Market Overview:

The Global Active Pharmaceutical Ingredients Market Size Was Valued At USD 222.4 Billion In 2022 And Is Expected To Reach At USD 351.84 Billion By 2030 With Compound Annual Growth Rate (CAGR) Of 5.90% From 2023 To 2030.

API stands for "active pharmaceutical ingredient." An API is a part of a drug that makes it work. Drugs are made up of different parts, the most important of which is the API. Excipients are usually the names of other ingredients, and these should not be harmful to living things. Formulation is the process of optimizing and putting together this mix of ingredients that is used in medicine. Few drugs have more than one active ingredient (API) that can be used to treat a wide range of symptoms. Local pharmaceutical companies have done most of the work to make APIs.

API stands for "active pharmaceutical ingredient." An API is a part of a drug that makes it work. Drugs are made up of different parts, the most important of which is the API. Excipients are usually the names of other ingredients, and these should not be harmful to living things. Formulation is the process of optimizing and putting together this mix of ingredients that is used in medicine. Few drugs have more than one active ingredient (API) that can be used to treat a wide range of symptoms. Local pharmaceutical companies have done most of the work to make APIs.

APIs and Excipients are two of the most important parts of a drug. API is the main part of the drug, while the excipient is a substance that isn't the drug but helps the body take it in. For example, lactose or mineral oil in a pill are excipients that help the body take in the drug. According to the ICH Q7, an API is "any substance or mixture of substances that is meant to be used in the manufacture of a drug product and that, when used in the manufacture of a drug, becomes an active ingredient in the drug product." These substances are meant to have pharmacological effects or other direct effects that help diagnose, treat, prevent, mitigate, or cure disease, or change the way the body looks and works. A "Drug Substance" is another name for an API.

These substances are made to have pharmacological effects or other direct effects that can help diagnose, cure, treat, lessen the effects of, or prevent disease. Some medicines are also made to work differently or to treat a wide range of symptoms by combining different APIs. This is called "combination therapy." Pharmaceutical companies have always made their products in their own countries, but this is changing because of the lower costs of making things in developing countries like China and India.

Every drug needs permission from the FDA before it can be tested on people or in a lab. Making active pharmaceutical ingredients is a very complicated process. Molecules that look simple need to go through a series of reactions, such as synthesis, to change their chemical structure in a certain way. This method for making APIs is hard and dangerous because it involves controlling high temperatures and pressures during reactions that use raw materials that can easily catch fire.

COVID-19 Impact:

Before the COVID-19 pandemic, the health care industry around the world was growing at a very fast rate. The 9th edition of the IDF Diabetes Atlas showed that the number of people with diabetes is rising all over the world. This report says that in 2019, about 463 million adults between the ages of 20 and 79 had diabetes. This number is expected to reach 643 million by the end of 2030 and 783 million by the end of 2045. Diabetes costs the health care system at least $966 billion, which is a 316% increase in the last 15 years. The World Malaria Report from the World Health Organization (WHO) says that 229 million people around the world got malaria in 2019. In 2019, there were about 215 million cases of malaria in the WHO African Region, which is about 94% of all cases. APIs like Hydroxychloroquine sulfate are used to treat rheumatoid arthritis and lupus by reducing inflammation. Many antimalarial drugs that are made from artemisinin use dihydroartemisinin as an intermediate step. So, even before the COVID-19 pandemic, the need for different active pharmaceutical ingredients was growing because diseases were becoming more common and the number of people who got sick was going up all over the world.

Market Dynamics:

Market Trends:

The pharmaceutical industry is growing quickly around the world. As a result, many countries have put in place strict rules to make sure that high-quality pharmaceutical ingredients are made. These rules have been set up to make the final product more likely to work well in the clinic. Because of rising overhead costs, many pharmaceutical companies no longer make APIs in-house. Instead, they outsource the process. This has led to a big increase in API production in the Asia-Pacific region, which is now seen as a cheaper alternative to production in the West.

