Active Pharmaceutical Ingredients Market by Manufacturing Type and Geography - Forecast Analysis 2021-2025

The active pharmaceutical ingredients (API) market share is expected to increase by USD 64.53 billion from 2020 to 2025, and the market's growth momentum will accelerate at a CAGR of 6.1%.

This API market research report provides valuable insights on the post-COVID-19 impact on the market, which will help companies evaluate their business approaches. Furthermore, this report extensively covers API market segmentations by manufacturing type (captive APIs and contract APIs) and geographic (APAC, North America, Europe, and ROW). The API market report also offers information on several market vendors, including Amneal Pharmaceuticals Inc., Cadila Healthcare Ltd., Dr. Reddy's Laboratories Ltd., GlaxoSmithKline Plc, Koninklijke DSM NV, Mylan NV, Novartis AG, Pfizer Inc., Sun Pharmaceutical Industries Ltd., and Teva Pharmaceutical Industries Ltd. among others.

What will the Active Pharmaceutical Ingredients (API) Market Size be During the Forecast Period?

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Active Pharmaceutical Ingredients (API) Market: Key Drivers, Trends, and Challenges

Based on our research output, there has been a neutral impact on the market growth during and post COVID-19 era. The evolving API manufacturing scenario in developing countries is notably driving the API market growth, although factors such as high investment costs and concern of huge financial loss may impede the market growth. Our research analysts have studied the historical data and deduced the key market drivers and the COVID-19 pandemic impact on the active pharmaceutical ingredients (API) industry. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.

Key Active Pharmaceutical Ingredients Market Driver

One of the key factors driving the API market growth is the evolving API manufacturing scenario in developing countries. Considering the presence of developed infrastructure and growing economic development, India and China have started producing high-quality APIs and drug intermediates for regulated markets. The strong preference for generic drugs compared with innovative or branded drugs is one of the factors fueling the US pharmaceutical market growth. On average, the manufacturing cost of APIs for generic oral solids, such as tablets and capsules, accounts for approximately 40%-50% of the production cost. In a highly competitive market, where the ability to offer a low price is vital, generic drug manufacturers seek competitive advantages by outsourcing bulk drug manufacturing activities to reliable API manufacturers in developing countries, who can deliver the APIs at a low cost. This is expected to drive the growth of the market during the forecast period.

Key Active Pharmaceutical Ingredients Market Trend

The increasing geriatric population is the major trend influencing the API market growth. The risk of acquiring or developing chronic illness in people increases with their age, which, in turn, propels the demand for various therapeutics for their treatment, consequently leading to an increase in demand for APIs. Comorbid conditions among geriatric people (aged 65 years and above) along with sleep, cognition, strength, and physical balance are the factors that negatively impact a person's ability to function properly and make disease management more difficult. The rise in the number of geriatric people increases the incidence of various chronic diseases, which leads public healthcare professionals to rely on medication regime management to maintain the geriatric people's quality of life. The availability of advanced healthcare infrastructure and the high disposable income of people also support the accessibility to technologically advanced diagnostic equipment, leading to increased diagnosis of age-related diseases in the susceptible patient population, thereby increasing patient adoption of different therapeutics.

Key Active Pharmaceutical Ingredients Market Challenge

High investment cost and concern of huge financial loss is one of the key challenges hindering the API market growth. The low-cost structure has led to more rapid and expansive growth in the Indian pharmaceutical ingredient market growth. Regulatory scrutiny of API manufacturers, particularly in Asia, remains very high; however, quality problems continue to persist, mainly due to the intensive API manufacturing in the region. An increase in the general WLs issued by the US FDA to API manufacturers has led these manufacturers to improve their API manufacturing facilities and adherence to the GMP protocol. This, in turn, requires an increased investment of time, labour, and continuous availability of funds to upgrade the manufacturing facilities as per the validated GMP protocol. Thus, making it difficult to achieve economies of scale by API manufacturers under such a stringent regulatory framework. Failure to adhere to the validated GMP protocol may restrict the entry of bulk actives into the regulated market, thus, exposing API manufacturers to huge financial losses. This discourages manufacturers from venturing into the API industry, thereby limiting the growth prospects of the global active pharmaceutical ingredients market.

This active pharmaceutical ingredient (API) market analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2021-2025.

