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Active Pharmaceutical Ingredients Market Research Report Information By Manufacturing Process (Captive Manufacturing and Contract Manufacturing), By Type of Synthesis (Synthetic and Biotech), By API Formulation (Generic API and Branded/Innovative API), By Application (Cardiovascular Disease, Oncology, Neurological Disorders, Orthopedic Disorders, Respiratory, Gastrointestinal Disorders, Urology, and others), By Molecules (Large Molecule and Small Molecule), And By Region (North America, Europe, Asia-Pacific, And Rest Of The World) – Market

ID: MRFR/Pharma/0876-CR | 157 Pages | Author: Rahul Gotadki| February 2021

Global Active Pharmaceutical Ingredients Market Overview

Active Pharmaceutical Ingredients Market Size was valued at USD 170.98 Billion in 2023. The Global Active Pharmaceutical Ingredients industry is projected to grow from USD 179.81 Billion in 2024 to USD 271.34 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 5.28% during the forecast period (2024 - 2032).

Raised incidences of chronic diseases and an upsurge in novel drug applications are the key market drivers enhancing the market growth of active pharmaceutical ingredients.

Source Secondary Research, Primary Research, MRFR Database and Analyst Review

The increased prevalence of chronic illnesses is predicted to increase the need for drugs, propelling the market growth for active pharmaceutical components. The cardiology market sector holds a sizable market share since a big population uses various CVD drugs as a result of the high frequency of cardiovascular illnesses.

The amount of money spent on pharmaceutical R&D has increased significantly and virtually linearly, while fewer new drugs are being FDA-approved each year. By providing exact human tissue models, organ-on-a-chip technology is anticipated to close the gaps in drug screening. By expediting, reducing expenses, and improving the success of medicine research, this technology has the potential to completely transform the pharmaceutical business. Because of this, the use of organ-on-chip models in medication development is seen as proof of the growth of active pharmaceutical ingredients, which is another reason fueling the revenue.

April 2023: At least two Indian pharmaceutical companies, Natco Pharma and MacLeods Pharmaceuticals, are prepared to release their copies of Bedaquiline, Johnson & Johnson's ground-breaking TB medication. The J&J medicine is less toxic and more efficient than conventional therapies, and it is the first therapy for tuberculosis to receive worldwide approval in almost 40 years. An source in the business revealed that Natco also produced Bedaquiline's active pharmaceutical ingredient (API) and final dosage form. Given the unique characteristics of the medicine, it was in the process of obtaining further regulatory approvals.

Active Pharmaceutical Ingredients (API) Market Trends

  • Growing Prevalence of chronic diseases to boost market growth

The demand for medications is anticipated to rise due to the rising prevalence of chronic diseases, accelerating the market growth for active pharmaceutical ingredients. The World Health Organization (WHO) estimates that cardiovascular illnesses claim 17.9 million lives annually, making them the top cause of mortality worldwide. According to the Alzheimer's Association, 5.8 million Americans will have Alzheimer's disease in 2020. This illness, the sixth-leading cause of mortality in the US, is more common among persons over 65. This number is anticipated to reach 14 million as the baby-boomer generation ages, and the situation worsens over the projection period as they approach the age of 65.

In addition, introducing fresh pharmaceutical and biological products, purchases, joint ventures, and geographical expansions are some strategic actions businesses perform to maintain market stability. It will probably encourage market expansion shortly. For instance, in 2020, and Bright Path Labs developed AI-based technology to continually produce crucial APIs for creating crucial small-molecule drugs.

Due to the large population using various CVD medications due to the high prevalence of cardiovascular disorders, the cardiology segment commands a sizeable market share. Cardiovascular diseases (CVD) continue to be the main cause of morbidity and the leading cause of mortality in Europe, according to the European Society of Cardiology's 2019 Statistics. There are about 6 million new cases of CVD in the EU and over 11 million cases in Europe annually. With about 49 million sufferers in the EU, the disease has a significant economic cost of EUR 210 billion annually, enhancing the CAGR ly in recent years.

Despite enormous spending in pharmaceutical R&D, which has climbed almost linearly, the annual number of new FDA-approved medications has fallen. The organ-on-a-chip technology is expected to bridge the gaps in drug screening by offering precise human tissue models. This technology has the potential to revolutionize the pharmaceutical industry by accelerating, lowering costs, and increasing the success of medication development. As a result, the adoption of organ-on-chip models in drug development is regarded as evidence of the active pharmaceutical ingredients expansion, another factor driving the revenue.

