Active Pharmaceutical Ingredient Market 2023 – 2030 by Product (mAb, Hormones, Cytokines), Drug (OTC,Rx), Application (Diabetes, Oncology, CVD),Type (Innovative, Generic), Manufacturer (Captive, Merchant), Synthesis (Synthetic, Biotech) - Partner & Customer Ecosystem (Product Services, Proposition & Key Features) Competitive Index & Regional Footprints by MarketDigits
Industry : Healthcare | Pages : 171 Pages | Published On : Jul 2023
The global active pharmaceutical ingredient market was valued at $145.9 billion in 2023 and is projected to reach $216.4 billion by 2030, growing at a CAGR of 8.2% during the forecast period from 2023 to 2030. The latest research study analyzes industry trends, pricing analysis, patent analysis, conference and webinar materials, key stakeholders, and buying behavior in the market. Factors such as production capacity expansions by pharmaceutical and biopharmaceutical players, the growing importance of generics, and technological advancements in API manufacturing are driving the market growth. However, the market growth may be restrained by unfavorable drug price control policies in various countries and the increasing penetration of counterfeit drugs.
Market Dynamics of the Active Pharmaceutical Ingredient Market:
Driver: Focus on precision medicine
Precision medicine aims to tailor prevention and treatment strategies based on the individual's environment, genes, and life, leading to more accurate and targeted interventions.
The adoption of precision medicine is gaining recognition from clinicians, healthcare systems, pharmaceutical companies, patients, and governments, resulting in powerful discoveries and FDA-approved treatments customized to individuals.
The US government's All of Us research program, launched in 2018, aims to enroll a large number of volunteers and focus on breakthroughs in precision medicine. Additionally, the HHS Health Resources and Services Administration has provided funding to support community health centers' participation in the program.
Precision medicine, particularly in the field of oncology, is a prominent area of focus, aiming to achieve effective drug concentrations at the disease site while minimizing concentrations in the rest of the body.
Opportunity: Emerging biosimilars market
The increasing incidence of diseases, growing number of off-patent biologic drugs, positive outcomes in ongoing clinical trials for biosimilars, and rising demand for biosimilars in therapeutic applications such as rheumatoid arthritis and blood disorders are driving the growth of the biosimilars market.
Biosimilars, as generic versions of patented biologic drugs, offer cost-effectiveness compared to originator biologics as they don't need to comply with stringent regulatory requirements.
The expiration of patents and intellectual property rights for originator biologics in the coming years presents opportunities for biosimilars to enter the market.
Restraint: Unfavorable drug price control policies
Many countries have implemented controls on pharmaceutical prices, either directly or indirectly through reimbursement or profit restrictions. It is widely acknowledged that countries with stringent price regulations generally have lower drug prices compared to countries with looser or no regulation.
• Pharmaceutical drug prices have been gradually increasing worldwide in recent years. The United States, in particular, has an unregulated market for drug prices, while several other countries have implemented price controls to manage pharmaceutical spending. However, such regulations can negatively impact the revenue of pharmaceutical companies, leading to reduced investment in research and development (R&D) and fewer new molecular entities (NMEs) being developed annually.
• Price regulations on drug products directly impact the prices of active pharmaceutical ingredients (APIs) as well, considering the low bargaining power of API suppliers.
Challenge: Increasing penetration of counterfeit drugs
• Counterfeit drugs refer to medications that contain poor-quality or toxic ingredients and are often presented in incorrect dosage forms. According to the World Health Organization (WHO), approximately 10% of all medicines are counterfeit. In countries with better regulation and control over medicine supply, the incidence of falsified medicines is around 1%. However, in low- and middle-income countries, the prevalence of falsified medicines can reach as high as 50%.
• The increasing penetration of counterfeit drugs leads to revenue losses for genuine API manufacturers. The EU Intellectual Property Office (EUIPO) estimates that the European pharmaceutical industry loses nearly 7% in sales annually due to counterfeit drugs, amounting to USD 30.70 billion (EUR 26.9 billion). Additionally, approximately 7,100 jobs are lost each year in the region due to counterfeit and falsified medicines.
• The European Falsified Medicines Directive (FMD) aims to prevent falsified medicines from entering the legal supply chain in the European Union (EU). The EU focuses on strengthening safety measures and regulations in areas such as APIs, excipients, safety features of medicines, supply chain management, good distribution practices (GDPs), and online sales.
The prescription drugs segment is expected to account for the largest share of the active pharmaceutical ingredient industry.
The active pharmaceutical ingredient market can be categorized into two segments based on the type of drug: prescription drugs and over-the-counter (OTC) drugs. The prescription drugs segment holds the largest share in the API market. Since most drugs are available only with a doctor's prescription, the demand for APIs used in the manufacturing of prescription drugs is the highest. The increasing prevalence of innovative drugs also contributes to the growing demand for APIs in the prescription drug segment. Furthermore, government initiatives to make drugs more affordable and the rise of generics contribute to the larger market share of this segment.
The mammalian expression systems segment is projected to hold the largest market share in the biotech active pharmaceutical ingredient (API) industry.
Based on the type of expression system, biotech APIs can be categorized into mammalian expression systems, microbial expression systems, yeast expression systems, insect expression systems, and other expression systems. Among these, mammalian expression systems dominate the biotech APIs market due to their efficient protein folding and high level of post-translational modification. Additionally, mammalian expression systems are highly suitable for human use.
North America is expected to account for the largest size of active pharmaceutical ingredient industry during the forecast period.
Geographically, the API market is segmented into North America, Europe, Asia Pacific, and the Rest of the World (RoW). North America is the leading region, followed by Europe. The growth of the API market in North America is driven by several factors, including the presence of major pharmaceutical and biopharmaceutical manufacturing facilities, government focus on generic drugs, increasing demand for biologics and specialty drugs, and advancements in API manufacturing processes. This market segment is expected to experience moderate growth due to economic and healthcare severity measures, as well as the introduction of low-cost and generic versions of branded drugs.
Prominent players in the active pharmaceutical ingredient market include Pfizer, Inc. (US), Novartis AG (Switzerland), Sanofi (France), Boehringer Ingelheim (Germany), Bristol-Myers Squibb (US), Teva Pharmaceutical Industries Ltd. (Israel), Eli Lilly and Company (US), GlaxoSmithKline plc (UK), Merck & Co., Inc. (US), AbbVie Inc. (US), F. Hoffmann-La Roche Ltd. (Switzerland), and AstraZeneca plc (UK).
Pfizer holds a leading position in the market, primarily due to its extensive product portfolio and strong brand image. The company focuses on both organic and inorganic growth strategies such as agreements, partnerships, collaborations, product approvals, and acquisitions to maintain competitiveness and strengthen its market position.
Recent Developments in the Active Pharmaceutical Ingredient Industry
• In 2022, Pfizer collaborated with Acuitas to utilize a lipid nanoparticle delivery system in mRNA vaccines, including COMIRNATY (tozinameran) and therapeutics.
• In 2022, Sanofi and IGM announced a strategic collaboration agreement to enhance the development and commercialization of IgM antibody agonists for oncology, immunology, and inflammation targets.
• In 2022, Boehringer Ingelheim partnered with Mabgenesis to develop novel monoclonal antibodies for therapeutic treatments in canines.
• In 2021, Pfizer invested USD 68.5 million in a new state-of-the-art facility in Durham, NC, to further advance its gene therapy capabilities.
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