PHARMACEUTICAL EXCIPIENTS MARKET ANALYSIS
Global pharmaceutical excipients market is estimated to be valued at USD 10.11 Bn in 2024 and is expected to reach USD 17.55 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 8.2% from 2024 to 2031.
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The market growth is driven by increasing demand for generic and biologic drugs, rising geriatric population, and growth of pharmaceutical industry. Emerging markets and increasing demand for multifunctional excipients can offer market growth opportunities.
Growing pharmaceutical industry and increasing pharmaceutical production
The pharmaceutical industry has witnessed significant growth in recent years due to increasing drug development activities and production worldwide. This rising pharmaceutical production can boost demand for pharmaceutical excipients. Pharmaceutical excipients refer to the inactive substances used as carriers or diluents in drug formulations and delivery systems to facilitate administration of the active pharmaceutical ingredient in the body. These play vital roles in ensuring the accuracy of dosages and enhancing efficacy, stability and safety of drug products. With numerous new drugs in the pipeline and growing patient volumes globally, pharmaceutical manufacturers are heavily investing in scaling up production capacities. According to the World Health Organization (WHO), between 2019-2021, there was a 30% increase in the number of medicines approved by Stringent Regulatory Authorities across major markets like U.S., Europe and Japan. This increase in newly developed and approved drugs require precise excipients to produce final drug formulations in large commercial quantities. Excipients help pharmaceutical companies to efficiently manufacture medications in tablets, capsules, creams, ointments and other dosage forms for widespread distribution and access. As drug manufacturing activities continue expanding, there will be need for compatible and high-quality excipients. For instance, according to the European Federation of Pharmaceutical Industries and Associations in 2022, the pharmaceutical production in Europe had increased by 4.6% to EUR 300 billion in 2021. This increase in production value reflects rise in the volume of pharmaceutical manufacturing, thus, boosting demand for pharmaceutical excipients.
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Rising health expenditure and improving access to care
Traditional excipients were primarily used for dissolving, diluting or carrying the active ingredients but modern medicine requires excipients that can perform sophisticated functionalities. Many new drug formulations catering to chronic diseases rely on specialized excipients that can control drug release properties over an extended period of time or deliver drugs to targeted sites in the body. For example, COVID-19 vaccines developed by Pfizer and Moderna employ lipid nanoparticles and mRNA that help in intracellular delivery of mRNA and a robust immune response. New diabetes drugs uses hydrogels and polymeric microspheres to release insulin gradually throughout the day obviating the need for multiple injections. Rising biologics and genetically engineered therapies that impose stringent manufacturing and stability requirements can also drive the market growth. Biologics are large and complex molecules that rely on stabilizers, buffers and surfactants during formulation, storage as well as delivery. According to the data from World Health Organization, biologics now account for over 30% of new drug approvals. Their development until commercialization takes extensive research and testing of excipients to ensure the drug maintains its performance. This has stimulated extensive R&D on functional excipients that can better preserve biologic structure and activity.
Key Takeaways from Analyst:
Global pharmaceutical excipients market growth is driven by increasing generic drug production. The patent expiration of major blockbuster drugs and growing focus of pharmaceutical companies on generics can boost demand for excipients. The development of novel drug delivery systems such as targeted drug delivery and controlled release formulations requires specialized excipients.
Stringent regulatory norms pertaining to excipient quality and unexpected supply issues can hamper the market growth. Changing global regulations require extensive documentation for approvals, which delays the launch of new excipients. Furthermore, over-reliance of foreign manufacturers for key excipients may risk disruptions in supply.
Asia Pacific region is projected to be the fastest growing market for pharmaceutical excipients, owing to rising generic drugs production in India and China coupled with growing biologics manufacturing base in these countries. North America dominates the market due to increasing R&D investments from big pharma companies in the U.S. Europe is forecast to show steady gains due to presence of major drug-makers and favorable regulatory support for innovation.
Market Challenges: Stringent regulatory framework
Stringent regulatory framework across various countries can hamper the pharmaceutical excipients market growth. Regulations around drug development and approval have become quite complex, necessitating extensive documentation and clinical trial protocols by manufacturers. Compliance with various global guidelines such as the International Council on Harmonization (ICH) has increased the cost and timelines associated with new product development and existing product upgrades. Excipients used in drug formulations are also subjected to thorough safety and toxicity evaluations. Any changes to excipient sourcing or manufacturing processes require lengthy re-validation and re-approval procedures from regulatory bodies. This poses a practical challenge for pharmaceutical companies as it does not allow for flexibility in quickly responding to market demands or disruptions in supply chains. A significant number of clinical trials and pipeline drugs had been delayed or cancelled due to long review periods and inability to make formulation changes on time. For example, according to the Government of India's Central Drugs Standard Control Organization (CDSCO) annual report for 2021-22, nearly 30% of new drug applications did not get approved primarily owing to non-compliance issues.