Parent Market Analysis

Technavio categorizes the global API market as a part of the global pharmaceuticals market. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the active pharmaceutical ingredients market during the forecast period.

Who are the Major Active Pharmaceutical Ingredients (API) Market Vendors?

The report analyzes the market's competitive landscape and offers information on several market vendors, including:

• Amneal Pharmaceuticals Inc.
• Cadila Healthcare Ltd.
• Dr. Reddy's Laboratories Ltd.
• GlaxoSmithKline Plc
• Koninklijke DSM NV
• Mylan NV
• Novartis AG
• Pfizer Inc.
• Sun Pharmaceutical Industries Ltd.
• Teva Pharmaceutical Industries Ltd.

This statistical study of the API encompasses successful business strategies deployed by the key vendors. The active pharmaceutical ingredients market is fragmented and the vendors are deploying growth strategies such as investing heavily in R&D activities to compete in the market.

Product Insights and News

• Amneal Pharmaceuticals Inc. - The company performs captive manufacturing of APIs for its own finished pharmaceutical products.
• Amneal Pharmaceuticals Inc. - In July 2020, the company received the Abbreviated New Drug Application (ANDA) approval from the US FDA for a generic version of Fluphenazine Hydrochloride Tablets.

To make the most of the opportunities and recover from the post-COVID-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.

The active pharmaceutical ingredients market forecast report offers in-depth insights into key vendor profiles. The profiles include information on the production, sustainability, and prospects of the leading companies.

Active Pharmaceutical Ingredients (API) Market Value Chain Analysis

Our report provides extensive information on the value chain analysis for the API market, which vendors can leverage to gain a competitive advantage during the forecast period. The end-to-end understanding of the value chain is essential in profit margin optimization and evaluation of business strategies. The data available in our value chain analysis segment can help vendors drive costs and enhance customer services during the forecast period.

The report has further elucidated other innovative approaches being followed by manufacturers to ensure a sustainable market presence.

Which are the Key Regions for the Active Pharmaceutical Ingredients (API) Market?

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66% of the market's growth will originate from APAC during the forecast period. China, India, and Japan are the key markets for active pharmaceutical ingredients (API) in APAC. Market growth in this region will be faster than the growth of the market in other regions.

China accounts for the largest share in the active pharmaceutical ingredients market in APAC. The Chinese pharmaceutical industry mainly produces basic chemicals and APIs. The major reason for China's ability to capture the global API market is the cheap and cost-effective production of APIs, resulting from its large-scale manufacturing which will facilitate the active pharmaceutical ingredients market growth in APAC over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.

COVID Impact and Recovery Analysis

Due to the ongoing COVID-19 pandemic, the Directorate General of Foreign Trade (DGFT) made changes in its export policy on March 3, 2020, and banned several formulations. Later, on March 25, 2020, this export policy was changed again, and the 'wonder drug, hydroxychloroquine (which is considered in the treatment of COVID-19) too was included in the list. These changes were made in light of a shortage of API imports from the global market, especially from China, which is used in the manufacturing of these formulations.

What are the Revenue-generating Manufacturing Type Segments in the Active Pharmaceutical Ingredients (API) Market?

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The API market share growth by the captive APIs will be significant during the forecast period. The increased adoption of healthcare services has benefited the global active pharmaceutical ingredients market significantly. There is a huge focus on increasing the accessibility to affordable healthcare services, and this has led to increased demand for access to low-cost medicines, in turn inducing the demand for low-cost APIs for manufacturing finished drugs.

Besides the above-mentioned factors, the post-COVID-19 impact has brought forth a slowdown in or fast-tracked the demand for the service or product. This report provides an accurate prediction of the contribution of all the segments to the growth of the API market size and actionable market insights on the post-COVID-19 impact on each segment.

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What are the Key Data Covered in this Active Pharmaceutical Ingredients (API) Market Report?

• CAGR of the market during the forecast period 2021-2025
• Detailed information on factors that will drive API market growth during the next five years
• Precise estimation of the active pharmaceutical ingredients market size and its contribution to the parent market
• Accurate predictions on upcoming trends and changes in consumer behaviour
• The growth of the active pharmaceutical ingredients (API) industry across APAC, North America, Europe, and ROW
• A thorough analysis of the market's competitive landscape and detailed information on vendors
• Comprehensive details of factors that will challenge the growth of active pharmaceutical ingredients market vendors

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