Active Pharmaceutical Ingredients Market

Market Overview

The Global Active Pharmaceutical Ingredients Market size is projected to grow from USD 240.68 billion in 2024 to USD 249.68 billion by 2033, exhibiting a CAGR of 10.36% during the forecast period.

The bioactive components of pharmaceutical medications that produce the intended therapeutic effects are known as active pharmaceutical ingredients, or APIs. Before being incorporated into drugs, these ingredients—which can be chemically manufactured or derived from natural sources like plants, animals, or microbes—go through a rigorous evaluation process to guarantee their quality, safety, and efficacy. Because APIs have a direct impact on a drug's efficacy, they are the main focus of pharmaceutical research and development. Pharmaceutical businesses must adhere to regulatory regulations in order to continuously produce APIs that fulfill quality criteria. Additionally, in order to create different dosage forms like tablets, capsules, or injections, APIs are frequently combined with inert materials like fillers and binders. As a result, APIs are essential components for developing safe and effective drugs, which promote improvements in patient care and treatment results.

Since they are the primary components of pharmaceuticals and directly affect their efficacy and safety, active pharmaceutical ingredients, or APIs, are extremely important in the pharmaceutical industry. Before being included into pharmaceutical formulations, these physiologically active substances go through a thorough testing, development, and research process to guarantee that they meet strict regulatory requirements. Whether the goal is to treat conditions, reduce symptoms, or prevent illnesses, APIs are essential to achieving the intended therapeutic effects. Additionally, they play a crucial role in promoting innovation in medication research and discovery, which advances patient care and medical treatment. Their significance goes beyond only treatment effectiveness and includes elements like consistency, quality control, and regulatory compliance.

Pharmaceutical companies invest a lot of money in the development, testing, and manufacturing of APIs in order to provide high-quality drugs that meet the medical requirements of people all over the world. Additionally, APIs are critical to the generic medicine industry because they make it easier to produce affordable drugs, which increases access to necessary therapies. All things considered, APIs are essential parts of pharmaceutical formulations, highlighting their critical role in improving public health outcomes and raising people's quality of life everywhere.

Active Pharmaceutical Ingredients Market Segmentation Analysis

Due to the strong demand for generic medications, the synthetic category generated 70.66% of revenue in 2023. Manufacturers of chemicals and synthetic APIs have potential because of this, particularly in light of outsourcing tendencies. Cambrex doubled the capacity of their small molecule API production plant with a $38 million investment. Due to rising investments in the biopharmaceutical and biotechnology industries, which would facilitate the discovery of novel cancer therapies, the biotech API segment is anticipated to grow at the quickest rate. For high income and profitability, major firms like OLON Group are concentrating on these APIs. The captive APIs market led in 2023 as businesses made investments in internal manufacturing to save expenses and contamination hazards. Development is anticipated to be accelerated by protein synthesis and artificial intelligence, with major companies like as AstraZeneca favoring domestic production over outsourcing.

The pharmaceutical industry's inclinations toward contract manufacturing and outsourcing are predicted to propel the Merchant APIs segment's quick expansion. By avoiding costly infrastructure and equipment improvements, businesses are cutting expenses. Important businesses like MilliporeSigma have increased their capabilities to improve their market presence since the outbreak. 

Due to the expiration of patents on branded molecules, the generic APIs market is anticipated to increase at the quickest rate. By 2030, the pharmaceutical sector will have reached a patent cliff, giving producers a chance to keep up with growing demand. Because cardiovascular illnesses are becoming more common, the cardiology sector led the API market in 2023. Given that CVDs impact more than half a billion people and resulted in 20.5 million deaths in 2021, there has been a lot of research done on APIs for cardiovascular illnesses, such as simvastatin and rosuvastatin calcium. The rising incidence of cancer worldwide is predicted to fuel the oncology segment's fast growth. For medication development, patient safety, and innovation, cooperation between pharmaceutical corporations, academic institutions, and regulatory bodies is essential.

