High Potency Active Pharmaceutical Ingredients Market Size, Share & Trends Analysis Report By Product (Synthetic, Biological), By Manufacturer Type (In-house, Outsourced), By Drug Type (Innovative, Generic), By Therapeutic Applications (Oncology, Hormonal, Glaucoma, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global high potency active pharmaceutical ingredients market size was valued at USD 24.782 billion in 2022. It is estimated to reach USD 48.53 billion by 2031, growing at a CAGR of 9.37% during the forecast period (2023–2031).

High Potency Active Pharmaceutical Ingredient (HPAPI) is a substance with unknown efficacy and toxicity that can activate human biological processes at 150ug/kg or less. The component that goes into pharmaceutical medications is an active pharmaceutical ingredient (API). These drugs are essential for the treatment of a variety of diseases, including cancer. High-potency active pharmacological components are essential for creating extraordinarily potent medicines because they can pinpoint the cells that cause many diseases.

HPAPIs are biologically active compounds that exhibit biological activity at exceedingly low dosage levels. The two categories of high-potency active compounds are generic and novel. HIV, cancer, hormone imbalance, glaucoma, age-related disease, and infectious problems associated with antimicrobial and antiviral medications are just a few of the conditions used to treat, diagnose, and cure the High Potency Active Pharmaceutical Ingredient (HPAPI).

Highlights

• Synthetic dominates the product segment
• In-house dominates the manufacturer-type segment
• Innovative drugs dominate the drug type segment
• North America is the highest shareholder in the global market

Market Dynamics

Global high potency active pharmaceutical ingredients market drivers

Rising prevalence of cancer

The rising prevalence of cancer is expected to be a major factor driving the market. According to the WHO, cancer is the second leading cause of death, accounting for around 9.6 million deaths in 2018, and tobacco use is responsible for 22% of cancer deaths. As per the CDC, the risk factors such as lifestyle changes such as smoking, obesity, alcohol consumption, and exposure to UV radiation from the sun or tanning beds have contributed to the overall burden of the disease.

The cost of cancer care was anticipated to reach USD 174 billion by the end of 2020, which may propel market growth. Cancer is considered among the prominent health hazards due to the increasing number of people affected by the disease. According to Cancer Research UK report 2019, around 990 people are diagnosed with cancer daily. The research initiatives and health awareness campaigns are expected to fuel the global anti-cancer market growth.

Growth of targeted therapies

Cancer continues to be a leading reason of morbidity and mortality internationally; the advent of highly potent medications and treatments, such as precision medicine and targeted tailor-made treatments, is anticipated to expand treatment options. Chemotherapy has numerous adverse effects, including the destruction of healthy cells. As a result, targeted therapy is gaining popularity because it does not damage healthy cells. This will likely increase the demand for HPAPIs in the future.

The characteristics of these anti-cancerous drugs, such as minimum exposure of the drug to non-cancerous cell and their effectiveness, contribute to market growth. Targeted cancer therapies use certain medications that interfere with specific molecular targets to block cancer cells' growth, progress, and proliferation. The strong product pipeline, coupled with research initiatives focused on identifying targets, is fueling the development of treatment alternatives for cancer. This is expected to propel market growth.

Global high potency active pharmaceutical ingredients market restraint

Large investments and stringent safety and handling specifications

HPAPIs are complex material that requires large investments to produce and establish the manufacturing unit. Companies are investing in expanding their manufacturing units to increase their production capacity to address the increased market demand. For instance, in July 2020, CordenPharma International announced the expansion of its peptide manufacturing unit in Colorado to address the increased demand for peptide APIs. However, captive manufacturing is expensive and requires safety and handling specifications.

Moreover, drug formulating companies are closing their manufacturing units, and an increase in outsourcing for manufacturing HPAPIs from contract manufacturers has been observed. For instance, in October 2018, Dr. Reddy's Laboratories Ltd. announced the sales of its API manufacturing plant in Hyderabad. Such factors restrict the overall market growth.

