Industry: Healthcare
Published Date: December-2022
Format: PPT*, PDF, EXCEL
Delivery Timelines: Contact Sales
Number of Pages: 245
Report ID: PMRREP11260
Worldwide revenue from the market stands at US$ 192.3 Bn in 2024, with the global market estimated to surge ahead at a CAGR value of 4.2% to reach a valuation of US$ 300.2 Bn by the end of 2033.
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Market Size (2024) |
US$ 192.3 Bn |
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Projected Market Value (2033) |
US$ 300.2 Bn |
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Global Market Growth Rate (2024-2033) |
4.2% CAGR |
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Market Share of Top 4 Countries |
58.3% |
According to Persistence Industry Research, the small molecules are anticipated to contribute more than 90% of the revenue share in 2024 globally. Overall, active pharmaceutical ingredients market sales account for around 13.3% of the global pharmaceutical market, which was estimated to be worth approximately US$ 1.5 trillion in 2024.
The global market for active pharmaceutical ingredients recorded a historic CAGR of 3.4% in the last 6 years from 2019 to 2023.
An active pharmaceutical ingredient (API) is a molecule or substance found in a finished product that has pharmacological activity. API has a direct influence on the target disease's cure, diagnosis, mitigation, or prevention. API is in charge of restoring, changing or correcting physiological functioning in humans.
The global rate of chronic diseases is steadily increasing. The increased prevalence of chronic diseases places a significant health burden on national economies. Diabetes, cardiovascular disease, cancer, obesity, osteoporosis, and pulmonary illnesses are among the most common chronic diseases. Cardiovascular diseases account for roughly half of all chronic disease-related deaths. In the past, these diseases were the leading cause of death. The overall pharma sector is thus, expected to grow rapidly owing to the increasing prevalence of diseases, increasing use of medicines, and growing geriatric population.
Key Pharma companies are working hard to make R&D more efficient and to accelerate the process of bringing breakthrough pharmaceuticals to market. These companies are likewise attempting to cut the costs of drug development and manufacture. As a result, many contract manufacturing organizations, or CDMOs, are in the works. CDMOs are predicted to have a bright future in the coming decade due to cost savings achieved by outsourcing manufacturing skills. Because of the necessity for specific capabilities in the creation of complicated APIs, pharmaceutical companies have chosen to outsource the activities rather than manufacture them in-house.
The introduction of technology that helps in the development and manufacture of APIs in an innovative and easier way is the target of any pharmaceutical industry. To achieve these, companies are introducing technology such as CM technology, a cutting-edge new technology to address environmental changes. It is envisaged that the time necessary for developing production procedures during the pharmaceutical development stage will be reduced. In addition, CM technology is predicted to improve the efficiency of commercial pharmaceutical ingredient production by conserving people and space, as well as to enable sophisticated quality assurance of high-quality pharmaceutical goods.
The global API market is thus likely to show high growth over the coming years a CAGR value of 4.2% and reach a global market size of US$ 300.3 Bn by 2033.
“Increasing Innovation and Research”
The biopharmaceutical sector is quickly developing as a result of the need for drugs that can change the course of therapy, which is creating issues in the healthcare system. Pharmaceutical research advancements will have a substantial impact on the growth of the API industry.
The significance and growth of artificial intelligence (AI) in drug innovation and research are in order to achieve unmet and intractable therapeutic targets. Pharmacological synthesis hurdles for difficult-to-synthesize drug molecules are being overcome through advances in screening tools for preclinical research. Alongside small molecule medication discovery, biologics development has seen a significant increase in recent years. The major influential variables of biologics that will generate growth in the biologics API market are product safety, efficacy, and the potential to cure untreatable diseases. Technological improvements in the biopharma sector as a whole have led to the creation of enormous chemical libraries of potential therapeutic targets.
Additionally, annual applications for biotech patents have increased by 25% since 1995. The number of new pharmaceuticals approved by the FDA has increased significantly. In addition, advances in gene and cell treatments, monoclonal antibodies, and immunotherapies will considerably contribute to the expansion of biologics in the years ahead.
The launch of new pharmaceutical drugs with regulatory approvals that are accessible and affordable is projected to result in high adoption rates, driving market expansion over the projection period.
“Unaffordable treatment cost in developing regions”
The rise in API pricing has impacted the economic viability of manufacturers especially in developing regions like India. India is a favored region for manufacturing APIs both native and outsourced. Under price control of drugs, manufacturers cannot increase the retail price of the medicine and hence the profit margins drop severely.
Prices for the most frequently used APIs have recently increased by 50% to 200%. Price increase of this magnitude make the expense of formulations untenable for producers. Currently, India imports the majority of its APIs through China. According to Indian government regulations, if an Indian company develops a medicine using locally created API (active pharmaceutical ingredients), the drug price control order is lifted.
The hike has also resulted in an increase in the price of the dollar. The additional charges like freight costs have also risen sharply. However, the United States allows manufacturers to set their own prices for drugs. The U.S. market is the only market in the pharmaceutical industry where drug prices are unregulated. Apart from India, Germany, the United Kingdom, France, and Sweden have different price control policies that regulate prices charged by manufacturers.
Thus, the pricing of active pharmaceutical ingredients has impacted the market negatively market.
Why is the U.S. Market Booming?
“Regulations and cost-effectiveness”
The U.S. will account for around 86.7% share of the North American market in 2024.
