Pharmaceutical excipients market by Type, Product, and Geography - Forecast and Analysis 2023-2027

Pharmaceutical Excipients Market Forecast 2023-2027

The pharmaceutical excipients market is forecast to increase by USD 3.83 billion at a CAGR of 6.54% between 2022 and 2027. The market is witnessing positive growth driven by several key factors. Firstly, there is a rising demand for functional excipients, driven by the need for enhanced drug delivery systems and improved therapeutic outcomes. Additionally, the pharmaceutical industry is experiencing steady growth, fueled by factors such as increasing healthcare expenditure, growing prevalence of chronic diseases, and aging populations. Moreover, advancements in techniques used to produce excipients, such as innovative manufacturing processes and novel formulation technologies, are contributing to market expansion by enabling the development of excipients with improved performance and functionality. This market research and growth report also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report consists of historic market data from 2017 to 2021.

What will be the size of the Pharmaceutical Excipients Market During the Forecast Period?

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The market is driven by several key factors, including the rigorous approval process mandated by regulatory agencies such as the USFDA. Excipient manufacturers are focusing on developing co-processed multifunctional excipients to enhance functionality and formulation properties across various segments, including oral formulations like tablets and capsules, liquid formulations, topical formulations, and parenteral formulations. They play critical roles as lubricants, glidants, fillers, diluents, and suspending agents, ensuring the quality, stability, and efficacy of pharmaceutical products. As the pharmaceutical industry continues to innovate, the demand for excipients with enhanced functionality and compliance with regulatory standards is expected to grow, driving the expansion of the global pmarket.

Market Dynamics and Customer Landscape

The market is experiencing significant growth driven by factors like R&D investments, patient-centric formulations, and collaborations. Development costs are being optimized through the use of generic drugs and novel excipients. Regulatory agencies like the FDA (Food and Drug Administration) and European Medicines Agency (EMA) ensure regulatory stringency in the approval process. Excipient manufacturers are focusing on customized solutions, including co-processed multifunctional excipients with enhanced functionality. The market caters to various formulation types such as tablets, capsules, liquid formulations, and topical formulations, offering a wide range of products like lubricants and glidants, fillers, diluents, and coating agents to meet diverse formulation properties. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The increasing demand for functional excipients is notably driving market growth. Functional excipients form an inherent part of the pharmaceutical industry. Due to their use in advanced drug delivery, the demand is anticipated to increase rapidly during the forecast period. Few companies, with the help of the latest technologies, are focusing on innovations in these excipient categories, also keeping standards and current good manufacturing practices in mind.

Several new compositions of ingredients in certain generic drugs are emerging in the market. The evolution of these drugs, specifically in the form of oral dispersible tablets, is aiding in controlled release and ease of consumption. In the future, nanotechnology and biotechnology will likely help in modifying the field. Functional excipients are preferred in developed markets, while pharmaceutical manufacturers in emerging markets are inclined to use low-cost alternatives. Moreover, new and multifunctional excipients are anticipated to emerge in the market in the coming years. Hence, this will drive the growth of the market during the forecast period.

Significant Market Trends

Demand for new excipients to develop easily consumable drugs is an emerging trend in the market. The global market is significantly driven by the increasing demand for drugs that can be consumed orally. The need to produce drugs that can be swallowed easily, primarily to enhance patient comfort, especially for older people and infants, plays a major role in pushing drug manufacturers to produce easily consumable tablets. This factor, in turn, is fueling the development of new excipients in the pharmaceutical industry. The demand for novel excipients, new chemically modified grade excipients, existing excipients with diverse routes of administration, and co-processed excipients is also increasing. They enhance the scope for the creation of new formulations and drug delivery systems.

Owing to the increasing demand for pharmaceutical drugs, such as generic drugs, the demand for pharmaceutical excipients is increasing. To meet the growing demand for pharmaceutical drugs, pharmaceutical companies are investing in the establishment or expansion of manufacturing units. Therefore, owing to such factors the global market will grow during the forecast period.

Major Market Challenge

Decreasing R&D expenditures is a major challenge impeding market growth. R&D efforts play a vital role in the development of any industry, and the global market in focus is no exception. However, the R&D investments in the market are declining at present, which will have a negative impact on the growth of the market over the next five years. For instance, Allergan Plc observed a decline in expenditure on R&D from 2018 to 2019. The company spent USD 2,266.20 million in 2018, whereas it spent about USD 1,812 million in 2019. The declining R&D expenditures will make it difficult for new manufacturing facilities to get approved. 

There are many difficulties and uncertainties inherent in pharmaceutical R&D, and there is a high rate of failure inherent in new drug discovery and development. The high rate of failure inherent in the R&D process of new products results in a significant risk that funds invested by the company in R&D will not generate financial returns. Hence, a decline in investments in R&D is observed by pharmaceutical companies, which can confine the growth of the global market during the forecast period.

Customer Landscape

The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Customer Landscape

Who are the Major Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Colorcon Inc. - The company operates under one segment. The company under this segment focuses on the development, supply and technical support of formulated film coating systems, modified release technologies, and functional excipients for the pharmaceutical and nutritional industries. The key offerings of the company include pharmaceutical excipients product solutions. 

