The rising geriatric population, increasing incidence of chronic diseases, and growing importance of generics are the major growth drivers for the active pharmaceutical ingredient (API) market. Due to the aforementioned factors, the industry is projected to generate $357,005.7 million revenue by 2030, advancing at a CAGR of 6.9% during the forecast period (2021–2030).
COVID-19 virus has spread globally, with people traveling more frequently, living in more-densely populated areas, and coming into contact with infected people. In addition, the major burden has fallen on the healthcare sector and related infrastructure, even in the most-developed countries with advanced healthcare systems. The pandemic led to the closure of several factories, particularly in China, which produce basic raw materials and APIs for drugs. This had initially negatively impacted the import, export, manufacturing, and distribution of drugs and APIs, worldwide. However, with the lifting of the lockdowns and opening of international airports and ports, there has been a surge in the production and supply of APIs from large exporters around the world to different locations.
The active pharmaceutical ingredient market is categorized into captive and merchant, on the basis of manufacturer. Of these, the captive manufacturers dominated the market during the historical period (2015–2020), and the category is expected to retain its dominance during the forecast period as well. Companies are increasingly outsourcing manufacturing processes to enhance production of finished products, reduce high cost of research and development (R&D), and improve profits.
Moreover, the active pharmaceutical ingredient market is categorized into generic APIs and innovative APIs, on the basis of type. Out of these, the innovative APIs category held larger market share in 2020, and it is also expected to retain its position in the upcoming years. The increase in R&D initiatives by companies for innovative APIs, favorable government regulations, and launch of novel and more-effective medicines are the key factors contributing to the growth of the market in this category.
Geographically, North America was the largest contributor to the active pharmaceutical ingredient market in 2020. This is mainly attributed to the surging incidence of chronic diseases, increasing government focus on generic drugs, rising demand for biologics and specialty drugs, and technological advancements in manufacturing processes of APIs, in the region.
Players in the API industry have been involved in collaborations and partnerships to remain competitive in the market. For instance, in July 2021, Pfizer Inc. and Arvinas Inc. collaborated to develop and commercialize PROTAC estrogen receptor protein degrader ARV-471. Under this agreement, the latter company would receive $650 million in an upfront payment, as well as a potential $1.4 billion in milestone payments, and the profits and costs would be shared 50/50 worldwide.
Similarly, in June 2021, Teva Pharmaceutical Industries Ltd. and Bioeq AG collaborated for commercializing the biosimilar candidate of ophthalmology drug Lucentis (ranibizumab) in Europe, Canada, Israel, and numerous other countries. Teva's long-standing commercial presence, expansive distribution network, and broad-reaching sales and marketing activities across Europe and international markets have now been combined with Bioeq's capabilities in the development of biosimilar drugs for highly regulated countries with stringent quality standards.
The major players operating in the API market are Cipla Ltd., Dr. Reddy’s Laboratories Ltd., Teva Pharmaceutical Industries Limited, Aurobindo Pharma Limited, Novartis AG, Pfizer Inc., Bristol-Myers Squibb Company, Glenmark Life Sciences Limited, Johnson & Johnson, Merck & Co. Inc., AbbVie Inc., Eli Lilly and Company, GlaxoSmithKline plc, Sanofi, Takeda Pharmaceutical Company Limited, Amneal Pharmaceuticals Inc., AstraZeneca plc, Sun Pharmaceutical Industries Ltd., Alkem Laboratories Limited, Mylan N.V., Lupin Limited, STADA Arzneimittel AG, Mallinckrodt plc, and MSN Laboratories Pvt. Ltd.