Pharmaceutical Fine Chemicals Market Overview
Advancements in technology, improvements in healthcare, and surge in geriatric population are the major factors driving the growth of the global pharmaceutical fine chemicals market. Fine chemicals, also referred to as specification chemicals, are pure and complex chemical substances manufactured in minor quantities through continuous and multi-step-batch chemical or biotechnological processes. In the report, the pharmaceutical fine chemicals market is segmented on the basis of type, application, product, and region.
Based on type, the pharmaceutical fine chemicals market is bifurcated into proprietary and non-proprietary categories. Majority of pharmaceutical fine chemicals manufactured globally are used as building blocks for proprietary products. Proprietary drugs are protected by patents and are characterized by a trade name. Manufacturers of these drugs exercise oligopoly in the market, as patents restrict the production rights to these companies only.
A non-proprietary or generic drug, on the other hand, is defined as a drug whose manufacturing does not require a license or whose patent has expired. Generic drugs are sold at a relatively lower price than their proprietary counterparts. Rising awareness regarding generic drugs coupled with the patent termination of a number of proprietary drugs is expected to benefit the pharmaceutical fine chemicals market during the forecast period. This can be attributed to the fact that patent expiration would allow other companies to manufacture generic and biosimilar drugs, which were otherwise patent protected.
Manufacturers in the pharmaceutical fine chemicals market are required to adhere to certain regulations specific to production. The key regulatory authorities are the U.S. Food and Drug Administration (FDA) and the China Food and Drug Administration (CFDA). These organizations are primarily responsible for formulating comprehensive supervision policies, controlling the use of chemicals for medication enrollment, establishing the criteria for drug advertising, and formulating essential medicines lists. Their European equivalent is the European Medicines Agency (EMEA), which is mainly responsible for the scientific assessment of medications created by pharmaceutical organizations for use in the European Union.
Pharmaceutical fine chemicals are widely used in cardiovascular, neurological, oncological, respiratory, gastrointestinal, and musculoskeletal applications. Cardiovascular application held a significant share in the pharmaceutical fine chemicals market historically. It involves the use of fine chemicals to manufacture medicines and drugs for the treatment of heart and blood vessel diseases. During the forecast period, the market is expected to witness high growth from cardiovascular application.
Based on product, the pharmaceutical fine chemicals market is categorized into basic building blocks, advanced intermediates, and active ingredients. Historically, the largest market share was held by active ingredients. Active ingredients are manufactured in in-house production lines or sourced from chemical manufacturers.
Based on region, the pharmaceutical fine chemicals market is categorized into North America, Europe, Asia-Pacific (APAC), Latin America, and the Middle East and Africa. Geographically, Europe and APAC are the leading producers of pharmaceutical fine chemicals.
According to a United Nations report titled World Population Ageing 2013, approximately 468.5 million people in Asia were aged 60 years or more in 2013, out of which approximately 57.5 million were aged 80 years or above. Thus, geriatric population makes for a large consumer base for pharmaceutical drugs, contributing to the growth of the pharmaceutical fine chemicals market. Other key factors supporting the market growth are the growing number of surgeries, increased consumer spending on healthcare, and improvements in healthcare infrastructure across the APAC region.
The regional market is also characterized by the presence of a large number of small players having in-house manufacturing capabilities, as compared to their western counterparts. However, in recent years, pharmaceutical fine chemical manufacturers in the APAC region have suffered a setback due to the strict regulations imposed by the western regulatory agencies on the export of certain drugs. Besides, the formidable advantages enjoyed by these manufacturers in the region, such as low labor and manufacturing costs, have been offset, due to the integration of advanced technologies in product lines.
Pharmaceutical Fine Chemicals Market Dynamics
The increasing demand for pharmaceutical and biopharmaceutical drugs is a major factor driving the growth of the pharmaceutical fine chemicals market, globally. In addition, the emergence of innovative drugs for the treatment of chronic diseases has supported the market growth.
Additionally, there is a high prevalence of neurological disorders due to factors such as genetics, lifestyle, infections, malnutrition, and brain injuries. In coherence, pharmaceutical companies are focusing on the development of products that target nerve imbalances in the body and try to restore normal neurological function. Various drugs have been developed in recent years, such as glutamate modulators, which can treat neurological disorders. Such developments are, thus, expected to warrant demand for pharmaceutical fine chemicals and drive their market growth during the forecast period.
The development of pharmaceutical chemicals and drugs involves significant capital and resource allocation. Furthermore, the process of drug development is complex due to factors such as in-depth research, clinical trials, compliance to regulations, and regulatory approvals. The whole process is time-consuming and demands heavy investments in addition to resource and labor costs, even before the market availability of the drugs. These factors, thus, inhibit the growth of the pharmaceutical fine chemicals market to some extent.
Pharmaceutical Fine Chemicals Market Competitive Landscape
Some of the major companies operating in the global pharmaceutical fine chemicals market are The Dow Chemical Company, Akzo Nobel N.V., Lonza Group Ltd., Royal DSM N.V., Eastman Chemical Company, Clariant AG, Boehringer Ingelheim GmbH, Albemarle Corporation, Sumitomo Chemical Co. Ltd., The Merck Group, and Lanxess Aktiengesellschaft.
Pharmaceutical fine chemical manufacturers have been adopting strategies such as product development, joint ventures, and acquisitions to increase their market penetration, obtain new technologies, and achieve integration across the value chain.
The study provides the historical as well the forecast market size data for various countries, including the U.S., Canada, France, Germany, the U.K., Italy, Spain, Japan, China, India, Brazil, Saudi Arabia, and South Africa.