Market Overview:

The Global Active Pharmaceutical Ingredient (API) market size was USD 197.42 Billion in 2023. The market is projected to grow from USD 210.05 Billion in 2024 to USD 345.03 Billion by 2032 at a CAGR of 6.4% over the forecast period.

The Active Pharmaceutical Ingredients (API) market globally assumes a core function in the pharmaceutical industry because it is the foundation of drug production. Basically, these are the active components within drugs that produce the desired therapeutic effects, making them essential both in generic drugs and also in brand-name drugs. The APIs are mainly in demand because of the increasingly chronic disorders in the population, such as cardiovascular diseases, cancers, and diabetes, alongside other disorders. Also, the world's population is aging and constantly living with medical conditions. As a result, the increased popularity in the use of biotechnology processes implies that APIs are not only gained through synthetic processes but also through biological ways, which produce biologics and biosimilars for targeted treatments of complex conditions.

Pharmaceutics has been engaging in more and more innovative work in APIs as the demand for precision medicine is increasing due to personalized treatment based on individual patient profiles. This has led to increased levels of high-potency APIs, those which provide and effect even at low doses, particularly in oncology and hormonal therapy. Finally, availability of OTC drugs has seen this demand for APIs in the Consumer Health sector go up.

As the outsourcing trend emerges, the pharmaceutical industry has been dramatically changed by companies outsourcing operations to CDMOs to reduce costs and simplify manufacturing processes. It drives further growth since the production of APIs by CDMOs is scalable and meets regulatory requirements and quality controls. Stringent regulatory guidelines and quality standards across different countries ensure that APIs are safe and effective, and compliance is therefore a critical factor in market participation.

In addition, innovation in API production processes has resulted from an increasing focus on green chemistry and sustainable manufacturing practices, which contribute to reducing environmental impact while enhancing efficiency. This fact bodes well for the global API market, which should continue to grow as demand for innovative medicines increases, manufacturing technology continues to advance, and healthcare needs expand worldwide.

Worldwide Prescription Drug & OTC Sales by Therapy Area for 2018 and Projections for 2024

Source: Company Publications, Primary Interviews, and IMIR Market Research Pvt. Ltd. Analysis

Market Dynamics  -Market Drivers

Rising Prevalence of Chronic Diseases

The growing worldwide incidence of chronic diseases such as cancer, heart disease, diabetes, and respiratory conditions is one of the main driving factors of the worldwide API market. Chronic diseases are becoming widespread around the world due to an aging population and changes in lifestyles. Specifically in the areas of diabetic treatment, cardiovascular treatments, and oncology, this increases the demand for APIs. With the growing need for innovative and effective therapies, the market is sure to receive a steady flow of small-molecule and biologic APIs.

Advancements in Biotechnology

Biotechnology technological advancement has driven a significant influence on API development, especially in the biologics market. Using these APIs in targeted drugs can now cure complicated diseases like cancer, autoimmune disorders, and uncommon genetic issues with greater precision. Overall, the market is witnessing a significant demand for biotech-based APIs, mainly due to the growth of biopharmaceuticals and biosimilars, supplemented by advancements in bioprocessing. Additionally, HPAPIs are gaining increased use and thus provide a basis for specific manufacturing procedures.

Key Findings:

• Dr Reddy's plans to invest Rs 700 crore (USD 84.7 million) in January 2024 to expand the manufacture of biosimilars and active pharmaceutical ingredients.
• On October 2023, Lonza announced the launch of a new filling line for the commercial supply of antibody-drug conjugates to its customers.
• Eli Lilly and Company have reached a deal with the Swiss contract manufacturer, CordenPharma, October 2023 to produce tirzepatide, the API for the company's diabetes therapy, Mounjaro.
• To further the oligonucleotide manufacturing business, EUROAPI stated at the start of August 2023 that it will buy BianoGMP for strengthening its CDMO capabilities in the rapidly enlarging field.

Market Opportunities

Growing Outsourcing to CDMOs

Contract development and manufacturing organizations (CDMOs) are outsourcing more and more production of APIs-a vital potential opportunity. Pharmaceutical companies increasingly seek to cut costs but focus on their core strengths: marketing and drug discovery. Especially for complex biologics and HPAPIs, CDMOs offer scalable solutions for API manufacturing with dedicated infrastructure and regulatory expertise. The collaboration can accelerate pharmaceutical companies' drug development processes while contributing to the growth of the API market as an entirety.

Expansion of Biosimilars Market

The growing demand and acceptance for biosimilars comprise a promising business opportunity in the realm of API. The expirations of patents of several blockbuster biologics are expected to increase the demand for biosimilars in the coming years. Due to their vast usage in these drugs, manufacturers now find an opportunity to ride the wave of the increasing market of bio similar products. Biologic APIs for these biologic treatments must be cost-effective in fulfilling this increased demand for affordable biologics treatment.

