The global active pharmaceutical ingredient (API) market size was valued at USD 217.22 billion in 2023, driven by the increasing prevalence of diseases across the globe. The market is expected to grow at a compound annual growth rate (CAGR) of 5.5% during the forecast period of 2024-2032, reaching a projected value of USD 351.71 billion by 2032. In this blog post, we will explore key aspects of the API market, including segments, trends, outlook, growth, and the impact of COVID-19, as well as delve into the key players and frequently asked questions related to this industry.
What are Active Pharmaceutical Ingredients (APIs)?
Active pharmaceutical ingredients (APIs) are the key components responsible for the therapeutic effect of a drug. An API is a biologically active compound that produces the intended effects once administered to patients. APIs can be derived from various sources, including plants, animals, microorganisms, or through chemical synthesis. These compounds are formulated into medicines, including tablets, injections, ointments, and other forms.
The API market encompasses the production and sale of both branded and generic API products. It is influenced by numerous factors such as technological advancements in manufacturing, rising demand for pharmaceuticals, increasing healthcare expenditure, and the evolving regulatory landscape.
Key Players in the Active Pharmaceutical Ingredient Market
Several prominent companies dominate the global API market. These players are key contributors to the growth and innovation in the sector. Some of the leading names in the market include:
Novartis AG (Switzerland)
Novartis is a global leader in the development and manufacturing of APIs. It is involved in the production of a wide range of active ingredients used in the treatment of diseases such as cancer, heart conditions, and neurological disorders.BASF SE (Germany)
BASF is a global chemical company that manufactures a wide array of APIs, including those used for cardiovascular diseases, anti-infectives, and pain management. The company is also focusing on the development of sustainable and cost-efficient API production methods.Teva Pharmaceutical Industries Ltd. (Israel)
Teva is one of the largest generic pharmaceutical companies globally. The company offers a comprehensive portfolio of APIs for both branded and generic drugs, particularly in the areas of central nervous system (CNS) disorders, oncology, and cardiovascular diseases.Lonza Group (Switzerland)
Lonza is known for its high-quality biopharmaceutical manufacturing capabilities. The company focuses on the production of complex biologic APIs, including monoclonal antibodies and vaccines, for global pharmaceutical markets.Dr. Reddy’s Laboratories Ltd. (India)
Dr. Reddy's is a prominent player in the global API market, particularly in the generic pharmaceutical sector. The company produces a variety of APIs, including those for oncology, cardiovascular, and gastrointestinal conditions.Aurobindo Pharma Ltd. (India)
Aurobindo Pharma is another key player in the global API market. The company manufactures APIs for a wide range of therapeutic areas, including anti-infectives, cardiology, and psychiatry.
Get a Free Sample Report with Table of Contents: https://www.expertmarketresearch.com/reports/active-pharmaceutical-ingredients-market/requestsample
Market Segmentation
The global API market can be segmented into various categories based on synthesis method, type, and application. Understanding these segments is crucial for grasping the market’s dynamics and growth potential.
1. By Type of API:
Synthetic APIs:
Synthetic APIs are chemically synthesized and represent the largest share of the market. These APIs are widely used in the production of generic medicines due to their lower cost and ability to be mass-produced.Biologics APIs:
Biologics APIs, derived from living organisms, are increasingly gaining popularity due to their effectiveness in treating complex diseases like cancer, autoimmune disorders, and diabetes. Biologic APIs require more advanced manufacturing techniques and facilities.
2. By Synthesis Method:
Chemical Synthesis:
This is the traditional method for producing APIs, particularly synthetic ones. Chemical synthesis involves creating APIs through chemical reactions and processes.Biotechnological Synthesis:
Biotechnology-based synthesis is commonly used for biologic APIs and involves techniques such as fermentation, recombinant DNA technology, and cell culture. This process is typically more complex but provides high-quality products for specific therapies.
3. By Application:
Cardiovascular Diseases:
APIs used for the treatment of heart diseases are among the most significant drivers of the API market, given the high prevalence of cardiovascular conditions globally.Oncology:
Cancer treatments require highly potent APIs, which have become a major segment within the market, especially with the increasing number of oncology patients.Neurological Disorders:
The rising prevalence of neurological conditions such as epilepsy, Parkinson’s disease, and Alzheimer’s has spurred the demand for APIs in this segment.Anti-Infective:
APIs for antibiotics and antifungal agents are highly demanded due to the ongoing fight against infectious diseases, including drug-resistant strains of bacteria.Others:
This category includes a broad range of therapeutic areas such as diabetes, gastrointestinal disorders, and respiratory conditions.