Market Opportunities: Potential of 3D printing in pharmaceutical manufacturing
3D printing can offer growth opportunities for the pharmaceutical excipients market by facilitating personalized drug development. Using 3D printing, customized drugs can be produced directly at the site of care for individual patient needs. This personalized approach has potential to revolutionize drug therapy by improving efficacy and compliance. Several pharmaceutical companies are actively exploring use of 3D printing for developing specialized drugs with precise release profiles or complex internal structures not possible through conventional methods. For example, trials show 3D printed medicines can be designed to release drug at different rates based on diseased area's pH or other environmental factors in the body. This targeted delivery helps improve drug performance while reducing unwanted side effects. 3D printing also allows producing patient-specific medications shaped to their unique anatomy. According to the data published by National Institutes of Health, 3D printed drugs individually tailored for each asthmatic patient resulted in 57% higher lung deposition as compared to commercially available inhalers. This can significantly improve treatment of respiratory diseases. The technology provides flexibility to alter drug formulations quickly based on latest clinical research. As per World Health Organization Report in 2021, 3D printing can address medicine shortages and affordability issues, especially for chronic therapies in developing nations.
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By Product Type - Organic molecules
In terms of product type, organic chemicals segment is estimated to contribute the highest market share of 50.1% in 2024, owing to their versatility and suitability for a wide range of formulations. Organic excipients such as carbohydrates, flavors, preservatives and others offer functional properties that make drug development more effective. Carbohydrates like starch, sugars and cellulose derivatives are commonly used as fillers, diluents, binders and disintegrants. These help in achieving the desired bulk density in tablets and aid dissolution. Organic flavors and preservatives allow for development of more palatable oral dosage forms with longer shelf life. This improve patient compliance especially for pediatric medications. The ability of organic excipients to perform multiple functional roles and impart technologically advanced functionalities continues boosts their adoption over inorganic variants.
By Functionality - Enhancing drug delivery through fillers and diluents
In terms of functionality, fillers and diluents segment is estimated to contribute the highest market share of, owing to their critical role in determining drug release properties and stability. These work by increasing the bulk volume of tablets and powder blends, allowing for adjustment of density and flowability during manufacturing. Commonly used fillers include lactose, microcrystalline cellulose and calcium phosphate, which compress tablets without affecting active ingredient content. Diluents facilitate uniform dispersion of drugs within formulations for consistent dosing. Their non-reactive nature with actives ensures storage and shelf life are not compromised. Advanced filler and diluent technologies are improving controlled or sustained drug release capabilities. For example, co-processed excipients combining MCC with polymers or waxes can modulate drug solubility and diffusion properties.
By Formulation - Optimizing oral drug administration
In terms of formulation, oral segment is estimated to contribute the highest market share of, owing to patient preference and convenience over other routes of delivery. Tablets and capsules offer accuracy in dosing with flexibility in production. A wide range of excipients are optimized for properties like disintegration, dissolution and stability to support various types of orally administered drug products. Taste masking technologies utilizing flavors, coats and polymers ensure patient acceptability of formulations. Enteric polymers protect actives from degradation in the stomach. Colon targeting systems facilitate drugs to release in the intestines, improving treatment of specific conditions. Super disintegrants and effervescent agents quicken dispersion in the gastrointestinal tract. Innovation in oral drug delivery focuses on modified or controlled release to enhance safety, efficacy and patient experience over the long term.
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North America dominates the global pharmaceutical excipients market, owing to large presence of major pharmaceutical companies in U.S. and Canada Developed healthcare infrastructure in North America boosts demand for pharma excipient. Key players like Dow, Ashland, BASF have their largest R&D and manufacturing facilities located in the region to cater to nearby pharmaceutical customers. Stringent regulations regarding drug production and quality standards enforced by U.S. FDA also compel American drug makers to source excipients locally from well-established suppliers in the region.
Asia Pacific region has emerged as the fastest growing market for pharmaceutical excipients globally. Rapid economic development, healthcare reforms, growing population and urbanization have tremendously boosted pharmaceutical market across countries like India, China, Japan, Australia. Many large domestic and multinational drug companies have setup or expanded production capacities in Asia to leverage the low manufacturing costs and huge potential of Asian patient pool. India has gained prominence as the global hub for generic drugs production, and Indian excipient manufacturers are suitably scaling up their capacities to match the rising local demand from domestic drug manufacturers. China also has become integral part of global pharma supply chain with high reliance on locally made excipients considering Beijing's policy initiatives for healthcare and biopharma industry. Other Asian countries are also witnessing increased local pharmaceutical production activities along with growing medical tourism that boosts demand for supporting excipient ingredients within the region.
Pharmaceutical Excipients Market Report Coverage
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2023 | Market Size in 2024: | US$ 10.11 Bn |
| Historical Data for: | 2019 to 2023 | Forecast Period: | 2024 to 2031 |
| Forecast Period 2024 to 2031 CAGR: | 8.2% | 2031 Value Projection: | US$ 17.55 Bn |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: |
Ashland Global Holdings Inc., BASF SE, Innophos, DuPont de Nemours, Inc, Roquette Frères, Evonik Industries AG, Merck KGaA, JRS Pharma, Croda International Plc, Colorcon Inc., Archer Daniels Midland Company (ADM), The Lubrizol Corporation, Innophos Holdings Inc., Kerry Group plc, WACKER Chemie AG, Meggle Group, DFE Pharma |
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| Restraints & Challenges: |
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*Definition: Global pharmaceutical excipients market consists of substances formulated alongside the active pharmaceutical ingredient (API) in a drug product or dosage form. Excipients include binders, coatings, disintegrants, glidants, lubricants, diluents, flavors, preservatives and solvents. They provide bulk, consistency and stability to drug products. The excipients market facilitates drug development by providing these inactive but essential additive ingredients used in manufacturing pharmaceutical drug products like tablets, capsules, creams and injectables.
Pharmaceutical Excipients Market Report Snapshots
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