Several manufacturers have strong footholds in China and India right now, which makes biopharmaceutical industries want to work with contract development and manufacturing organizations (CDMOs). For example, in August 2020, AGC Biologics, a global biopharmaceutical CDMO, announced a partnership with Ono Pharmaceutical Co., Ltd. to make new and innovative biopharmaceuticals during the clinical development stage. So, these companies have the technical know-how and skills to make a lot of API, which is expected to boost the growth of the active pharmaceutical ingredient market over the next few years.

Driving Factors:

• Focus on Precision Medicine

Precision medicine takes into account how each person's environment, genes, and way of life are different. With this method, it has become easier to predict how to prevent and treat a certain disease in a certain group of people. The approach makes sure that therapeutic or preventive interventions are given to patients in a way that helps them get the most out of them while keeping costs and problems to a minimum.

Precision medicine is getting more and more attention from doctors, hospitals, drug companies, patients, and governments. Advances in precision medicine have already led to important discoveries and a number of new treatments that have been approved by the FDA and are based on the unique characteristics of each person. Realizing the potential of precision medicine, the US government started the All of US research program in 2018 to recruit at least 1 million volunteers and oversample communities that haven't been studied enough. The main goal of the program is to make progress in the field of precision medicine. The Health Resources and Services Administration (HRSA) of the Department of Health and Human Services also gave USD 21 million to 46 community health centers to help them take part in the program.

The number of people with chronic diseases is rising quickly around the world because more and more people are living in cities and are becoming less active. Because of this, the market for therapeutic drugs is getting bigger and bigger. According to an analysis by the Indian Brand Equity Foundation (IBEF) in June 2021, the Indian pharmaceutical sector will meet over 50% of the global demand for several vaccines, 40% of the demand for U.S. generic brands, and 25% of the demand for all medicines in the U.K. Also, India's domestic pharmaceutical market is expected to grow to USD 42.0 billion in 2021 and USD 65.0 billion in 2024, according to the Indian Economical Survey.

• Robust Demand for Pharmaceutical Drugs

China's pharmaceutical industry is growing faster than any other industry, second only to India's. Because chronic diseases are becoming more complicated and there are more new cases of these diseases, there is more demand for new drugs, such as biological drugs. During the forecast period, the market is likely to grow because more people want biologics and biosimilars. Raw ingredients for pharmaceuticals that are used to make very advanced biopharmaceutical products are being brought in from developing countries at a much higher rate than before. During the next few years, the active pharmaceutical ingredient market is likely to grow because many pharmaceutical companies are putting more effort into research and development in order to bring new drugs to market.

Under the area of focus called "precision medicine," oncology is the best therapeutic area. The goal of clinical trials for these new drugs is to create drug concentrations that are effective at the site of the disease while keeping drug concentrations low in the rest of the body.

• Growing Prevalence of Chronic Disease to Fuel API Demand

The rise of infectious diseases and long-term illnesses around the world is likely to increase the demand for APIs, which are used to make new drugs. The Joint Research Center of the European Commission said in July 2020 that the number of new cancer cases and deaths in Europe had risen to 2.7 million and 1.3 million, respectively. Also, the WHO says that cardiovascular diseases killed more than 17.9 million people, which was 32.0% of all deaths worldwide. Statistics like this are likely to give multiple pharmaceutical and biotechnology industries opportunities to make dosage forms of new chemical entities for high-end therapy areas like oncology and cardiovascular diseases.

The rise in healthcare costs per person in developing countries and the rise in the number of people being diagnosed in these countries means that a lot of people need to be treated. This is expected to make even more people want to buy pharmaceutical drugs in the market for active pharmaceutical ingredients. In this market, the demand for generic and brand-name products will be driven by the demand for pharmaceuticals.

