Global Active Pharmaceutical Ingredients Market Research Report: Information By Manufacturing Process (Captive Manufacturing and Contract Manufacturing), Type of Synthesis (Synthetic and Biotech), By API Formulation (Generic API and Branded/Innovative API), Application (Cardiovascular Disease, Oncology, Neurological Disorders, Orthopedic Disorders, Respiratory, Gastrointestinal Disorders, Urology and others), Molecules (Large Molecule and Small Molecule) and Region - Forecast till 2023

The Global Active Pharmaceutical Ingredients (API) Market is expected to reach an estimated valuation of USD 215.12 Bn by the end of 2023, recording steady CAGR of over 4% during the forecast period (2018-2023). This projection signals toward a steady upward growth of the market, which is primarily attributable to the global increase in chronic and acute diseases.

Rapid urbanization has caused a change in lifestyles and led to the increase in incidences of chronic diseases such as cancer, diabetes and various pulmonary diseases among others; this is driving the sales of APIs as there is an increased demand for a variety of effective treatment options. Moreover, generic drugs have grown significantly in popularity over the years as patent expirations, particularly on well-known and effective drugs have allowed a superior degree of competition in the market. There are approximately 300 contract manufacturers that make generic API products across 40 different countries worldwide at present.

Although the factors mentioned above are facilitating consistent growth for the market, several challenges are expected to hamper market growth including stringent drug price control policies across various countries. Several countries are implementing regulations which do not allow pharmaceutical companies to set prices freely. Price control is being done in an effort to protect the interest of the global patient population. Notably, increasing scope for high-potency API is projected to provide the market with room to expand during the assessment period. Pharmaceutical companies are quickly shifting their focus towards high potency APIs such as monoclonal antibodies and recombinant proteins. Moreover, ongoing research and development of effective APIs in the industry is expected to prompt further market growth.

The global API market has been segmented on the basis of manufacturing process, type of synthesis, API formulation, application, molecule and region. By manufacturing, the market has been segmented into captive manufacturing and contract manufacturing. The contract manufacturing segment is expected to witness the highest CAGR during the forecast period, this is primarily due to the growing trend of pharmaceutical companies outsourcing API manufacturing, which allows a better focus on core competencies.

By type of synthesis, the market has been segmented into synthetic and biotech, with the former commanding a significant share of the market. However, it is the biotech segment which has been growing considerably over the last few years and is expected to exhibit a relatively higher CAGR due to the reduced side effects associated with biotech synthesis. The biotech segment is further sub-segmented into monoclonal antibodies, recombinant proteins, vaccines and others. Presently, monoclonal antibodies segment holds pole position, while the recombinant proteins segment is projected to grow at the fastest pace during the assessment as recombinant proteins are finding wide range of applications in the pharmaceutical sector.

By API formulation, the market has been segmented into generic API and innovative API. Patent expirations have propelled the generic API segment into leading position with a projected CAGR of 4.62% during the forecast period.

By application, the market has been segmented into cardiovascular disease, oncology, neurological disorders, orthopedic disorders, respiratory, gastrointestinal, urology, and others. Of these, the oncology segment currently accounts for the largest market share. This is owing to the increased occurrences of cancer worldwide. This segment is set to grow at a CAGR of 5.48% during the review period.

By molecule, the market has been segmented into small molecule and large molecule. Although the small molecule segment accounted for the largest market share in 2017, the large molecule segment is set to surpass in the near future and record a higher CAGR during the assessment period. This is primarily due to the growing focus on research and development of innovative APIs such as biologics to cater to the unmet patient needs.

Regional Analysis

Led by North America, the Americas command the largest market share due to a strong presence of competitors in the region. Countries such as U.S. and Canada have high occurrences of chronic and neurological diseases, which is a strong driver of market growth. Europe, is the second largest market for API. The growth of the market in the region can primarily be attributed to the initiatives taken in the region to support the growth of generic drugs. Improvement of pricing and reimbursement policies combined with a large number of manufacturing activities in Europe is creating growth opportunities for the market.

The API market is reaching maturity in developed nations across the globe, which has shifted market focus to the Asia-Pacific region, making it the fastest growing segment during the assessment period. The presence of a truly massive patient population in countries such as India and China, coupled with increasing incidences of chronic diseases in this region is expected to drive market growth. Cheap labor and lower required investments in infrastructure have prompted many reputable pharmaceutical companies to outsource manufacturing to this region, thus facilitating further growth.

Competitive Tracking

Top market players included Merck & Co. Inc., Eli Lilly and Company, GlaxoSmithKline plc., Pfizer Inc., Novartis International AG, Boehringer Ingelheim, Teva Pharmaceuticals Industries Ltd, and Sanofi.

