Be it the prevalence of chronic diseases, increasing population of geriatrics, or governmental push to provide adequate care to their citizens – the healthcare industry is on the rise and with that, the pharmaceutical industry is gaining traction. For the manufacturers of drugs, active pharmaceutical ingredients (APIs) are of great essence as their quality defines the effectiveness of the products. However, not all pharmaceutical companies possess in-house API manufacturing capabilities and it is not feasible for a single company to produce all the APIs required for their formulation offerings. This makes for an opportune situation wherein the bulk manufacturers and suppliers of these ingredients stand to gain from. According to this business intelligence study, the demand in the global active pharmaceutical ingredients market will multiply at a CAGR of 6.4% during the forecast period of 2017 to 2023. In terms of revenue, the active pharmaceutical ingredients market is estimated to attain a valuation of US$219,601.9 by the end of 2023, mounting from the market’s evaluated worth of US$151,591.7 as of 2017.

Apart from increased healthcare expenditure by the urban populations across the world and rapid increment people aged over 60 years, the global API market stands to gain addition traction from the increase in drug master file (DMF) filing from Indian companies. On the other hand, adverse regulatory policies are foreseen as a restraint that will curtail the progress of the API market. That being said, patent expiry of lucrative biological drugs is expected to open new opportunities in this market over the course of the aforementioned forecast period.

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Generic API Market Anticipated to Grow Quickly in Near Future

Based on drug type, the active pharmaceutical ingredients market has been segmented into branded, generic, and over the counter (OTC). Among these, branded prescription drugs are the most profitable segment, promising to generate a revenue of US$164,481.9 million by the end of 2023. On the other hand, the generic prescription drugs segment is expected to grow at the highest rate among all counterparts in the forecast period of 2017 to 2023. With the rising cost of healthcare, governments and payers are pushing for increasing generics consumption over branded drugs, and thus driving growth of the generic APIs market. Additionally, several major pharmaceutical companies are also focusing on generic drugs along with branded drugs due to eroding product pipeline and patent expirations.

Captive Manufacturing to Remain Prominent Segment Until 2023

API market segmentation by manufacturing process: captive and contract. In 2017, the captive manufacturing segment generated a revenue of US$100,476.0 million. And, although the demand for the same is expected to expand at a lower than the average CAGR of 6.1% during 2017 to 2023, the segment will hold onto its leading position. The captive API manufacturing market segment includes the ingredients that are produced for internal consumption of a pharmaceutical company, and is usually preferred in cases involving sensitive or patent-protected drugs. The captive or in-house API manufacturing segment, once dominated by Europe, is steadily shifting toward Asia-Pacific where low cost of manufacturing as well as demand from generic manufacturers is huge. By the end of 2023, the segment is estimated to be worth US$143,042.2 million.

Demand for Biological APIs Expanding Quicker than Synthetic Chemicals

On the basis of API type, the report bifurcates the market into synthetic chemicals and biological. While the synthetic chemical API segment is expected to remain the most profitable category, promising to generate a demand worth of US$144,838.9 million by 2023, the biological API segment is showcasing stronger growth potential. Presently, most of the biologics are manufactured in-house due to intellectual property concerns and quality issues. However, the manufacturing of biological APIs is a very complex and challenging process. Hence, innovator companies are outsourcing the segment to contract manufacturing companies who have biological production expertise.

The report has also determined the potential of demand that will be forthcoming from the therapeutic areas of diseases pertaining to cardiovascular, oncology, NSAIDs, musculoskeletal, neurological, metabolic, and others. Among these, cardiovascular, neurological, and metabolic disorders have been identified as the prominent therapeutic areas, collectively providing for more than half of the total demand in the global active pharmaceutical ingredients market.

The U.S. to Sustain North America as Most Lucrative Region

Region-wise, North America is currently most profitable and is primed to remain so until 2023 too, when it will generate a demand worth of US$69,396.6 million. North America is the leading consumer of APIs; hence, API exporters consider it the most attractive market. India and China are the major suppliers of APIs to North America due to low production and labor costs. Biologics have become one of the top-selling drugs in North America in the recent past. Thus, the expected market entry of biosimilars with flexible regulatory process would boost the API market in the region. Country-wise, although the U.S. API market is showing a sluggish growth rate, it will remain more profitable than any other across the globe, having generated a revenue of US$44,940.9 million as of 2017.