• Rising in Chronic Disease

It is expected that the rising number of chronic diseases will increase the need for pharmaceutical treatments, which will drive the growth of the market for active pharmaceutical components in the coming years. Also, some of the strategic things that are being done to keep the market stable are the introduction of new drugs and biological products, collaborations, acquisitions, and geographic expansions. The active pharmaceutical ingredient (API) market will also grow because of changes in medical technology, more efforts by public and private groups to raise awareness, and more money from the government. The market for active pharmaceutical ingredients (API) will also grow because people will have more money to spend, there will be more seizures, and people's lifestyles will change

Restraints/Challenges:

• Unfavorable Drug Price Control Policies

Most countries set prices for pharmaceuticals either directly (France and Italy) or indirectly (Germany and Japan) by putting limits on reimbursement or profits (UK). Most people agree that countries with strict price controls (like the UK) have lower drug prices than countries with less regulation (like the US) or none at all (US).

Over the past few years, the prices of pharmaceutical drugs have been slowly going up all over the world. The US is a big unregulated market when it comes to drug prices. Even so, drug prices have been regulated in a number of well-known countries. Several governments set price controls on pharmaceuticals to limit how much money is spent on them. But when prices of drugs are regulated in this way, drug companies lose money. This, in turn, led to less money being spent on research and development (R&D) and fewer new molecular entities (NMEs) being made each year.

Since API suppliers don't have much negotiating power, price controls on drug products will have a direct effect on the prices of API as well.

• Increasing Penetration of Counterfeit Drugs

Falsified or fake medicines use bad or poisonous ingredients in the wrong doses. The WHO says that about 10% of all medicines are fake. In countries with better laws and more control over the supply of medicines, around 1% of all medicines are said to be fake. In low- and middle-income countries, on the other hand, around 50% of medicines are fake.

API manufacturers are losing money because there are more and more fake drugs on the market. The EU Intellectual Property Office (EUIPO) says that fake drugs cause the EU pharmaceutical industry to lose about 7% of its sales every year, or about USD 30.70 billion (EUR 26.9 billion). Also, around 7,100 jobs are lost every year in the area because of fake or counterfeit medicines.

The European Falsified Medicines Directive (FMD) tries to stop fake medicines from getting into the legal supply chain in the European Union (EU). The EU focuses on strengthening safety and governing measures across Europe in areas like APIs and excipients, medicine safety features, the supply chain and good distribution practices (GDPs), and online sales.

• Unavailability of Appropriate Treatments

APIs cost a lot of money to make because they need to be made in a very systematic way. Because of this, many APIs are made by companies that specialize in this kind of work. Low-income and middle-income countries can't pay for it. So, more people in low- and middle-income countries in Africa, Asia-Pacific, and Latin America want cheaper alternatives.

Opportunities:

• Higher Adoption of Synthetic API

In the API process, some of the most important steps are drug synthesis and fermentation in more than one step, crystallization, drying, packing, purification, milling, labeling, and testing. A bulk-finished product may be a drug that has been made into an API. Also, because of safety concerns, regulatory agencies all over the world pay a lot of attention to the active pharmaceutical ingredients in children's medicines. Small molecule drugs are getting a lot of attention right now in many drug pipelines. The most regulatory approvals have been given to small-molecule drugs, and this trend is likely to continue in the coming years. The market is growing because of this.

• Increasing Demand of Highly Potent Active Pharmaceutical Ingredients

Highly potent active pharmaceutical ingredients, or HPAPIs, show a big change in the way drug companies make new medicines by using small molecules. Because of this, a line of effective drugs with lower doses has grown. The growing demand for HPAPIs can be traced back to their benefits, which include the need for a lower therapeutic dose, the ability to bind to specific receptors, and high efficiency. As the generic API industry gets more and more competitive, some API manufacturers are using HPAPIs to set themselves apart from the competition. This helps the growth of the market.

• Growing Research and Investment

Also, more research and development, as well as more spending by both public and private organizations, will open up new opportunities for the growth rate of the market. During the forecast period, the market for active pharmaceutical ingredients (API) will also have a lot of good chances to make money because of new treatments that work and ongoing clinical tests. The active pharmaceutical ingredient (API) market will grow faster in the future because there is still a lot of unmet demand for existing treatments and medical technology is getting better.