Active Pharmaceutical Ingredients (API) Market Segment Insights

Active Pharmaceutical Ingredients Manufacturing Process Insights

The segmentation, based on the manufacturing process, includes captive manufacturing and contract manufacturing. The captive manufacturing segment held the majority share in 2021 of the revenue. Due to the simple accessibility of raw materials and large investments made by key players to establish high-end manufacturing facilities, it is predicted to grow significantly in the next years. Further evidence that important firms are more focused on internal production than outsourcing comes from recent developments and initiatives

Active Pharmaceutical Ingredients Type Insights

The Segmentation, based on type, includes synthetic and biotech. The synthetic segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period, 2024-2032. It is attributable to improved techniques for synthesizing these compounds and the greater accessibility of basic ingredients. In the upcoming years, several synthetic compounds are also projected to lose their patent protection, which is likely to spur growth, and positively impact the market growth.

Active Pharmaceutical Ingredients API Formulation Insights

The data has been bifurcated by API formulation into generic API and branded/innovative API. The innovative API segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period 2024-2032. Increased R&D initiatives for creating innovative drugs and helpful government laws are credited with this expansion. Numerous innovative items are currently being developed due to intensive research in this area and are anticipated to be on sale throughout the projected period. It is anticipated that new players in this sector will fuel market expansion.

Figure 2  Active Pharmaceutical Ingredients Market by API Formulation, 2021 & 2032 (USD Billion)

Active Pharmaceutical Ingredients Market by API Formulation, 2021 & 2030 (USD Billion)

Source Secondary Research, Primary Research, MRFR Database and Analyst Review

Active Pharmaceutical Ingredients Application Insights

Based on application, the  active pharmaceutical ingredients industry has been segmented into cardiovascular disease, oncology, neurological disorders, orthopedic disorders, respiratory, gastrointestinal disorders, urology, and others. Cardiovascular diseases held the largest segment share in 2021. It is explained by the target diseases' rising  prevalence. The Stroke Association, World Heart Federation, and World Stroke Organization are a few organizations working to increase public awareness of cardiovascular diseases.

Active Pharmaceutical Ingredients Molecules Insights

Based on molecules, the  active pharmaceutical ingredients market has been segmented into large and small molecules. The small molecule held the largest segment share in 2021. Small molecules are being used more and more in the clinical pipeline despite the market entry of new biological entities. Small-molecule medications have received the most FDA approvals in the past ten years, and the trend is projected to continue during the forecast period.

August 2023: The Indian market was introduced to 120 DMF (Drug Master File) Quality Medicines in August 2023 by Mankind Pharma. The goal of this program is to guarantee that all people have access to high-quality medications. India is a frontrunner in the world when it comes to providing generic medications that meet the exacting DMF quality criteria established for Active Pharmaceutical Ingredients (APIs). In a facility that the USFDA has approved, DMF grade API is produced for the Indian market. As a result, the finished medication is always of the highest quality and most effective. Because it adheres to US pharmacopeia and is produced in USFDA-approved facilities for medications of the highest quality and efficacy, DMF grade API is purer than regular API.

May 2023: Otsuka Chemical Co., Ltd. and Yokogawa Electric Corporation's joint venture May SynCrest Inc., a peptide and nucleotide CRDMO (Contract Research, Development and Manufacturing Organization), announced that its services are now offered to pharmaceutical companies and research institutions in Japan, Europe, North America, and South America. The firm can generate active pharmaceutical ingredients (APIs), intermediates, and raw materials while addressing the unique problems at each stage of the drug development value chain thanks to its sophisticated continuous flow synthesis with in-line monitoring.

Active Pharmaceutical Ingredients Regional Insights

By Region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. North America market accounted for USD 121.65 billion in 2021 and is expected to exhibit a significant CAGR growth during the study period. Because of the improvements in diagnostic technology brought on by the rise in the prevalence of chronic diseases and other neurological conditions, the market for active pharmaceutical ingredients in North America currently accounts for the majority of the market for active pharmaceutical ingredients ly.

Further, the major countries studied in the market report are The U.S., Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3  Active Pharmaceutical Ingredients Market Share By Region 2021 (%)

Active Pharmaceutical Ingredients Market Share By Region 2021 (%)

Source Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe active pharmaceutical ingredients (API) market accounts for the second-largest market share. The surge in research funding and the local presence of significant market players are expected to drive the industry. Because of increased investments, there are more biopharmaceutical businesses in Europe. Further, the Germany held the largest market share, and the UK active pharmaceutical ingredients market was the fastest-growing market in the European region.

The Asia-Pacific Active Pharmaceutical Ingredients (API) Market is expected to grow at the fastest CAGR from 2024 to 2032 due to the prevalence of quickly developing markets like India, China, and South Korea, which are emerging as major hubs for outsourcing drug manufacturing. Japan is predicted to dominate the market for active pharmaceutical ingredients in the Asia Pacific. Moreover, China active pharmaceutical ingredients market held the largest market share, and India was the fastest-growing market in the Asia-Pacific region.

Active Pharmaceutical Ingredients Key Market Players & Competitive Insights

Major market players are spending a lot of money on R&D to increase their product lines, which will help the grow even more. Market participants are also taking various strategic initiatives to grow their  footprint, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the active pharmaceutical ingredients industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market environment.