The United States' healthcare system is highly known for its advanced infrastructure and expenditure. To govern the country's care regime, many regulatory norms and insurance policies are in place. Furthermore, regulatory authorities in the United States are implementing a number of cost-effective strategies to lessen their impact on healthcare. The volume transition to a value-based system is primarily driven by policies implemented by governments, providers, biotechnology companies, and insurance payers.
Furthermore, as the prevalence of chronic and infectious diseases rises, so does the demand for API. In the United States, chronic diseases are the primary cause of death and disability. Chronic diseases consume the vast bulk of healthcare dollars in the United States. The abovementioned factor related to active pharmaceutical ingredients has increased in the United States, endorsing the value of the overall API market.
Will Germany Be a Lucrative Market for Active Pharmaceutical Ingredients?
“Funding Elevating APIs market”
Germany is set to hold around 26.3% market share of the Europe market in 2024.
The German healthcare system is a well-known universal system that is mostly sponsored by the government. It has one of the world's most successful healthcare systems. Germany has the highest level of spending in Europe, which is unsurprising. Furthermore, the country's rising technical breakthroughs, the existence of numerous significant competitors, the expanding chronic illnesses and geriatric population, and growing R&D present a huge opportunity for the API market to flourish.
The June 2020 economic stimulus package includes EUR 1 billion for this purpose. This policy intends to lessen reliance on global supply chains and is expected to spur significant investment in the German pharmaceutical manufacturing sector in the near future.
A supportive environment for development and innovation is enabling Germany to prosper globally becoming the lucrative market for the active pharmaceutical ingredients market.
How is Japan Emerging as a Prominent Market for Active Pharmaceutical Ingredients?
“New Entrants are expected”
Japan will account for around 5.3% of the global market share in 2024.
Japanese pharmaceutical manufacturers mostly operate in the domestic market, with a relatively small share of export sales. The Japanese market is dominated by large multinational corporations and well-established domestic enterprises.
International audiences' interest in learning how to enter Japan and locate area suppliers and manufacturers remains high. Demand for generics, in particular, continues to rise, as corporations seek reliable supply chains and alternative sources, which explains the international interest in networking.
Hence government investments and prevalence are going to drive the Japan’s active pharmaceutical ingredients market.
Which API is Widely Adopted in the Global Active pharmaceutical ingredient Market?
“Efficiency and effectiveness of Small Molecules”
The Small Molecules segment is set to hold more than 90% share of the total active pharmaceutical ingredients market in 2024.
Therapeutically, small-molecule medications have several significant advantages. To begin, the majority of these compounds can cross cell membranes to reach intracellular sites. Second, smaller molecules can be made into tablets and capsules, subcutaneous or intravenous Injectables, inhalational drugs, or suppositories. As a result of the medicine's efficient mechanism and excellent effects, it has become the most often utilized and in-demand API in the active pharmaceutical ingredients market, propelling the market growth.
Which End User Sets be the most lucrative in the Active pharmaceutical ingredients Market?
“Production of Pharmaceutical Products”
Pharmaceutical Companies will hold a larger share of about 37.4% with a market value of around US$ 74.7 Bn in 2024 globally. APIs play a vital role in the development of drugs and therapeutic products. It is a type of substance that is utilized as a raw material in the preparation of various medicine-related formulae. It can be obtained from plant extraction or in the form of powder, crystals, or extracts. They have the license and authority for production and utilizing APIs and hence this makes them the most lucrative among other segments.
The leaders of the pharmaceutical industry are fragmented. Leading manufacturers are adding technologically advanced machinery to broaden their product portfolio and manufacturing capabilities around the world. A number of prominent competitors in the active pharmaceutical ingredients market have carried out similar consolidation operations, such as mergers and acquisitions. Another key tactic identified in the business is the rise of firm collaborations to boost their active pharmaceutical ingredients offerings.
For instance:
Similarly, the team at Persistence Market Research has tracked recent developments related to companies in the global API market, which are available in the full report.
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Details |
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Forecast Period |
2024-2033 |
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Historical Data Available for |
2019-2023 |
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Market Analysis |
USD Billion for Value |
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Key Countries Covered |
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Key Market Segments Covered |
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Key Companies Profiled |
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Report Coverage |
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Customization & Pricing |
Available upon Request |
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The global market is currently valued at around US$ 192.3 Bn in 2022.
Sales of the active pharmaceutical ingredients are set to witness a high growth rate of 4.2% and be valued at US$ 300.2 Bn by 2033.
Demand for the active pharmaceutical ingredients increased at 3.4% CAGR from 2016 to 2022.
The U.S., China, India, Brazil and Japan account for most demand for active pharmaceutical ingredients, currently holding 58.3% market share.
The U.S. will account for around 86.7% share of the North American market in 2023.
Pfizer Inc., Boehringer Ingelheim International GmbH, and F. Hoffmann-La Roche Ltd are the top three manufacturers of active pharmaceutical ingredients.
Japan will account for around 5.3% of the global market share in 2023.
Demand for Active pharmaceutical ingredients in Europe is increasing and will hold a market share of 18.2% of the global market in 2023.
Some of the significant trends in this industry are an increased emphasis on improving medications, novel drug releases, and favorable regulatory circumstances.
Germany is set to hold around 26.3% market share of the Europe market in 2023.