Global high potency active pharmaceutical ingredients market opportunities

Increasing application of hpapi

HPAPIs are a niche market that has grown significantly over the past few years. HPAPI compounds can target infected/unhealthy cells more selectively than APIs. This selective targeting is being utilized in cancer treatment. Moreover, these APIs are used for manufacturing ADCs such as Adcetris and Kadcyla monoclonal antibodies and biologically active drugs. Similarly, HPAPIs are increasingly used in hormonal therapy to treat and manage diseases such as glaucoma. For instance, in February 2012, Merck received approval for its glaucoma treatment drug, tafluprost.

In addition, Bimatoprost and Travoprost, among others, are drugs used to treat glaucoma. Increasing demand for drugs for the treatment of glaucoma is expected to drive market growth. HPAPIs also found application in cardiovascular, central nervous systems, and musculoskeletal drugs. The rising usage of HPAPI in gynecology and cosmetics is also anticipated to create opportunities for market growth.

Regional Analysis

Based on region, the global high-potency active pharmaceutical ingredients market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North america dominates the global market

North America is the most significant global high potency active pharmaceutical ingredients market shareholder and is estimated to exhibit a CAGR of 7.89% during the forecast period. North America held the largest market share of the high potency active pharmaceutical ingredients market owing to the presence of major market participants, developed infrastructure, and the rising prevalence of various diseases in the region. The rising demand for fast-acting and more effective drugs and the growing prevalence of chronic illnesses have also contributed to this expansion. Rising emphasis on personalized medicine, growing collaborations and externalization with academic research institutes, and increasing adoption of healthcare IT are among the factors anticipated to further propel regional market growth.

Furthermore, increasing awareness of highly potent drugs, rising demand for anti-cancer therapeutics, and a growing number of biotechnology companies are some of the factors contributing to the biggest share held by this region. Growing regulatory support and increasing investments in biotechnology and biopharmaceutical industries are anticipated to fuel market growth. Moreover, with blockbuster and patented drugs nearing expiration, High Potency Active Pharmaceutical Ingredients (HPAPI) supply becomes one of the key alternatives for continuous revenue generation.

Europe is expected to exhibit a CAGR of 8.5% over the forecast period. The market is anticipated to be driven by increased research funding and the local presence of important market participants. The number of biopharmaceutical companies in Europe has grown as a result of recent investment growth. For instance, the biopharma industry raised USD 20 billion in investment in 2017, which climbed by 28% to USD 27.5 billion in 2019. In addition, the majority of the research and development for biopharmaceuticals is carried out in Europe. Europe is the second-largest market for HPAPI in terms of revenue share. This can be attributed to the presence of developed economies in the region, such as Germany, Turkey, the UK, France, and Italy. The availability of advanced technology and increasing R&D in Europe is also anticipated to fuel market growth during the forecast period.

Asia-Pacific consists of a blend of developing and developed economies. Rising healthcare expenditure in the region is anticipated to fuel market growth. According to NCBI, in 2019, 24% of overall breast cancer cases were in Japan, China, and Indonesia in the Asia Pacific region. However, increasing access to oncology diagnosis and treatment is anticipated to fuel the market's growth. The Asia-Pacific market for HPAPI is expected to show significant growth over the forecast period, which can be attributed to emerging economies, a rapidly growing oncology market, supportive government initiatives, and growing investments in the biotechnology sector. The growing generics sector and improving healthcare facilities will fuel regional market growth during the forecast period.

Latin America region includes rapidly evolving economies with the presence of countries such as Brazil and Mexico. Increasing R&D activities and rapid technological advancements in the region are anticipated to fuel market growth. Rising government spending, growing investments by major pharmaceutical and biopharmaceutical companies, and the presence of major academic research institutes are among the factors aiding in market growth.

In the Middle East and Africa, the rising economic development and high unmet healthcare need fuel the growth of the high-potency active pharmaceutical ingredients market. This region includes South Africa and Saudi Arabia. According to WHO, noncommunicable diseases and injuries account for 48% of the deaths in South Africa. The rate of diagnosis of cancer is low in the region. The delay in treatment and diagnosis leads to low survival rates. This creates an unmet need for low-priced and economical tests in the region, which is expected to fuel market growth.

Segmental Analysis

The global high-potency active pharmaceutical ingredients market is bifurcated into product, manufacturer type, drug type, and therapeutic application.

Based on product, the global high-potency active pharmaceutical ingredients market is bifurcated into synthetic and biotech. 