Other reputable players who have been identified and analyzed in the report include Bristol-Myers Squibb, AbbVie, AstraZeneca plc, Abbott Laboratories and Johnson & Johnson Services Inc. among others. Research activities and innovation of products with improved efficiency is a key strategy employed by many of the leading pharmaceutical companies mentioned above.

Active Pharmaceutical Ingredients or API, in short, are growing in an increscent manner due to the unmatched effects of active chemicals in the drugs and the portions that work on treating the condition. The bridging of foreign manufacturers and local distributors has led to extensive progress in the market over the past few years. The launch of innovative and improved APIs in the market will boost the market’s progress to a great extent in the forthcoming period. Moreover, the constantly growing demand for biotech API has stimulated the firms to present better and new products to address the unmet requirements of the market.

The active pharmaceutical ingredient (API) market globally is expected to expand with a CAGR of 4.93 percent during the forecast period while earning revenues past the USD 215 billion mark by the year 2023. The outlook for growth in the economy is likely to perceive a sweeping rise in the API industry owing to the growing occurrence of chronic disorders such as diabetes, cardiovascular diseases, obesity and other infectious diseases which will lead to the launch of numerous innovative drugs. The rising cases of chronic diseases are also one of the foremost reasons for hospitalization with a huge number of patients with these conditions who may need re-admission in hospitals owing to an infection that can cause other chronic diseases. The expiration of patents of branded drugs has created a serious impression on drug manufacturers, as the companies can incur tremendous losses after expiration. Hence, the producers favor generic drugs over the branded ones. The generics are also expected to be the most rapidly growing type due to patent expirations of many blockbuster drugs.

However, the rapidly increasing scope for high-potency active pharmaceutical ingredients over the last decade has shifted the focus to the new biologics gold rush of recombinant proteins and monoclonal antibodies. As a result of this, the chemical API market for western contract manufacturers, on the whole, has undergone a sharp decline till 2015. Many custom manufacturing organizations (CMOs) have shifted their emphasis to rescheduling plants or manufacturing of higher-value biologics.

Segmental Analysis

The segmental analysis of the market is based on the segments of the manufacturing process, API formulation, application, type of synthesis, molecule, and region. The market segmentation by type of synthesis consists of biotech and synthetic segments. The synthetic segment in 2017 was worth USD 132,690.7 Mn. The manufacturing process based segmentation of the market comprises of contract manufacturing and captive manufacturing. The captive manufacturing segment presently has the significant market share and is expected to remain extremely lucrative throughout the assessment period. The API formulation segments the market into innovative API and generic API. The generic API segment presently held the leading market share in 2017. The segmentation based on molecule has been segmented into small molecule and large molecule. The small molecule segment is expected to maintain its top position till the end of 2023. The application based segmentation of the market has been segmented into oncology, cardiovascular disease, orthopedic disorders, neurological disorders, respiratory, urology, gastrointestinal disorders and others. The oncology segment is anticipated to develop with an incremental CAGR during the forecast period.

Regional Analysis

The market for APIs has been segmented into Europe, Americas, Asia Pacific (APAC), and the Middle East & Africa (MEA). The Americas region presently controls the significant market portion, and the trend will probably carry on in the foreseeable future. This factor is majorly related to the robust value sustained by the small molecule segment in both Canada and the U.S. Additionally the pharmaceutical industry is among one of the major and most exceptional ventures in the US nations. The pharmaceutical organizations in the USA have developed quickly in comparison with other countries. The European and Asia Pacific region are also anticipated to continue growth in the revenue pockets for the active pharmaceutical ingredients (API) market during the forecast period. Europe accounts for the second largest market for active pharmaceutical ingredients which is followed by the Asia Pacific region. While the APAC region, the market’s course is mostly directed by factors such as the amplified level of expense on equipment and infrastructure, expanding initiatives which are motivating investment in APIs from drug makers to increase the capacity to produce APIs.

Competitive Analysis

The players and key trends have created a positive tone for development. The competitors in the market are also leveraging their competitive benefits to secure their development in the market. The market progress by competitors also encompasses strong risk management strategies which are positively motivating the expansion of the market.

Bayer AG, Eli Lilly and Company, Pfizer Inc., F. Hoffmann-La Roche AG, Sanofi, Boehringer Ingelheim GmbH, Abbott Laboratories, GlaxoSmithKline Plc (GSK), Novartis AG, Merck & Co., Inc., and Teva Pharmaceutical Industries Ltd.