the major share in 2017. However, the other segment will rise in prominence and is expected to expand at a rapid growth rate during 2018–2026. The revenues from API contract manufacturing are expected to gain substantially by 2026-end.

Key types of API covered in the market assessment are biotech/biological API, synthetic chemical API, plant extracts API, classical fermentation, and high-potency API. Of these, API based on biotech/biological are expected to grow at a prominent CAGR during 2018–2026. Remarkable advances made in biotechnology, coupled with drug makers harnessing new genetic engineering techniques, are driving the segment to tread on a path of high growth trajectory over the assessment period.

Research in API Expand Prospects of Anti-cancer Therapeutics

The key therapeutics for which API are used comprise drugs for metabolic disorders, cardiovascular diseases, oncology, anti-infective diseases, central nervous system diseases, and respiratory diseases. Of these, the oncology segment will see an exemplary growth spurred by the demand for new therapies and novel drugs for slowing the prevalence of cancer in various populations worldwide.

Asia Pacific to Gain Shares

The various regional markets for API are North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa. Of these, North America has emerged as the leading one. Several factors account for the colossal opportunities in the region. Rapidly aging populations have spurred research on novel therapies for chronic diseases. Further, strides made in oncology has fueled the numbers of ANDA to the U.S. FDA. In the coming years, the region will witness surge in research investments to assess pharmaceutical ingredients for various cancer types, with a focus on reducing the morbidity and prevalence of cancer.

On the other hand, Asia Pacific rapidly emerging as a lucrative region in the global API market. It is expected to witness a big impetus on the back of growing spending on testing new drugs. A major revenue share comes from Japan, while China will be cynosure of attention for key market players.

Active Pharmaceutical Ingredients (API) Market - Overview

Biotech/biological APIs have witnessed constant technological evolution, owing to a shift from synthetic chemical APIs to biotech/biological APIs in the global active pharmaceutical ingredients market.

Rise in demand for new drugs at a low cost and entry of domestic and global companies in the APIs market have led to innovative product offerings with new and advanced techniques. Any substance or combination of substances used in a finished pharmaceutical product (FPP) is known as active pharmaceutical ingredients (API). A finished dose of any drug is a combination of active pharmaceutical ingredients and excipients. An excipient is an inactive substance in a drug dose.

High-potency active pharmaceutical ingredients (HPAPIs) and antibody-drug conjugates are recent innovations in the market and require a special manufacturing set up. Most of these drugs are used in oncology. A large number of patents for small molecule APIs are expected to expire in the next few years, with many drugs losing patent protection in 2018. This is estimates to unlock a significant market opportunity for generic drug manufacturers, resulting in augmented demand for APIs. Large pharmaceutical companies are scaling down their small molecule manufacturing facilities to focus on biologic drugs, thereby presenting greater opportunities for contract manufacturing companies, particularly in Asia.

A key trend of collaborations and acquisitions of related companies to increase geographic presence has been observed in the last few years. For instance, in July 2017, Sun Pharmaceutical Industries Ltd. entered into a long-term manufacturing agreement with Samsung BioLogics for the manufacture of Ilumya.

The global active pharmaceutical ingredients market has been broadly segmented based on manufacturer, APIs, drug, therapeutic, and region. In terms of manufacturer, the global market has been classified into in-house API manufacturing and API contract manufacturing. The in-house API manufacturing segment accounted for a key share of the global market, in terms of revenue, in 2017. The API contract manufacturing segment is estimated to expand at a significant growth rate during the forecast period. Consequently, the segment is estimated to gain significant market share by the end of 2026.

In terms of region, the global active pharmaceutical ingredients market has been segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. North America dominated the global market and is projected to lose market share by the end of 2026. The market in North America is primarily driven by a rapid increase in the geriatric population, high adoption of new drugs, and rise in group dental practices in the U.S.. The market in Asia Pacific is projected to expand at a rapid pace during the forecast period. In Asia Pacific, Japan dominated the active pharmaceutical ingredients market, while the market in China is estimated to expand at a prominent CAGR during the forecast period. The report also profiles major players in the market based on various attributes such as company overview, financial overview, SWOT analysis, key business strategies, product portfolio, and recent developments. Major players operating in global active pharmaceutical ingredients market include Teva Pharmaceutical Industries Ltd., Sun Pharmaceutical Industries Ltd., Aurobindo Pharma, Pfizer Inc., Boehringer Ingelheim International GmbH., Merck & Co., Inc., Novartis AG, F. Hoffmann-La Roche Ltd, and Bayer AG.

The global active pharmaceutical ingredients market has been segmented as given below:

Manufacturer

  • In-house API Manufacturing
  • API Contract Manufacturing

APIs

  • Synthetic Chemical API
  • Biotech/Biological API
  • Plant Extracts API
  • High-potency API
  • Classical Fermentation API

Drug

  • Branded or Innovative Prescription Drugs
  • Generic Prescription Drugs
  • over-the-counter (OTC) Drugs
  • Others

Therapeutic

  • Anti-infective Drugs
  • Metabolic Disorders Drugs
  • Cardiovascular Drugs
  • Oncology Drugs
  • Central Nervous System Drugs
  • Respiratory Diseases Drugs
  • Others 

Region

  • North America
    • U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Italy
    • Spain
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia & New Zealand
    • Rest of Asia Pacific
  • Latin America
    • Brazil
    • Mexico
    • Rest of Latin America
  • Middle East & Africa
    • GCC
    • South Africa
    • Israel
    • Rest of Middle East & Africa

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