Market Restraining Factors

Stringent Regulatory Requirements

Strict regulation may somewhat stifle expansion in the API market. The regulatory agencies, such as EMA, the FDA, and so on, enforce stricter rules to ensure the safety, efficacy, and quality of APIs. Entry-level costs for significant investments in R&D, quality assurance, and manufacturing infrastructure to meet these regulations may keep up operating expenses and delay new product launches, especially for smaller market players.

High Manufacturing Costs of Biologic APIs

Products such as biologic APIs, especially HPAPIs are manufactured using procedures that are highly intricate and specialized. Due to the capital-intensive and complicated nature of infrastructure requirements for such procedures, the cost of production is significantly higher compared to traditional small-molecule APIs. In addition, the necessitating requirement for sophisticated containment facilities to manage strong APIs and stringent quality standards could increase the operating cost of manufacturers, further lowering their profitability.

Segmentation Analysis

The market scope is segmented because of by Type of Synthesis, by Drug Type, by Type of Manufacturer, by Molecule Type, by Therapeutic Application, by Potency Level, by Formulation, by End-User.

By Type of Synthesis

Based on the Type of Synthesis of the market is segmented into Synthetic APIs, Biotech/Biological APIs.

Synthetic APIs segment has traditionally dominated the global market for active pharmaceutical ingredients. Various factors are associated with this hegemony, and the foremost one is the fact that synthetic API manufacturing procedures have long been established. The majority of the frequently prescribed medications to treat chronic conditions such as diabetes, neurocognitive disorders, and cardiovascular illnesses contain synthetic APIs, which are synthesized chemically. Compared with biotech or biological APIs, synthetic APIs are more accessible to pharmaceutical businesses in terms of scalability, affordability, and comparatively simple production method.

Additionally, synthetic APIs are used by the vast majority of generics drugs, which are taking a large market share of global pharmaceuticals. The position in the market of synthetic APIs is further enhanced by the wide usage of generics, specifically in poor countries, where there is a high demand for low-cost therapies. Although biotech or biological APIs are increasingly gaining popularity especially in specialist therapeutic fields, such as autoimmune diseases and oncology, they are usually more expensive to manufacture and require complex production procedures. Synthetic APIs are the preferred choice because of lower infrastructure and experience requirements for the manufacture of biologics.

By Drug Type

Based on the Drug Type of the market is segmented into Innovative/Branded Prescription Drugs, Generic Prescription Drugs, Over-the-Counter (OTC) Drugs.

Active pharmaceutical ingredients have typically been the dominant product category in the overall global market for active pharmaceutical ingredients. This is mainly because more money is being spent on research and development (R&D) and new treatments that fill gaps in medicine are being developed, particularly for complicated illnesses like cancer, autoimmune diseases, and uncommon genetic problems. Prescription drugs are often branded products, which mean that pharmaceutical companies can charge higher prices and earn high profits because of patents. Generally, these products are outcomes of decades of research and development with clinical testing and approvals from regulatory agencies for them to market in the competition.

Also, the dominance of this market is influenced by the increasing need for biologics, precision medicine, and HPAPIs, which are most often developed as new pharmaceuticals. The development of targeted medicines that have better efficiency and fewer adverse effects is a growing priority for pharm companies, especially in areas like immunology and oncology. The higher demand for innovative therapies, as well as the premium cost guarantee that branded prescription medications continues to have a bigger portion of the API market.

Though the OTC and generic prescription medication markets are growing rapidly, especially with branded drug patents expiring shortly, new pharmaceuticals continue to enjoy a strong position in the API market due to their high value and clinical importance.

Regional Snapshots

By region, Insights into the markets in North America, Europe, Asia-Pacific, Latin America and MEA are provided by the study. North America has remained the market leader in the global Active Pharmaceutical Ingredients (API) market and holds a share that is significant, majorly contributed by the strong pharmaceutical industry coupled with advanced healthcare infrastructure as well as high investment in R&D.

The United States hosts most of the world's leading pharmaceutical companies and biotech firms, thereby contributing to the robust demand for APIs, especially innovative and biologic APIs. Furthermore, the region shows a high prevalence of chronic diseases like cancer, diabetes, and cardiovascular disorders, thus further bolstering the demand for both branded and generic APIs. The U.S. imposes strict regulatory standards. FDA also guarantees the production of quality APIs, making North America dominant in the market.

However, Asia-Pacific is expected to dominate the growth of the API market. Out sourcing of API manufacturing to countries like India and China that are cost-effective and have a skilled workforce is a primary factor. Increasing prevalence of chronic diseases, growing healthcare expenditures, and expansion in pharmaceutical manufacturing capabilities also drive growth in the region. Governments in countries like India also offer incentives to promote more API production at home and reduce import volumes. On this basis, the Asia-Pacific region should grow rapidly, backed by the ever-increasing role that this region is playing as a global hub for APIs.