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Air Liquide SA
• Associated British Foods Plc
• Avantor Inc.
• BASF SE
• Croda International Plc
• DFE Pharma GmbH and Co. KG
• Dow Inc.
• Evonik Industries AG
• Innophos Holdings Inc.
• J M Huber Corp.
• JRS PHARMA GmbH and Co. KG
• Kerry Group Plc
• Merck and Co. Inc.
• Roquette Freres SA
• Wacker Chemie AG

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Segmentation

This report extensively covers market segmentation by type (organic and inorganic), product (binders and fillers, coating agents, disintegrants, and others), and geography (North America, Europe, APAC, South America, and Middle East and Africa). In the market, patient-centric formulations are driving R&D investments for novel excipients. Customized excipient solutions address specific needs, but development costs and regulatory stringency are challenges. Regulatory bodies such as the Food and Drug Administration (FDA) and the USFDA ensure compliance. They play critical roles in both oral and parenteral formulations, with single-function excipients remaining prevalent. Lubricants and glidants, along with suspending & viscosity agents, are essential components for various formulations. Overall, the market emphasizes innovation, regulatory standards, and meeting patient needs.

By Type

The market share growth by the organic segment will be significant during the forecast period. Organically derived pharmaceutical excipients include oleochemicals, carbohydrates, petrochemicals, proteins, and others. The most commonly used oleochemical-based pharmaceutical excipients are fatty alcohols, mineral stearates, and glycerin.

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The organic segment was valued at USD 7.13 billion in 2017 and continued to grow until 2021. Carbohydrate-based pharmaceutical excipients include sugars, actual sugars (such as lactose, sucrose, and dextrose), sugar alcohols (such as sorbitol and mannitol), artificial sweeteners, cellulose (such as microcrystalline cellulose, cellulose ethers, carboxymethyl cellulose (CMC), croscarmellose sodium, and cellulose esters), starch (such as modified starch, dried starch, and converted starch), and petrochemicals (such as glycol, which is of two types: polyethylene glycol and propylene glycol, povidone, mineral hydrocarbons, which are of three types: petrolatum, mineral waxes, and mineral oils, and acrylic polymers). The wide application of organic pharmaceutical excipients in the pharmaceutical industry is expected to drive this market growth during the forecast period.

Key Regions

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North America is estimated to contribute 44% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

The expanding aging population base, growing healthcare expenditure, and the high prevalence of chronic diseases, such as diabetes and obesity, will likely drive the growth of the pharmaceutical industry in the region during the forecast period. For instance, the number of Americans aged 65 and over increased from 39.6 million in 2009 to 54.1 million in 2019 (a 36% growth), and it is expected to reach 94.7 million in 2060, according to the Profile of Older Americans Report 2020. With growing age, the risk and complexity of chronic diseases increase. Hence, a wide range of pharmaceutical therapeutic drugs is required to treat such diseases.

Owing to low compliance with oral medications in old age, pharmaceutical industries are investing in R&D to develop different dosage forms of therapeutic products, such as injectables. The injectable dosage form of a drug contains about 97%-98% of pharmaceutical excipients. Thus, the development of injectable dosage forms by pharmaceutical companies for the treatment of several diseases is expected to drive the growth of the regional market during the forecast period.

Market Analyst Overview

The market is driven by a focus on patient-centric formulations and collaborations between pharmaceutical companies and excipient manufacturers. These collaborations aim to develop customized excipient solutions tailored to specific formulation properties, enhanced functionality and meeting regulatory stringency. Regulatory agencies like the FDA (Food and Drug Administration) and the European Medicines Agency (EMA) play a vital role in the approval process, ensuring the safety and efficacy of co-processed multifunctional excipients. They are utilized across various segments, including oral formulations segment, capsules, liquid formulations, topical formulations, and parenteral formulations. Lubricants and glidants, fillers, diluents, and suspending & viscosity agents are essential components in pharmaceutical formulations, supporting the physical process and improving drug delivery outcomes.

The market witnesses significant growth driven by its demand in pharmaceutical products. High investments are made in the development of excipients due to their crucial role in drug products. They are utilized in various quantities and processes such as mixing, blending, and granulation, enhancing physical properties and functionality. Single function excipients offer advantages in the manufacturing process, meeting stringent regulatory requirements set by bodies like the USFDA. Innovation in excipient formulation extends to flavoring agents, colorants, preservatives, and emulsifying agents, catering to popular oral solid dosage forms. Excipients like Gelatin, Polyvinylpyrrolidone (PVD), and Hydroxypropyl methylcellulose (HPMC) are vital components, as recognized by organizations like the India Brand Equity Foundation (IBEF).

Segment Overview

The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Type Outlook 
  • Organic
  • Inorganic

• Product Outlook 
  • Binders and fillers
  • Coating agents
  • Disintegrants
  • Others

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

Market Scope
Report Coverage	Details
Page number	172
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 6.54%
Market growth 2023-2027	USD 3.83 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	5.82
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 44%
Key countries	US, Canada, Japan, UK, and Germany
Competitive landscape	Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks
Key companies profiled	Actylis, Air Liquide SA, Associated British Foods Plc, Avantor Inc., BASF SE, Colorcon Inc., Croda International Plc, DFE Pharma GmbH and Co. KG, Dow Inc., Evonik Industries AG, Innophos Holdings Inc., J M Huber Corp., JRS PHARMA GmbH and Co. KG, Kerry Group Plc, Merck and Co. Inc., Roquette Freres SA, Wacker Chemie AG, Archer Daniels Midland Co., Ashland Inc., and The Lubrizol Corp.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
Customization purview	If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2023 and 2027
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Market growth analysis across North America, Europe, APAC, South America, and Middle East and Africa
• A thorough analysis of the market’s competitive landscape and detailed information about companies
• Market forecasting of factors that will challenge the growth of the key market companies

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