Strategic Development:

• In 2022 - Pfizer made a deal with Acuitas to get a lipid nanoparticle delivery system that could be used in mRNA vaccines like COMIRNATY ((tozinameran)) and other medicines.
• In 2022 - Sanofi and IGM signed a strategic collaboration agreement to make the development and sale of IgM antibody agonists for cancer, inflammation, and immunology easier and more effective.
• In 2022 - Boehringer Ingelheim and Mabgenesis worked together to make new monoclonal antibodies for treating dogs.
• In 2021 - Pfizer spent USD 68.5 million on a new, state-of-the-art facility in Durham, NC,. This was done to improve gene therapy even more.
• In December 2019 - Bortezomib for injection, which is a generic version of Velcade made by Millennium Pharmaceuticals, was put on the US market by Dr. Reddy's Laboratories. Bortezomib is used to treat adults who have had at least one other treatment for multiple myeloma or mantle cell lymphoma.
• In June 2022 - Merck's Life Science business doubled its ability to make high-potency active pharmaceutical ingredients. This was made possible by building a plant in the United States (HPAPI). This new CDMO facility was built to meet the need for important cancer treatments. It is 70,000 square feet and costs €59 million.
• In June 2022 - Natco Pharma went up 3.09% to Rs 713.45, after the company said it would sell the first generic Nexavar (Sorafenib) tablets on the US market. The medicine will be sold by Viatris, an international pharmaceutical company that works with Natco. Sorafenib is used to treat advanced cases of Renal Cell Carcinoma (RCC), Hepatocellular Carcinoma (HCC), and Differentiated Thyroid Carcinoma (DTC) that can't be removed. It is a multi-kinase inhibitor that can be taken by mouth and is used to treat advanced liver, thyroid, and kidney cell cancers.
• In July 2022 - Merck and Orion Corporation announced that they would work together to develop and sell Orion's experimental candidate ODM-208 and other drugs that target the enzyme cytochrome P450 11A1 (CYP11A1), which is important for making steroids. In a Phase 2 clinical trial, ODM-208, an oral, non-steroidal CYP11A1 inhibitor, is being tested as a way to treat people with metastatic castration-resistant prostate cancer (mCRPC).

Key Vendors:

Top market players are

• Novartis AG (Switzerland)

Novartis is rethinking how medicine works to make people's lives better and longer. As the world's largest pharmaceutical company, we use new science and digital technologies to make treatments that change the way people get sick. In our search for new medicines, we are always one of the top companies in the world that invests in research and development.

• Sanofi (France)

Sanofi is a company that works in health care. It finds, develops, makes, and sells a wide range of medicines and vaccines. It has medicines for treating cancer, rare diseases, and multiple sclerosis. It also has vaccines for humans that protect them from bacterial and viral diseases, as well as other products.

• Pfizer Inc. (U.S.)

Sanofi is a company that works in health care. It finds, develops, makes, and sells a wide range of medicines and vaccines. It has medicines for treating cancer, rare diseases, and multiple sclerosis. It also has vaccines for humans that protect them from bacterial and viral diseases, as well as other products.

• Johnson & Johnson Private Limited (U.S.)

Johnson & Johnson, Ltd. is a law firm that helps people and businesses in the State of Illinois with family law, criminal law, and business law. The firm started out with only two lawyers in 1979. Since then, it has grown into a sophisticated business with three offices in the Chicagoland area.

• Abbott (U.S.)

Abbott is a world leader in health care that helps people live their lives to the fullest at all stages. Our portfolio of life-changing technologies includes leading businesses and products in diagnostics, medical devices, nutrition, and branded generic medicines.

• Teva Pharmaceutical Industries Ltd. (Israel)

Teva Pharmaceuticals has been making medicines that help people live better lives for more than a hundred years. They want to be the world's leader in generic and specialty medicines, and we have a portfolio of 3,500 products in almost every therapeutic area to help us get there.

• Bausch Health Companies Inc. (Canada)

Bausch Health Companies Inc. (NYSE/TSX: BHC) is a global company that develops, makes, and sells a wide range of pharmaceutical, medical device, and over-the-counter products, mostly in the therapeutic areas of eye health, gastroenterology, and dermatology.