The synthetic segment owns the highest market share and is predicted to exhibit a CAGR of 8.6% over the forecast period. Synthetic API molecules are traditional drug molecules with an organic chemistry base. These molecules have occupational exposure limits of less than 10 µg per cubic meter of air. At very low quantities, these compounds are effective in the therapy of a variety of disorders. In addition, synthetic APIs consist of organic compounds whose properties vary based on the components attached. Easy availability of raw materials and highly developed manufacturing systems are also factors driving the market. In the upcoming years, several synthetic compounds are forecast to lose their patent protection, which is anticipated to spur market expansion.

Based on manufacturer type, the global high-potency active pharmaceutical ingredients market is bifurcated into in-house and outsourced. 

The in-house segment dominates the global market and is projected to grow at a CAGR of 8.01% over the forecast period. HPAPI molecules are manufactured by some pharmaceutical companies at in-house manufacturing facilities. Pharmaceutical companies invest heavily in developing in-house capabilities and specialized requirements for toxicity containment. According to the Japan Pharmaceutical Manufacturers Association, Japanese pharmaceutical companies have continuously increased their R&D investments to discover and develop novel drugs yearly. These investments represent more than 17% of total net sales.

Companies have also launched their research funds to collaborate with outside researchers to develop new drugs. For example, Astellas Pharma and Daiichi Sankyo launched a3 (a-cube) and TaNeDS, respectively. However, recent developments and initiatives by important companies imply that they are strongly focused on internal production rather than outsourcing. For instance, Novartis announced the acquisition of CellforCure—a CDMO with headquarters in France—in November 2019 to make molecules internally that had previously been contracted out to CellforCure on a contract manufacturing basis. The key players' initiatives will accelerate segment growth.

Based on drug type, the global high-potency active pharmaceutical ingredients market is divided into innovative and generic drugs. 

The innovative drug segment accounts for the largest market share and is anticipated to exhibit a CAGR of 7.98% over the forecast period. Growing focus on personalized and precision medicines like Antibody Drug Conjugates (ADCs) to treat specific patient conditions drives the development of novel APIs, making innovation in this domain a high-impact-rendering market driver. Due to the reclassification of the HPAPI list, new compounds have been added, which are anticipated to increase the application areas of HPAPIs. A rise in CMOs' investments focusing on HPAPIs is expected to fuel the market.

Additionally, the rise in demand for targeted therapies with high potency compounds such as HPAPIs is anticipated to further create significant demand for personalized medicines. For instance, ADCs take advantage of antibodies' focus on cancer cells. In order to affix to the antibody, these cells use linker technology. As a result, it is anticipated that such advanced features of ADCs will drive the market because the majority of pharmaceutical companies are undertaking such development initiatives.

Based on therapeutic application, the global high-potency active pharmaceutical ingredients market is divided into glaucoma, oncology, hormonal, and others. 

The oncology segment owns the highest market share and is anticipated to exhibit a CAGR of 8.8% over the forecast period. The oncology segment held the most significant share in the therapeutic application market due to the rise in the prevalence of cancer. According to the WHO, in 2018, there were an estimated 18 million cancer cases globally. Each cancer contributed to 12.3% of the total diagnosed cases in 2018. Due to the rise in cancer incidence, key market participants are expanding their manufacturing capabilities to meet unmet needs. For instance, Lonza expanded its HPAPI capacity to support manufacturing ADCs. The key advantage of ADC therapy is that it solely targets cancer cells without harming healthy cells. This is a sharp contrast to chemotherapeutic approaches, as healthy cells are also affected during chemotherapy treatment.

Recent Developments

• January 2023- Sai Life Sciences, one of India's most rapidly expanding Contract Research, Development, and Manufacturing Organizations (CRO-CDMO), announced the inauguration of a new High-Potency API (HPAPI) manufacturing facility at its cGMP API Manufacturing campus in Bidar, India. This new facility expands the company's expertise in HPAPI development and manufacturing, streamlining its clients' NCE development process.
• May 2023- Particle transfer expert ChargePoint Technology formed an HPAPI Alliance with sampling device expert Famat Sampling to tackle one of the most difficult containment issues in the industry. The pharmaceutical suppliers have developed an integrated valve solution that allows operators to capture a product sample for quality analysis during the production process while maintaining optimal containment and sterile integrity.