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Active Pharmaceutical Ingredients Market Growth Triggered by Investments to Develop High-Quality API

Author: Rahul Rastogi
by Rahul Rastogi
Posted: Jul 11, 2019

According to IMARC Group, the global active pharmaceutical ingredients market reached a value of US$ 176.3 Billion in 2018. The market size is further projected to reach a value of US$ 247.2 Billion by 2024, expanding at a CAGR of 5.8% during 2019-2024. Active pharmaceutical ingredients refer to the specific components that are biologically active within the drug and are responsible for the desired effect on the individuals. These ingredients are manufactured through a variety of processes including recombinant DNA, chemical synthesis, isolation and recovery from natural sources, and fermentation processes.

In recent decades, pharmaceutical companies have started outsourcing the manufacturing of APIs to contract organizations. As the price of APIs accounts for the main cost of the drug, outsourcing has helped pharmaceutical companies in producing drugs which are more effective and cost-efficient. In addition, these companies are investing in R&D activities to develop high-quality APIs as their quality directly affects the safety and efficacy of the drug. This is the major market trend currently contributing to the growth of the industry at a global level. In addition, the rising number of blockbuster patent expiration is creating a significant opportunity for generic API manufacturers. Apart from this, governments of many emerging countries are encouraging domestic production of APIs by offering various incentives to manufacturers. These initiatives are expected to decrease the dependence on foreign suppliers in these regions.

Innovative APIs are the most popular type

Innovative APIs represent the most popular type due to a rise in research activities for drug discovery and development as well as technological advancements in manufacturing. They are followed by generic APIs. As several drugs are set to lose their patent protection in the upcoming years, the production capacity for their generic counterparts is witnessing an expansion all across the globe.

Captive manufacturers hold the largest market share

On the basis of the type of manufacturer, captive manufacturers dominate the market as they have more control over the production process. Also, they can purchase raw materials directly from the manufacturers, thereby reducing management and production costs. Captive manufacturers are followed by merchant API manufacturers. Merchant manufacturers are further segregated as innovative and generic manufacturers. Among these, merchant generic API manufacturer represents the largest segment, holding the majority of the total market share.

Synthetic active pharmaceutical ingredients exhibit a clear dominance in the market

Based on the type of synthesis, the market has been segregated as synthetic and biotech APIs. At present, synthetic APIs account for the largest market share owing to the abundant availability of raw materials and easier synthesis protocols. Synthetic APIs are further bifurcated into innovative and generic synthetic APIs, whereas biotech APIs are classified on the basis of the type as innovative biotech APIs and biosimilars. On the basis of the product, synthesis is segmented into monoclonal antibodies, vaccines, cytokines, fusion proteins, therapeutic enzymes and blood factors. The synthesis segment has also been divided based on the expression system into mammalian, microbial, yeast, plant and insect expression systems.

Oncology remains the largest application segment for active pharmaceutical ingredients

On the basis of the application, oncology represents the largest application segment, accounting for the majority of the total market share. The excessive consumption of tobacco and alcohol along with changing lifestyles of consumers has led to the rising prevalence of cancer cases which are driving the demand for oncology APIs. Some of the other application areas are cardiovascular and respiratory, diabetes, central nervous system disorders and neurological disorders.

North America enjoys the leading position

Currently, North America is the leading market for active pharmaceutical ingredients. Owing to the presence of a large geriatric population and high prevalence of chronic diseases such as diabetes and cancer, governments are increasing its overall healthcare expenditure which, in turn, is strengthening the growth of the API market in the region. North America is followed by Europe, Asia Pacific, Middle East and Africa, and Latin America.

The global active pharmaceutical ingredients industry is fragmented in nature due to the presence of a large number of players operative in the market. Some of the key manufacturers are Pfizer, Inc., Novartis International AG, Sanofi, Boehringer Ingelheim, Bristol-Myers Squibb, Teva Pharmaceutical Industries Ltd., Eli Lilly and Company, GlaxoSmithKline, Merck & Co., Inc. and AbbVie Inc.

Browse Related Report by IMARC Group:

Proppants Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2019-2024

About IMARC Group: IMARC Group is a leading market research and consulting company that offers management strategy and market research worldwide. The company has done multiple projects on the active pharmaceutical ingredients industry, which has enabled the clients to set up and expand their businesses successfully. Some of the company’s offerings include:

  • Market Research
  • Plant setup
  • Plant Expansion
  • Marketing and sales
  • Procurement and Distribution
  • Innovation and Product Development
About the Author

Imarc Group is a leading market research and consulting company that offers management strategy and market research worldwide.

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Author: Rahul Rastogi

Rahul Rastogi

Member since: May 21, 2019
Published articles: 26

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