• UCB S.A. (Belgium)

UCB SA (UCB) is a biopharmaceutical company that works to find and create new medicines and treatments for a wide range of serious diseases. It tries to come up with products that can help treat conditions related to the nervous system and the immune system. The company sells Cimzia for ankylosing spondylitis, axial spondyloarthritis, Crohn's disease, and psoriatic arthritis, among other things.

• Sunovion Pharmaceuticals Inc. (U.S.)

Sunovion Pharmaceuticals Inc (Sunovion), which is a division of Sumitomo Dainippon Pharmaceutical Co Ltd, is a pharmaceutical company that focuses on research. It finds, makes, and sells medicines that are used to treat problems with the central nervous system and the lungs.

• Jazz Pharmaceuticals, Inc. (U.K.)

Jazz Pharmaceuticals plc is a global biopharmaceutical company whose goal is to find new ways to help patients and their families live better lives. They are working on making medicines that will help people with serious diseases, who often have few or no other options, live their lives more fully.

• AstraZeneca (U.K.)

AstraZeneca UK Ltd is a company that makes medicines. The company creates, makes, sells, and gives out medicines for diseases of the heart and metabolism, breathing problems, and stomach problems. People in United Kingdom can buy from AstraZeneca.

• GSK plc (U.K.)

GSK plc (GSK) is a health care company that makes, sells, and develops medicines, vaccines, and other health care products. It has medicines for HIV, respiratory, cancer, immuno-inflammation, anti-viral, central nervous system (CNS), metabolic, cardiovascular, urogenital, anti-bacterials, dermatology, and rare diseases.

Segmentation Analysis:

The market is segmented on the basis of type, synthesis, type of manufacturer, application and region.

By Type Outlook:

The market is split into generic API and branded API based on the type of API. In 2020, the branded API segment had the largest share of the active pharmaceutical ingredient market. Research and development (R&D) programs that spend a lot of money on coming up with new, cost-effective products push different companies to put out new drugs. High-potency ingredients and peptides, which are part of the new generation of ingredients, are being used more and more in therapy. This is expected to speed up the production of branded API. During the forecast period, the demand for branded APIs will also be boosted by the fast growth of biotech and pharmaceutical companies around the world.

Even so, as key drugs lose their patents and the pharmaceutical industry has gotten bigger, the demand for branded APIs has slowly gone down over the years. Because of this, the generic APIs segment is likely to grow quickly during the forecast period because the patents on branded drugs will have run out. The generic segment is likely to grow because of unmet clinical needs in developing countries, a rise in the use of over-the-counter drugs, and the lower cost of generic drugs.

• Generic API
• Branded API

By Synthesis:

The market is split into two groups based on the type of synthesis: synthetic and biological.

The market for Active Pharmaceutical Ingredients (API) is mostly driven by the synthetic API segment, which has lower production costs and lower raw material costs. The growth of this segment is also helped by how easy it is to make synthetic molecules. Pharmaceutical companies that want to make a lot of drugs can save money by using APIs that are made in a lab. Because of this, the pharmaceutical industry needs them a lot. The API market is expected to keep growing because more and more people want these ingredients.

The biological segment is expected to have a higher growth rate from 2021 to 2028. This is because there is more demand for biopharmaceuticals and more innovations in biologics are being made to meet the high unmet medical needs for many diseases. Also, the biological API segment is expected to be a very profitable one, which is why the big pharmaceutical and biopharmaceutical companies are interested in it. As the FDA approves more biological drugs, like vaccines, blood components, and recombinant proteins, the biological segment is likely to grow at a fast rate over the next few years.

• Biological API
• Synthetic API

By Type of Manufacturer:

In 2022, 51.5% of the total revenue came from the captive API segment. It is expected to grow at a fast rate in the next few years because raw materials are easy to get and big companies are putting a lot of money into building high-tech factories. Also, recent changes and moves by key players show that they are very focused on making things at home instead of sending them overseas. For example, in November 2019, Novartis announced that it was buying CellforCure, a CDMO based in France, so that it could make molecules in-house that it had been paying CellforCure to make. It is expected that these moves by key players will help the growth of the segment.