In 2023, the prescription segment dominated the API market, with uptake largely dependent on physicians' prescriptions. However, prescription rates for Proton Pump Inhibitors and Histamine-2 Receptor Antagonist have plateaued due to adverse effects. Oncology treatment primarily uses chemotherapy, targeted therapy, immunotherapy, and hormonal therapy. Due to consumer trends toward gut health and probiotics, the over-the-counter (OTC) market is expected to increase rapidly, opening significant potential for preventative items including nutraceuticals and health supplements.

Active Pharmaceutical Ingredients Market Dynamics

Driver

The rise in chronic diseases like cancer, cardiovascular disorders, and diabetes is driving global demand for Active Pharmaceutical Ingredients (APIs). These diseases pose significant health challenges, necessitating pharmaceutical interventions to manage symptoms, halt disease progression, and enhance patient well-being. APIs are essential components in these formulations. New therapeutic targets and creative treatment approaches have been made possible by developments in medical science and technology. In order to treat the worldwide burden of chronic illnesses, APIs are critical for converting these findings into potent therapeutics. The reach of API makers has grown as a result of the globalization of healthcare and the easier availability to medications in developing nations.

Restraint

High production costs for small and medium-sized businesses (SMEs) in the API sector, including initial capital, ongoing business expenses, and regulatory compliance requirements, pose significant challenges. These costs include quality assurance systems, employee training, and regulatory filings. Limited financial resources and economies of scale may limit SMEs' ability to compete with larger pharmaceutical companies. To improve cost competitiveness, strategic investments in supply chain management, technology, infrastructure, and regulatory compliance are needed.

Opportunities

Manufacturers of Active Pharmaceutical Ingredients (API) have a great chance to focus on creating complex biological chemicals due to the growing demand for biopharmaceuticals and biosimilars. While biosimilars provide more affordable options, biopharmaceuticals offer innovative therapies for conditions including cancer and autoimmune illnesses. Manufacturers of APIs must, however, become proficient in complex production processes and follow strict quality control guidelines.

Active Pharmaceutical Ingredients Market Trends

The number of elderly people worldwide is rising. According to the UN, 771 million people were 65 and over in 2022; by 2030, that figure is expected to rise to 994 million, and by 2050, it will reach 1.6 billion. With an expected threefold rise in the number of individuals 60 and over, Africa is seeing the highest expansion in the number of elderly people (18.8 billion by 2050), followed by Latin America. The biggest risk factor for the onset of illnesses, such as neurological and cardiovascular conditions, is thought to be aging. As a result, the world's increasing aging population is having a significant influence on the API business.

Increases in infectious illnesses, hospital-acquired infections, neurological, genetic, and cardiovascular conditions, as well as changes in lifestyle, are the main factors propelling the market's expansion. Rising obesity rates and dietary abnormalities are contributing to the rise in cardiovascular illnesses, which are the world's leading cause of mortality. Outsourcing APIs has become profitable, but the COVID-19 pandemic has prompted companies to diversify suppliers and manufacturers. Key companies like EUROAPI are leveraging this trend with acquisitions, like EUROAPI's acquisition of BianoGMP to enhance their expertise in oligonucleotide manufacturing.

Competitive Landscape

• AbbVie Inc.

• Albemarle Corporation

• Aurobindo Pharma

• BASF SE

• Boehringer Ingelheim

• Cambrex Corporation

• Cipla Inc.

• Dr. Reddy’s Laboratories Ltd.

• DSM Sinochem Pharmaceuticals

• Fresenius Kabi AG

• GlaxoSmithKline plc

• Hikma Pharmaceuticals PLC

• Johnson & Johnson

• Lonza Group Ltd.

• Merck & Co., Inc.

• Mylan N.V.

• Novartis AG

• Pfizer Inc.

• Reddy’s Laboratories Ltd.

• Sanofi

• STADA Arzneimittel AG

• Sun Pharmaceutical Industries Ltd.