One of the primary business strategies manufacturers adopt in the industry to benefit clients and expand the market sector is manufacturing locally to reduce operating costs. In recent years, the active pharmaceutical ingredients industry has provided some of the most significant benefits. The major player such as Sanofi SA (France), Pfizer Inc (US), Abbott (US), and others are working on expanding the market demand by investing in research and development activities.

Sanofi S.A. is a French pharmaceutical and healthcare multinational with its headquarters in Paris. Sanofi develops over-the-counter medicines in addition to researching, developing, manufacturing, and marketing pharmacological products, mostly for the prescription market. In January 2021, Sanofi announced that it would pay $1.45 billion for the British biotech Kymab Ltd. and its prospective first-in-class medication candidate, KY1005.

Also, Roche is the brand name for Hoffmann-La Roche Ltd., a  healthcare organization with two divisions pharmaceuticals and diagnostics. Basel is where the corporate headquarters are situated. Roche is the world's top supplier of cancer medicines and the fifth-largest pharmaceutical firm in terms of revenue. In March 2021, Roche announced that it would pay $1.8 billion to purchase GenMark Diagnostics.

Key Companies in the active pharmaceutical ingredients (API) market include

  • Sanofi SA (France)

  • Hoffmann-La Roche Ltd (Switzerland)

  • Pfizer Inc (US)

  • Abbott (US)

  • Bayer AG(UK)

  • Merck & Co. Inc (US)

  • Boehringer Ingelheim GmbH (UK)

  • GlaxoSmithKline Plc (UK)

  • Novartis AG (UK)

  • Eli Lilly and Company (US)

  • Teva Pharmaceutical Industries Ltd (Israel), among others

Industry Developments

April 2022: PharmaZell, which provides specialized is joining forces with Novasep, a prominent company known for its contract research and production of complicated small molecules and antibody-drug conjugates.

October 2022: Aenova Group, a well-known contract manufacturing & development company, joined forces with Microcaps, a biotech start-up that specializes in microencapsulation technology.

Active Pharmaceutical Ingredients Market Segmentation

By Manufacturing Process Outlook

  • Captive Manufacturing

  • Contract Manufacturing

By Type Outlook

  • Synthesis Synthetic

  • Biotech

By Formulation Outlook

  • Generic API

  • Branded/Innovative API

By Application Outlook

  • Cardiovascular Disease

  • Oncology

  • Neurological Disorders

  • Orthopedic Disorders

  • Respiratory

  • Gastrointestinal Disorders

  • Urology

By Molecules Outlook

  • Large Molecule

  • Small Molecule

By Regional Outlook

  • North America

    • US

    • Canada

  • Europe

    • Germany

    • France

    • UK

    • Italy

    • Spain

    • Rest of Europe

  • Asia-Pacific

    • China

    • Japan

    • India

    • Australia

    • South Korea

    • Australia

    • Rest of Asia-Pacific

  • Rest of the World

    • Middle East

    • Africa

    • Latin America

Report Attribute/Metric Details
Market Size 2023 USD 170.98 billion
Market Size 2024 USD 179.81 billion
Market Size 2032 USD 271.34 billion
Compound Annual Growth Rate (CAGR) 5.28% (2024-2032)
Base Year 2023
Market Forecast Period 2024-2032
Historical Data 2018 & 2022
Market Forecast Units Value (USD Billion)
Report Coverage Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends
Segments Covered Manufacturing Process, Type, API Formulation, Application, Molecules, and Region
Geographies Covered North America, Europe, Asia Pacific, and the Rest of the World
Countries Covered The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil
Key Companies Profiled Sanofi SA (France), Hoffmann-La Roche Ltd (Switzerland), Pfizer Inc (US), Abbott (US), Bayer AG (UK), Merck & Co Inc (US), Boehringer Ingelheim GmbH (UK), GlaxoSmithKline Plc (UK), Novartis AG (UK), Eli Lilly and Company (US), and Teva Pharmaceutical Industries Ltd (Israel)
Key Market Opportunities Active pharmaceutical ingredients that are extremely potent
Key Market Dynamics Raised incidences of chronic diseases Upsurge in novel drug applications

Frequently Asked Questions (FAQ) :

The  active pharmaceutical ingredients market size was valued at USD 170.98 Billion in 2023.

The  market of active pharmaceutical ingredients is projected to grow at a CAGR of 5.28% during the forecast period 2024-2032.

North America had the largest share in the  market of active pharmaceutical ingredients.

The key players in the market of active pharmaceutical ingredients are Sanofi SA (France), Hoffmann-La Roche Ltd (Switzerland), Pfizer Inc (US), Abbott (US), Bayer AG (UK), Merck & Co Inc (US), Boehringer Ingelheim GmbH (UK), GlaxoSmithKline Plc (UK), Novartis AG (UK), Eli Lilly and Company (US), and Teva Pharmaceutical Industries Ltd (Israel).

The captive manufacturing category dominated the market in 2023.

Innovative API had the largest share in the market.

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