Big companies are trying to sell APIs to other drugmakers by using their production capabilities in Asian countries. Apart from the big players, the Indian government also wanted to give a boost to API manufacturing in India. For example, in March 2020, the government of India announced a $9.4 billion package for the bulk drug industry. This will help both domestic production and exports.

• Captive APIs
• Merchant APIs

By Application Outlook:

In 2022, the segment for cardiovascular diseases brought in the most money, 21.54%. This is because the number of target diseases is growing around the world. Several groups, like the World Heart Federation, the World Stroke Organization, and the Stroke Association, are working to raise awareness about cardiovascular diseases. Government programs like the National Cholesterol Education Program are meant to make people more aware of diseases caused by lipids and cholesterol. During the forecast period, the segment is expected to be driven by how common cardiovascular diseases are and how much more people know about them. This will increase demand for APIs for cardiology drugs.

During the forecast period, the oncology segment is expected to grow by 7.6%, which is a lot. Changes in lifestyle and the rising number of people with cancer are driving the market. Different metabolic disorders are becoming more common because people are becoming less active. In most countries, hormone imbalance is becoming a bigger problem. Some of these diseases are thyroid and sex hormone problems. A common API used to treat hypothyroidism is levothyroxine. There are different kinds of hormone therapy for women who have gone through menopause, men who are getting treatment for cancer, and children who need to grow up properly. The market is also expected to be driven by a rise in age-related problems that are caused by hormones.

Other diseases, like diabetic retinopathy and macular degeneration, are also becoming more common, which increases the need for medications that work well and don't cost too much. By 2030, more than 190 million people will have diabetic retinopathy. This is likely to increase the need for both generic drugs and APIs.

• Cardiovascular Diseases
• Oncology
• CNS and Neurology
• Orthopedic
• Endocrinology
• Pulmonology
• Gastroenterology
• Nephrology
• Ophthalmology
• Others

Regional Insights:

In 2022, 38.80% of the revenue came from North America, and this is expected to stay the case for the next few years. It's because cancer and other diseases caused by lifestyle choices are becoming more common. This drives research and development, which in turn boosts the market.

Asia Pacific is expected to have the highest CAGR of 7.1% over the next five years. The fact that economies like China and India, which the rest of the world relies on to make APIs at lower prices, are in the area is a plus. The market is expected to grow because more money is being spent on health care in the region.

During the period of the forecast, Europe is expected to grow a lot. The market is likely to be driven by more money for research and the presence of key market players in this region. Due to more investments, there are now more biopharmaceutical companies in Europe. For example, the biopharma industry raised USD 20 billion as an investment in 2018, which grew by 28% to USD 27.5 billion in 2019. Biopharmaceutical research and development is done by many of the world's most important companies in Europe.

• North America
• US
• Canada
• Mexico
• Rest of North America
• Europe
• Germany
• France
• Italy
• Spain
• UK
• Nordic Countries
• Denmark
• Finland
• Iceland
• Sweden
• Norway
• Benelux Union
• Belgium
• The Netherlands
• Luxembourg
• Rest of Europe
• Asia-Pacific
• Japan
• China
• India
• Australia
• South Korea
• Southeast Asia
• Indonesia
• Thailand
• Malaysia
• Singapore
• Rest of Southeast Asia
• Rest of Asia-Pacific
• The Middle East & Africa
• Saudi Arabia
• UAE
• Egypt
• South Africa
• Rest of the Middle East & Africa
• Latin America
• Brazil
• Argentina
• Rest of Latin America

Scope of Report:

Conclusion:

• The Active Pharmaceutical Ingredients (API) Market is analyzed in detail in terms of what makes it grow and what holds it back.
• The report gives a thorough analysis of the current market and estimates that will help the stakeholders take advantage of the market opportunities that are already there.
• The projections in the report are based on how the market is doing now and how much it could be worth in the future.
• An in-depth analysis of the global API market's key segments shows the types of API, drugs, manufacturers, and therapy areas.
• In the report, the Active Pharmaceutical Ingredients (API) market is looked at in detail by region.