• Teva Pharmaceutical Industries Ltd.

• Viatris Inc.

• Wuxi App Tec

Recent Developments:

January 8, 2024— By acquiring Ambrx, Johnson & Johnson will advance next-generation antibody drug conjugates that will revolutionize cancer treatment. Ambrx Biopharma, Inc., also known as Ambrx (NASDAQ: AMAM), is a clinical-stage biopharmaceutical company that has a proprietary synthetic biology technology platform to design and develop next-generation antibody drug conjugates (ADCs). Johnson & Johnson (NYSE: JNJ) announced today that it has reached a definitive agreement to acquire Ambrx Biopharma, Inc. in an all-cash merger transaction for a total equity value of approximately $2.0 billion, or $1.9 billion net of estimated cash acquired.

February 23, 2024 — The European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion today, recommending approval of Merck's anti-PD-1 therapy, KEYTRUDA, in combination with platinum-containing chemotherapy as a neoadjuvant treatment, followed by monotherapy as an adjuvant treatment, for the treatment of resectable non-small cell lung cancer (NSCLC) in adults with a high risk of recurrence. Merck is known as MSD outside of the United States and Canada.

Regional Analysis

Due to the growing frequency of genetic, cardiovascular, and other chronic illnesses as well as increased research in the field of medication development, the North American API market led with a 38.26% share in 2023. Growth is being favorably impacted by the presence of important firms including Fresenius Kabi AG, Pfizer Inc. (Pfizer Center One), AbbVie Inc., Curia, and Viatris Inc. For example, the FDA approved Viatris' Generic Restasis, a cyclosporine ophthalmic emulsion for the treatment of dry eye illness, in February 2022. The region has high-value manufacturing sectors that are anticipated to generate relative growth, such as gene treatments, biologicals, and complicated and very powerful APIs. Additionally, the area is witnessing a notable growth in innovators and CDMOs, which is expanding the advantage for API manufacture and commercialization.

China is the biggest manufacturer in the Asia Pacific API industry, which is expanding quickly. Major international corporations are setting up shop in the area, and increased efforts and investment are fueling expansion. Piramal Pharma Solutions is growing its capabilities in Telangana, while Aurobindo Pharma intends to finish a Penicillin G unit in India.

Segments Covered in the Active Pharmaceutical Ingredients Market Report

• Type of Synthesis Outlook (Revenue, USD Billion, 2024 - 2033)
  • Biotech
• Biotech APIs Market, By Type (Revenue, USD Billion, 2024 - 2033)
  • Generic APIs
  • Innovative APIs
• Biotech APIs Market, By Product (Revenue, USD Billion, 2024 - 2033)
  • Monoclonal Antibodies
  • Hormones
  • Cytokines
  • Recombinant Proteins
  • Therapeutic Enzymes
  • Vaccines
  • Blood Factors
• Synthetic
  • Synthetic APIs Market, By Type (Revenue, USD Billion, 2024 - 2033)
    • Generic APIs
    • Innovative APIs
  • Type of Manufacturer Outlook (Revenue, USD Billion, 2024 - 2033)
    • Captive APIs
    • Merchant APIs
  • Type Outlook (Revenue, USD Billion, 2024 - 2033)
    • Generic APIs
    • Innovative APIs
  • Application Outlook (Revenue, USD Billion, 2024 - 2033)
    • Cardiovascular Diseases
    • Oncology
    • CNS and Neurology
    • Orthopedic
    • Endocrinology
    • Pulmonology
    • Gastroenterology
    • Nephrology
    • Ophthalmology
    • Others
  • Type of Drug Outlook (Revenue, USD Billion, 2024 - 2033)
    • Prescription
    • OTC
  • Regional Outlook (Revenue, USD Billion, 2024 - 2033)
    • North America
    • Europe
    • Asia Pacific
    • Latin America
    • Middle East and Africa (MEA)