Active Pharmaceutical Ingredients (APIs) Market Size is projected to grow at a CAGR of over 6.8%

Report Description:

Active Pharmaceutical Ingredients (APIs) are the main biologically active components in a drug product, responsible for the therapeutic effects. They are produced by various processes such as chemical synthesis, biotechnology, and extraction from natural sources. The global API market is expected to grow due to factors such as the increasing prevalence of chronic diseases, rising demand for generic drugs, and the increasing use of biologics.

The Active Pharmaceutical Ingredient Market is projected to reach a valuation of USD 383.55 Bn by 2033 at a compound annual growth rate (CAGR) of 6.8%, from USD 198.66 Bn in 2023 during 2023-33.

The demand for APIs is driven by factors such as the increasing prevalence of chronic diseases, the rising demand for generic drugs, and the increasing use of biologics. The trend towards personalized medicine and the development of complex drugs such as antibody-drug conjugates and other biologics are also driving the demand for APIs. In addition, the increasing focus on research and development of new drug molecules and the outsourcing of API production to contract manufacturers is expected to drive the market in the future.

Key Takeaways:

• North America region has generated a market share of 39.5% in 2021.
• Asia Pacific region is poised to grow at a CAGR of 7.4% from 2022 to 2030. 
• By type of manufacturer, the captive API segment has captured a market share of 59.5% in 2021. 
• By type, the innovative APIs segment has held a market share of 66.4% in 2021. 
• By application, the cardiovascular diseases segment has held a 19.7% revenue share in 2021.
• The oncology segment is poised to grow at a CAGR of 8.5% from 2022 to 2030.
• By type of synthesis, synthetic API segment has generated 73% revenue share in 2021.
• The biotech segment is expanding at a CAGR of 7.4% between 2022 to 2030.

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Regional Snapshot

• North America dominated the revenue share for 2022 ( 39.5%), and is expected to continue its lead throughout the projection period. A sedentary lifestyle and an increased risk of developing cancer are the main reasons for this. It encourages R&D, expanding the market and encouraging R&D.
• Asia Pacific is expected to have the fastest CAGR of 7 %, An advantage for the region is the presence of economies like India or China that allow for API creation at a more affordable cost. Market expansion is expected to be driven by the region's rising healthcare spending.
• Europe will experience tremendous growth over the projected period. A rise in funding for research and the presence of market leaders locally are expected to drive this sector. Europe has more biopharmaceutical business due to higher investments.

Market Dynamics

1. Drivers:

• Increasing prevalence of chronic diseases such as cancer, diabetes, and cardiovascular diseases
• Rising demand for generic drugs and biosimilars
• Increasing use of biologics and complex drugs
• Outsourcing of API production to contract manufacturers

2. Restraints:

• High costs associated with research and development of new drug molecules
• Regulatory challenges and the high cost of compliance
• Competition from low-cost API manufacturers in emerging economies

3. Opportunities:

• Increasing investment in research and development of new drug molecules
• Growing demand for personalized medicine and complex drugs
• Emerging markets in Asia-Pacific and Latin America

4. Challenges:

• Stringent regulatory requirements and the high cost of compliance
• Competition from low-cost API manufacturers in emerging economies
• Increasing pressure to reduce costs and increase efficiency in the pharmaceutical industry

Recent Developments

• The Chasse-sur-Rhone France, where Novasepui is located, has invested over EUR 6 Million to upgrade its capabilities in order to develop new APIs for fields such as oncology and the central nervous systems (CNS).
• Teva Pharmaceutical and MEDinCell applied for approval for a TV-46000/mdc-IRM Clearance (subcutaneous use of risperidone extended-release injection suspension). This was granted by the US Food and Drug Administration in August 2021. The drug is used to treat schizophrenia.
• Pfizer Inc. announced that it had signed a multiyear agreement with Gilead Sciences Inc. to manufacture and supply Gilead’s investigational antiviral medication remdesivir. This support will help to increase the supply of COVID-19 investigational treatment.
• Boehringer Ingelheim acquired Northern Biologics in April 2020. This acquisition increased the number of products in the oncology category at Boehringer Ingelheim.

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Competitive Landscape

Some of the noteworthy companies in the active pharmaceutical ingredient market include:

• Merck & Co., Inc.
• AbbVie, Inc.
• Bristol-Myers Squibb Company
• Boehringer Ingelheim International GmbH
• Cipla, Inc.
• Teva Pharmaceutical Industries Ltd.
• Albemarle Corporation
• Viatris Inc.
• Other Key Players

Market Segmentation

By Type of Synthesis

• Synthetic Segment
• Biotech Segment
  • Vaccines
  • Recombinant Proteins
  • Monoclonal Antibodies

By Type

• Innovative APIs
• Generic APIs

By Type of Manufacturer

• Captive APIs
• Merchant APIs

By Application

• Oncology Segment
• Cardiovascular Diseases
• Ophthalmology
• CNS and Neurology
• Other Applications

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Report Scope

Frequently Asked Questions:

1. What are active pharmaceutical ingredients?

• Active Pharmaceutical Ingredients (APIs) are the main biologically active components in a drug product, responsible for the therapeutic effects.

2. What are the major drivers of the API market?

• The major drivers of the API market are the increasing prevalence of chronic diseases, rising demand for generic drugs and biosimilars, increasing use of biologics and complex drugs, and outsourcing of API production to contract manufacturers.

3. What are the major challenges of the API market?

• The major challenges of the API market are stringent regulatory requirements and the high cost of compliance, competition from low-cost API manufacturers in emerging economies, and increasing pressure to reduce costs and increase efficiency in the pharmaceutical industry.

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