Medicines are to cure, diagnose, treat, or prevent a disease. The API, which stands for active pharmaceutical ingredient, is the most significant ingredient in any medication. All medicines are manufactured by using two important components that include the API, which is the primary ingredient and the excipient, which is the substance other than the drug that helps in delivery of the medication in the body. The pharmaceutical industry manufactures drugs that involves active pharmaceutical ingredient (API) and excipient. The final formulation of the drug consists of API which is the main component of the medication and excipient that allows the drug to be delivered to the intended therapeutic effect in the body. The efficacy and safety of the drug depends on the quality of APIs. The production of API is not based on a single reaction from raw material, but rather through a series of chemical compounds.
The global active pharmaceutical ingredient (API) market is estimated to be valued at US$ 206.0 billion in 2021 and is expected to exhibit a CAGR of 6.8% during the forecast period (2021-2028).
Figure 1.Global Active Pharmaceutical Ingredient (API) Market, in Terms of Value (US$ Billion), By Region, 2021
Geographic expansion of active pharmaceutical ingredients manufacturers is expected to drive the global active pharmaceutical ingredient (API) market growth during the forecast period
Several active pharmaceutical ingredients manufacturers are expanding their presence all across the globe. The active pharmaceutical ingredients (API) manufacturers are establishing their commercial production units in Asia to remain competitive and gain advantage over other competitors. For instance, in April 2018, STA Pharmaceutical, a subsidiary of WuXi AppTec signed an investment agreement with the government of Shanghai to build a new research & development (R&D) center for APIs and intermediates located next to the company’s existing Jinshan drug-substance manufacturing site. The company will add more than 30,000 square meters of laboratory space and 500 scientists.
|Base Year:||2020||Market Size in 2021:||US$ 206.0 Bn|
|Historical Data for:||2017 to 2020||Forecast Period:||2021 to 2028|
|Forecast Period 2021 to 2028 CAGR:||6.8%||2028 Value Projection:||US$ 326.7 Bn|
Teva Pharmaceutical Industries Ltd., Pfizer, Inc., Dr. Reddy’s Laboratories Ltd., Novartis AG, Mylan N.V., Amneal Pharmaceuticals LLC, Lonza Group, Lupin Limited, Fresenius Kabi, Hikma Pharmaceuticals, Cipla Limited, Glenmark Pharmaceuticals Limited, Sun Pharmaceutical Industries Ltd., Endo International plc, Aurobindo Pharma Limited, Apotex Inc, Taro Pharmaceutical Industries Ltd, Stada Arzneimittel AG, Krka Pharmaceuticals, CordenPharma International, Evonik Industries AG, and Biological E. Limited.
|Restraints & Challenges:||
Figure 2.Global Active Pharmaceutical Ingredient (API) Market Share (%), By Product Type, 2021
Increasing incidence of chronic diseases across the globe is expected to propel the active pharmaceutical ingredient (API) market growth during the forecast period
Rising prevalence of chronic diseases is expected to drive the active pharmaceutical ingredient (API) market growth during the forecast period. Cancer, diabetes, chronic obstructive pulmonary disease (COPD), asthma, hepatitis, coronary artery disease, and arthritis are all on the rise across the world. For instance, in June 2021, according to the World Health Organization (WHO), cardiovascular diseases (CVDs) are the main cause of mortality worldwide, accounting for an estimated 17.9 million people deaths from CVDs in 2019. Hence, such growing cases of chronic diseases is expected to drive production of medicines, thereby fueling demand for API production and supply.
Global Active Pharmaceutical Ingredient (API) Market– Impact of Coronavirus (COVID-19) Pandemic
In March 2020, World Health Organization (WHO) announced the COVID-19 outbreak. Since the COVID-19 virus outbreak in December 2019, the disease has spread to over 100 countries across the globe and the World Health Organization has declared it a public health emergency. According to the World Health Organization’s report, the manifestation of coronavirus disease (COVID-19) has resulted in more than 58.6 million infected individuals worldwide as of November 23, 2020.
Furthermore, players operating in the global active pharmaceutical ingredients market are facing major challenges on various fronts due to the COVID-19 pandemic. The major challenges include supply of raw materials required for manufacturing APIs and hence, drug formulations due to irregularities in transportation facility. Moreover, distributors of products are experiencing irregular demand for products from the end users due to increasing number of patients suffering from COVID-19 and other life threatening disorders.
Global Active Pharmaceutical Ingredient (API) Market: Restraint
Stringent regulatory scenario is one of the major factors hampering the market growth during the forecast period. Stringent global regulatory policies on quality assessments of active pharmaceutical ingredients manufacturing, facility certification, enhanced Current Good Manufacturing Practice (cGMP) guidelines, tightening inspection regimes, and increased supply chain security issues across emerging countries have a large impact on the cost of final active pharmaceutical ingredients products. The new entrants willing to enter into active pharmaceutical ingredients manufacturing are facing financial challenges, owing to aforementioned factors. This makes the active pharmaceutical ingredients market entry a financially unprofitable area of interest for small and mid-size enterprises (SMEs). Hence, such changing regulatory dynamics are hampering the growth of active pharmaceutical ingredients market in emerging economies.
Major players operating in the global active pharmaceutical ingredient (API) market include Teva Pharmaceutical Industries Ltd., Pfizer, Inc., Dr. Reddy’s Laboratories Ltd., Novartis AG, Mylan N.V., Amneal Pharmaceuticals LLC, Lonza Group, Lupin Limited, Fresenius Kabi, Hikma Pharmaceuticals, Cipla Limited, Glenmark Pharmaceuticals Limited, Sun Pharmaceutical Industries Ltd., Endo International plc, Aurobindo Pharma Limited, Apotex Inc, Taro Pharmaceutical Industries Ltd, Stada Arzneimittel AG, Krka Pharmaceuticals, CordenPharma International, Evonik Industries AG, and Biological E. Limited.
Active pharmaceutical ingredients (APIs) and excipients are the two most important components in the production of a medication. API is the raw material, which is used in manufacturing medications, whereas excipient is a substance that functions as a medium to help the body absorb the drug such as lactose or mineral oil in a tablet. Active pharmaceutical ingredients are produced by using highly technological industrial processes, both during the research & development and commercial production phases. Such compounds are developed to provide pharmacological activity or other direct impacts on disease diagnosis, cure, mitigation, therapy, or prevention, or to change the structure and function of the body. The growth of active pharmaceutical ingredient (API) market can be attributed to certain factors such as increasing funding initiatives by the government across different regions. For instance, in May 2020, the U.S. Department of Health and Human Services (HHS) announced that it will provide a funding of US$ 354 million to Phlow Corporation, a pharmaceutical company, under a four-year contract to produce the active pharmaceutical ingredients (APIs) needed for medications to treat patients with COVID-19 and related illnesses.
The rising U.S Food & Drug Administration (FDA) approvals for drugs by pharmaceutical companies is further expected to boost the global active pharmaceutical ingredient (API) market growth during the forecast period. For instance, in December 2020, Eily Lilly received the U.S FDA clearance for several medicines including increased dosages of its Trulicity therapy for the treatment of type 2 diabetes, Cyramza for the treatment of metastatic Estimated Glomerular Filteration Rate (EGFR)-mutated non-small cell lung cancer, and tauvid for individuals diagnosed with Alzheimer's disease.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.