Global Active Pharmaceutical Ingredients (API) Market Grows Steadily at a CAGR of 6.05%

Introduction

An active pharmaceutical ingredient (API) is any substance or combination of substances used in a finished pharmaceutical product (FPP) that directly affects the diagnosis, treatment, mitigation, therapy, or prevention of disease or the repair, correction, or alteration of human physiological functions.

Market Dynamics

Prevalence of Chronic Diseases like Infectious, Genetic, and Cardiovascular Drives the Global Market

The top five global causes of years lived with disability (YLD) in 2016 were lower back pain, migraines, iron deficiency anemia, and major depressive disorders, according to the Global Burden of Disease Study 2016. In addition, the same study found that all musculoskeletal conditions, migraine, Alzheimer's disease, iron deficiency anemia, and major depressive disorder were significant contributors to higher YLD rates in women, in addition to gout.

Additionally, according to the Global Burden of Disease Study 2016, the top 10 diseases with the highest global prevalences were, in decreasing order, mineral deficiency disorders, respiratory infections, diarrheal disease, skin infections, and infections of the skin. According to the WHO, there are approximately 18 million fatalities annually caused by cardiovascular diseases (CVDs). Therefore, 31% of annual deaths are attributable to CVDs. The rise in the prevalence of cardiovascular disease can be attributed to several concurrent factors, including the global aging population, the shift to sedentary lifestyles in developed nations, and other lifestyle-related vices like smoking and drinking.

Extremely Potent Pharmaceutical Components Create Tremendous Opportunities

The introduction of highly potent active pharmaceutical ingredients has significantly altered how pharmaceutical companies use small molecules to deliver novel therapies (HPAPIS). A pipeline of more potent drugs with lower dosage requirements has been produced due to the switch to HPAPIS. The benefits of HPAPIs, such as their high efficacy, reduced need for therapeutic doses (due to the selective mode of action), and ability to bind to receptors, can be viewed as the main reasons for both manufacturers' and consumers' rising demand for them. Small molecules have historically dominated the market for APIs. As the generic APIs market continues to become highly competitive, API producers are looking to more recent channels, like HPAPIs, to differentiate themselves from the competition.

Regional Analysis

North America is the largest revenue contributor and is anticipated to grow at a CAGR of 5.83% over the forecast period. The United States spends the most money on pharmaceutical research and development worldwide. It is also the largest market for bulk medications and finished dosage formulations. The free market economic principles that govern the US market are designed to promote open trade and forbid anti-competitive behavior. Due to the US FDA's significant increase in regulatory requirements for API manufacturers, manufacturers worldwide are under intense cost pressure. The FDA has organized teams to visit factories in specific countries and increased the frequency of its inspections of foreign manufacturers. Despite competitive pressures and regulatory challenges, the US API market is anticipated to grow significantly over the forecast period.

Asia-Pacific is anticipated to grow at a CAGR of 7.07% during the forecast period. According to data from the World Bank, healthcare spending in Japan has been steadily rising. It contributed 10.89% of the GDP in 2015 as opposed to 10.83% in 2014. The Japanese Ministry of Health, Labor, and Welfare (MHLW) has taken action and decided to promote the use of generic medications to reduce healthcare costs. The third-largest pharmaceutical market in the world is found in Japan. Japan's domestic market is increasingly focused on exports, and foreign companies are looking for ways to fund and utilize the nation's powerful, well-resourced healthcare system. As Japan relied heavily on the importation of the API, which resulted in a shortage of the substance, it was realized that to rely on generic medications, it is essential to promote the manufacturing of the API. As a result, Japan has seen an increase in API production. The market has grown as a result of a rise in local businesses.

Key Highlights

• The global active pharmaceutical ingredients (API) market was valued at USD 209.19 million in 2022. It is expected to reach USD 487.01 million by 2031, growing at a CAGR of 6.05% during the forecast period (2023–2031).
• Based on business mode, the global active pharmaceutical ingredients (API) market is bifurcated into captive API and merchant API. The captive API segment is the highest contributor to the market and is expected to grow at a CAGR of 6.14% during the forecast period.
• Based on synthesis type, the global active pharmaceutical ingredients (API) market is bifurcated into synthetic and biotech. The synthetic segment is the highest contributor to the market and is expected to grow at a CAGR of 5.70% during the forecast period.
• Based on type, the global active pharmaceutical ingredients (API) market is bifurcated into generic and branded. The branded segment is the highest contributor to the market and is expected to grow at a CAGR of 6.11% during the forecast period.
• Based on application, the global active pharmaceutical ingredients (API) market is bifurcated into cardiology, pulmonology, oncology, ophthalmology, neurology, and orthopedics. The cardiology segment is the highest contributor to the market and is expected to grow at a CAGR of 6.15% during the forecast period.
• North America is the most significant revenue contributor and is expected to grow at a CAGR of 5.83% during the forecast period.

Competitive Players

1. Aurobindo Pharma Ltd
2. BASF SE
3. Boehringer Ingelheim GmbH
4. Dr. Reddys Laboratories Ltd
5. Lupin Ltd
6. Mylan NV
7. Novartis AG
8. Pfizer Inc.
9. Sun Pharmaceutical Industries Ltd
10. Teva Pharmaceutical Industries Ltd.

Recent Developments

• February 2023- Zydus Lifesciences stated it had received final approval from the US Food and Drug Administration (USFDA) for Pitavastatin tablets.
• September 2022- Boehringer Ingelheim introducedFencovis, a calf diarrhea vaccine.

Segmentation

1. By Business Mode
   1. Captive API
   2. Merchant API
2. By Synthesis Type
   1. Synthetic
   2. Biotech
3. By Type
   1. Generic
   2. Branded
4. By Applications
   1. Cardiology
   2. Pulmonology
   3. Oncology
   4. Ophthalmology
   5. Neurology
   6. Orthopedic