The global Active Pharmaceutical Ingredient (API) market is estimated to be valued at US$ 206.0 billion in 2021 and is expected to exhibit a CAGR of 6.8% over the forecast period of 2021-2028, as highlighted in a new report published by Coherent Market Insights.
A) Market Overview:
- The active pharmaceutical ingredient (API) market refers to the chemicals that are responsible for the therapeutic effects of drugs. APIs are the key component of pharmaceutical formulations and play a vital role in the effectiveness and safety of medications. These ingredients are primarily used in the production of generic drugs, which are affordable alternatives to branded drugs. The increasing demand for generic drugs, driven by rising healthcare costs and patent expirations of branded drugs, is expected to fuel the growth of the API market. APIs offer several advantages, including improved bioavailability, targeted drug delivery, and cost-effectiveness.
B) Market Key Trends:
- One key trend in the Active Pharmaceutical Ingredient (API) Market is the increasing focus on research and development activities by pharmaceutical companies. With the growing demand for innovative medicines and personalized healthcare, pharmaceutical manufacturers are investing in R&D to develop new and improved APIs. For example, Lonza Group recently expanded its R&D capabilities with the acquisition of a clinical-stage biopharmaceutical company to enhance its API portfolio. This trend is driven by the need to develop APIs with enhanced therapeutic efficacy and reduced side effects.
C) PEST Analysis:
- Political: Government regulations and policies regarding drug manufacturing and patent protection can significantly impact the API market.
- Economic: The economic conditions of a country or region, including GDP growth, inflation rates, and healthcare expenditure, can influence the demand for APIs.
- Social: Increasing healthcare expenditure, rising prevalence of chronic diseases, and growing geriatric population are social factors driving the demand for APIs.
- Technological: Advancements in manufacturing technologies, such as continuous manufacturing and nanotechnology, are revolutionizing the API production process and improving the quality of drugs.
D) Key Takeaways:
- The global API market is expected to witness high growth, exhibiting a CAGR of 6.8% over the forecast period, owing to increasing demand for generic drugs. Generic drugs are cost-effective alternatives to branded drugs and are in high demand globally.
- In terms of regional analysis, North America is expected to dominate the API market due to the presence of a well-established pharmaceutical industry, increasing healthcare expenditure, and favorable government policies. However, the Asia-Pacific region is expected to grow at the fastest pace, driven by the rising demand for generic drugs, increasing investments in healthcare infrastructure, and growing pharmaceutical manufacturing capabilities in countries like India and China.
- Key players operating in the global API market are Reddy’s Laboratories Ltd., Novartis AG, Mylan N.V., Amneal Pharmaceuticals LLC, Lonza Group, Lupin Limited, Fresenius Kabi, Hikma Pharmaceuticals, Cipla Limited, Glenmark Pharmaceuticals Limited, Sun Pharmaceutical Industries Ltd., Endo International Plc, Aurobindo Pharma Limited, Apotex Inc, Taro Pharmaceutical Industries Ltd, Stada Arzneimittel AG, Krka Pharmaceuticals, CordenPharma International, Evonik Industries AG, and Biological E. Limited. These companies are focusing on strategic collaborations, mergers and acquisitions, and research and development activities to strengthen their market position and expand their product portfolios.
In conclusion, the global API market is expected to witness significant growth due to the increasing demand for generic drugs. The market is driven by factors such as rising healthcare costs and patent expirations of branded drugs. Pharmaceutical companies are investing in R&D to develop advanced APIs, and technological advancements are shaping the future of API manufacturing. North America is expected to dominate the market, while the Asia-Pacific region presents lucrative opportunities for growth. The key players in the market are actively engaged in strategies to enhance their market presence and meet the growing demand for APIs.