Outlook and Trends in the API Market
The outlook for the API market is positive, with substantial growth anticipated over the next decade. A variety of factors are contributing to this growth:
1. Increasing Demand for Generic Drugs:
The ongoing shift towards generic medications is one of the most significant trends in the API market. Generic drugs are more affordable, and with the expiration of patents for many blockbuster drugs, generic APIs are in high demand, especially in developing markets.
2. Technological Advancements in API Production:
Advancements in manufacturing technologies, such as continuous flow processes and precision fermentation, are improving the efficiency and scalability of API production. These innovations are making API production more cost-effective and helping meet the rising demand for high-quality drugs.
3. Growing Focus on Biologic Drugs:
As biologic drugs continue to gain popularity, particularly in the treatment of cancer and autoimmune diseases, the demand for biologic APIs is expected to grow. Biologics offer targeted therapies with fewer side effects compared to traditional synthetic drugs, making them a preferred choice in certain therapeutic areas.
4. Rise in Chronic Diseases and Ageing Populations:
The global rise in chronic diseases, coupled with an ageing population, is a significant driver for the API market. Conditions such as diabetes, cancer, and cardiovascular diseases require ongoing treatment, which increases the demand for APIs used in these therapeutic areas.
5. Outsourcing of API Manufacturing:
Many pharmaceutical companies are increasingly outsourcing the production of APIs to contract manufacturing organisations (CMOs). This trend allows companies to focus on their core competencies while leveraging the expertise and cost efficiencies offered by specialised manufacturers.
6. Regulatory Compliance and Quality Standards:
The stringent regulatory frameworks around API production ensure that companies must comply with high-quality standards. Regulatory bodies like the US FDA, European Medicines Agency (EMA), and others play a crucial role in maintaining the safety and efficacy of APIs, thereby boosting consumer trust and market growth.
Market Size and Growth Prospects
The global active pharmaceutical ingredient market was valued at USD 217.22 billion in 2023, and it is expected to reach USD 351.71 billion by 2032, growing at a CAGR of 5.5% from 2024 to 2032. Several factors contribute to this growth:
- Rising healthcare expenditure across emerging economies such as India, China, and Brazil is expected to drive demand for APIs.
- The increasing number of pharmaceutical innovations, particularly in biologics and personalized medicine, is also expected to contribute to market expansion.
Impact of COVID-19 on the API Market
The COVID-19 pandemic had a mixed impact on the API market. While the global demand for certain APIs, particularly those used for respiratory and antiviral treatments, spiked during the early phases of the pandemic, the overall supply chain faced significant disruptions. Lockdowns and restrictions in major manufacturing hubs, particularly in China and India, caused delays and shortages in API production. However, the pandemic has highlighted the need for increased investment in local and regional API production to reduce dependence on global supply chains.
COVID-19 Impact on API Sourcing:
The pandemic underscored the risks of over-reliance on a few countries for the supply of critical APIs, especially China and India. There has been a growing shift towards reshoring API production to other regions, including Europe and North America, to ensure more secure supply chains.
Frequently Asked Questions (FAQs)
1. What is the role of an API in a drug?
An API is the active component in a pharmaceutical drug that produces the desired therapeutic effect. It is responsible for treating or preventing the disease for which the drug is prescribed.
2. What are the major challenges in API manufacturing?
Challenges in API manufacturing include stringent regulatory requirements, cost of raw materials, and ensuring high-quality standards. Additionally, the growing complexity of biologic APIs adds to the production difficulty.
3. How are APIs classified?
APIs are typically classified based on their synthesis method (chemical or biotechnological) and their therapeutic application (e.g., cardiovascular, oncology, anti-infective).
4. What is the future outlook for the API market?
The API market is expected to grow significantly due to the increasing demand for generic drugs, technological advancements in manufacturing, and the rise of biologic therapies.
5. Which countries are the largest consumers of APIs?
The largest consumers of APIs are the United States, China, India, Japan, and Germany. These countries have significant pharmaceutical markets and manufacturing capabilities.
6. How does COVID-19 affect the API supply chain?
COVID-19 caused disruptions in global supply chains, leading to API shortages, particularly from China and India. However, it also accelerated efforts to diversify and regionalise API production to ensure more resilient supply chains.
Market Share and Size
The global active pharmaceutical ingredient market is witnessing substantial growth, with several companies expanding their presence in both developed and emerging markets. The share of generic APIs is growing rapidly, driven by patent expirations and the increased demand for affordable healthcare options. The market size is expected to continue expanding due to the factors mentioned above, including technological advancements, outsourcing trends, and a rising prevalence of chronic diseases.
Related Trending Reports