BASF, Bayer, DuPont, and Dow Chemicals are some of the most prominent players currently operating in the global active pharmaceutical ingredients market.

Global Active Pharmaceutical ingredients Market: Overview

Active pharmaceutical ingredients (APIs) are bulk drug products that are used as raw materials for formulations. APIs of good quality are essential for the manufacture of effective and safe medicines. However, not all pharmaceutical companies possess in-house API manufacturing capabilities. Furthermore, a single company cannot produce all the APIs required for their formulation offerings.

The report provides detailed qualitative analysis of the market dynamics that affect the growth of the global market. Factors responsible for driving and restraining the growth of the global API market and future opportunities has been provided in the market overview section. This section of the report also provides comprehensive market comparative analysis and market attractiveness analysis for the global market by geography for the base year, Porter’s Five Forces analysis, and market share analysis by key players (%) for the base year, operating in the active pharmaceutical ingredients market. The report also encompasses detailed event impact analysis and value chain analysis for the global market.

Global Active Pharmaceutical ingredients Market: Segmentations

The global market has been broadly segmented on the basis of manufacturing process, type of API, types of drugs, therapeutic areas and geography. This report analyzes the current scenario as well as future market potential for market globally. This report comprises an elaborate executive summary, demonstrating a snapshot on market dynamics of various segments and sub-segments in a precise manner. Moreover, executive summary also comprises a waterfall chart, which reflects the market size of various segments in descending order.

The global API market is categorized in to captive manufacturing and contract manufacturing. Types of active pharmaceutical ingredients described in the global market include synthetic chemical API and biological API. Branded prescription drugs, generic prescription drugs, and over-the-counter drugs are various types of drugs covered in the global market. The global market encompasses various therapeutic areas such as cardiovascular disorders, oncology, metabolic disorders, neurological disorders, musculoskeletal disorders, NSAIDs and other therapeutic uses (such as infectious diseases). The market for these types has been extensively analyzed based on consistency, effectiveness, and sales revenue of the various products developed by the manufacturers.

Global Active Pharmaceutical ingredients Market: Regional Analysis

Geographies discussed and analyzed in the global market include North America, Europe, Asia Pacific, and Rest of the World. In addition the report also comprises the precise and detailed country wise analysis for the global active pharmaceutical ingredients market such as North America (U.S. and Canada), Asia Pacific (China, Japan, India and Rest of Asia Pacific), and Europe (Germany, U.K. and Rest of Europe). The market size and forecast in terms of US$ Mn for each segment has been provided for the period from 2013 to 2023. The report on the market also provides compound annual growth rate (CAGR %) for each of the market segments mentioned above for the forecast period from 2017 to 2023, considering 2016 as the base year.

Global Active Pharmaceutical ingredients Market: Competitive Landscape

A list of recommendations have been provided for new entrants to help establish a strong presence and for existing market players to take strategic decisions and to increase their market shares in the global active pharmaceutical ingredient market. The report concludes with the profiles of major players in the market based on various attributes such as company overview, financial overview, business strategies, product portfolio, and recent developments. Major players profiled in this report include Allergan plc, BASF SE, Boehringer Ingelheim Group, Cambrex Corporation, Dr. Reddy’s Laboratories Ltd., Lonza Group, Mylan, Inc., Sandoz (Novartis AG), Pfizer, Inc., Teva Pharmaceutical Industries Ltd., and WuXi Apptec.

Key Segments of the Global Active Pharmaceutical Ingredients Market

By Manufacturing Process

  • Captive Manufacturing
  • Contract Manufacturing

By API Type

  • Synthetic Chemical API
  • Biological API

By Drug Type

  • Branded Prescription Drugs
  • Generic Prescription Drugs
  • OTC Prescription Drugs

By Therapeutic Area

  • Cardiovascular Disorders
  • Metabolic Disorders
  • Neurological Disorders
  • Oncology
  • Musculoskeletal Disorders
  • NSAIDs
  • Other Therapeutics Uses

By Geography

  • North America
    • U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • Rest of Europe
  • Asia-Pacific
    • China
    • Japan
    • India
    • Rest of Asia Pacific
  • Rest of the World (RoW)