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Active Pharmaceutical Ingredients Market Overview
The global active pharmaceutical ingredient (API) market is expected to witness robust growth in the coming years, as a result of the rise in the condensed new applications of drugs, expiration of patented biologics, and increase in the incidence of chronic and lifestyle-associated diseases, such as cancer, diabetes, and cardiovascular diseases, geriatric population, government initiatives to promote generic drugs, investments in biosimilars, healthcare expenditure, and awareness about diseases. APIs are those components of drugs, which are directly responsible for an effect on the human body.
Contract manufacturers and in-house manufacturers are the two types of companies producing APIs. Of these, in-house manufacturers have held the larger active pharmaceutical ingredients market share in the past. However, they face high cost of research and development (R&D) and reduced profits, which is why they are increasingly outsourcing the process. On account of this, contract manufacturers are predicted to observe rapid progress in the industry, in the coming years.
The two types of products available in the active pharmaceutical ingredients market are biological APIs and synthetic chemical APIs. Over-the-counter (OTC) drugs, generic prescription drugs, and branded or innovative prescription drugs are the various drugs APIs are used in. The ingredients are further utilized in central nervous system drugs, oncology drugs, musculoskeletal drugs, anti-diabetic drugs, non-steroidal anti-inflammatory drugs (NSAID), and cardiovascular drugs. Among these, oncology drugs are predicted to grow the fastest, on account of the increasing incidence of cancer.
Across the world, North America would be the most productive active pharmaceutical ingredients market in the near future, owing to the rising number of R&D activities in the area of drugs. The highest CAGR would be experienced by Asia-Pacific (APAC), as the patient pool here is quite large, healthcare expenditure is surging, and a number of companies manufacturing generic drugs exist. Additionally, an increasing number of people are becoming aware about the various lifestyle-associated diseases, which is further driving the industry progress in the region.
Active Pharmaceutical Ingredients Market Dynamics
One of the key active pharmaceutical ingredients market drivers is the growth in the geriatric population. As per the latest World Population Ageing report by the United Nations Department for Economic and Social Affairs (UN DESA), people above the age of 65 will grow in number from 703 million in 2019 to almost 1.5 billion in 2050. The elderly fall sick more often, which raises the requirement for various types of medication. Therefore, to cater to the increasing demand for drugs, to treat different diseases and disorders in the elderly, the consumption of APIs is also surging.
Another reason behind the swift active pharmaceutical ingredients market growth is the rising prevalence of chronic diseases, primarily cardiovascular diseases (CVD), diabetes, and cancer. The World Health Organization (WHO) considers CVDs the world’s largest killer, considering its annual mortality of 17.9 million. Similarly, cancer is responsible for one in every six deaths every year, and it killed 9.6 million people in 2018, as per the WHO. In the case of diabetes, the incidence grew almost four times, to 422 million in 2014 from 208 million in 2008. The management of all these diseases involves regular medication, thereby driving the sale of APIs.
Active Pharmaceutical Ingredients Market Competitive Landscape
The major players in the global active pharmaceutical ingredients market are Dr. Reddy’s Laboratories, Teva Pharmaceutical Industries Ltd., Hospira Inc., Actavis Plc, Lonza Group, Boehringer Ingelheim Group, Novartis International AG, Cambrex Corporation, Pfizer Inc., BASF SE, Watson Pharmaceutical Inc., Mylan Inc., and WuXi Apptec. In recent years, many of them have taken measures such as geographical expansions, product launches, partnerships and collaborations, and mergers and acquisitions, to increase their brand value, expand their customer reach, and better their position in the competition.