List of Companies Profiled

• Cipla Inc.
• AbbVie Inc.
• Aurobindo Pharma
• Viatris Inc.
• Fresenius Kabi AG
• STADA Arzneimittel AG
• Abbott
• Amgen Inc.
• Biocon
• Mylan N.V.
• Sandoz International GmbH (Novartis AG)
• Reddy’s Laboratories Ltd.
• Sun Pharmaceutical Industries Ltd.
• Teva Pharmaceutical Industries Ltd.
• Boehringer Ingelheim International GmbH

Key Industry Developments

• In July 2023, Teva Pharmaceutical Industries Ltd. designed a new development plan that included the sale of its API division. The API manufacturing facility is valued at two billion dollars.
• In June 2023, the companies partnered with Lonza to assist in the production of Vertex's pipeline of fully differentiated, investigational stem cell-derived islet cell therapeutics for patients with type 1 diabetes.
• In June 2023, Lonza purchased Synaffix to expand its ADC service capability.
• In April 2023, Eli Lilly and Co announced plans to invest USD 1.6 billion in the US-based LEAP Innovation Park. It is said that the total investment for advanced APIs in products like genetic medicine stands at USD 3.7 billion.
• In March 2023, AGC Pharma Chemicals and CatSci Ltd in partnership with each other to design and manufacture innovative therapies.
• In February 2023, Lonza completed the construction of its facilities in Switzerland. The company increased the capacity of its High Potent Active Pharmaceutical Ingredients (HPAPI) manufacturing facility.
• In January 2023, Novartis sold its API manufacturing plant in Ringaskiddy, Ireland to Sterling Pharma Solutions.

Report Coverage

The report will cover the qualitative and quantitative data on the global Active Pharmaceutical Ingredients (API) Market. The qualitative data includes latest trends, market players analysis, market drivers, market opportunity, and many others. Also, the report quantitative data includes market size for every region, country, and segments according to your requirements. We can also provide customize report in every industry vertical.

Report Scope and Segmentations

Regional Analysis

North America accounted for the highest xx% market share in terms of revenue in the Active Pharmaceutical Ingredients (API) market and is expected to expand at a CAGR of xx% during the forecast period. This growth can be attributed to the growing adoption of Active Pharmaceutical Ingredients (API). The market in APAC is expected to witness significant growth and is expected to register a CAGR of xx% over upcoming years, because of the presence of key Active Pharmaceutical Ingredients (API) companies in economies such as Japan and China.

The objective of the report is to present comprehensive analysis of Global Active Pharmaceutical Ingredients (API) Market including all the stakeholders of the industry. The past and current status of the industry with forecasted market size and trends are presented in the report with the analysis of complicated data in simple language.

Active Pharmaceutical Ingredients (API) Market Report is also available for below Regions and Country Please Ask for that

North America

• U.S.
• Canada

Europe

• Switzerland
• Belgium
• Germany
• France
• U.K.
• Italy
• Spain
• Sweden
• Netherland
• Turkey
• Rest of Europe

Asia-Pacific

• India
• Australia
• Philippines
• Singapore
• South Korea
• Japan
• China
• Malaysia
• Thailand
• Indonesia
• Rest Of APAC

Latin America

• Mexico
• Argentina
• Peru
• Colombia
• Brazil
• Rest of South America

Middle East and Africa

• Saudi Arabia
• UAE
• Egypt
• South Africa
• Rest Of MEA

Points Covered in the Report

• The points that are discussed within the report are the major market players that are involved in the market such as market players, raw material suppliers, equipment suppliers, end users, traders, distributors and etc.
• The complete profile of the companies is mentioned. And the capacity, production, price, revenue, cost, gross, gross margin, sales volume, sales revenue, consumption, growth rate, import, export, supply, future strategies, and the technological developments that they are making are also included within the report. This report analysed 12 years data history and forecast.
• The growth factors of the market are discussed in detail wherein the different end users of the market are explained in detail.
• Data and information by market player, by region, by type, by application and etc., and custom research can be added according to specific requirements.
• The report contains the SWOT analysis of the market. Finally, the report contains the conclusion part where the opinions of the industrial experts are included.

Key Reasons to Purchase

• To gain insightful analyses of the Active Pharmaceutical Ingredients (API) market and have comprehensive understanding of the global market and its commercial landscape.
• Assess the production processes, major issues, and solutions to mitigate the development risk.
• To understand the most affecting driving and restraining forces in the market and its impact in the global market.
• Learn about the Active Pharmaceutical Ingredients (API) market strategies that are being adopted by leading respective organizations.
• To understand the future outlook and prospects for the Active Pharmaceutical Ingredients (API) market. Besides the standard structure reports, we also provide custom research according to specific requirements.

Research Scope of the Market

• Historic year: 2019-2022
• Base year: 2023
• Forecast: 2024 to 2032
• Representation of Market revenue in USD Billion