Active Pharmaceutical Ingredients Market Size to Increase USD 416.15 Billion By 2033

The global active pharmaceutical ingredients market size was evaluated at USD 237.48 billion in 2023 and it is expected to increase around USD 416.15 billion by 2033 with a CAGR of 5.77% from 2024 to 2033. Active Pharmaceutical Ingredients (APIs) are the primary components responsible for the therapeutic effects of pharmaceutical drugs. These chemical entities undergo stringent quality control measures to ensure efficacy, safety, and consistency in drug formulations.

Key Pointers

  • North America asserted its dominance in the market, commanding a substantial 39% share in 2023.
  • The Asia Pacific region is currently witnessing the most rapid growth trajectory from 2024 to 2033.
  • Among different synthesis types, the synthetic segment emerged as the leader, holding a commanding 71% revenue share in 2023.
  • The innovative APIs segment stood out by generating the maximum market share in 2023.
  • The cardiology segment took the spotlight by contributing the largest share of the market in 2023.

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Active Pharmaceutical Ingredients Market Top Trends

  • Rising Demand for Biopharmaceuticals: There is a growing preference for biopharmaceuticals, which are derived from biological sources such as living organisms or their components. Biologics offer enhanced efficacy and specificity compared to traditional small-molecule drugs, driving their demand in therapeutic areas such as oncology, autoimmune diseases, and infectious diseases.
  • Increased Outsourcing of API Manufacturing: Pharmaceutical companies are increasingly outsourcing API manufacturing to specialized contract manufacturing organizations (CMOs) to reduce costs, enhance flexibility, and access specialized expertise. Outsourcing allows companies to focus on core competencies such as drug discovery and marketing while leveraging the capabilities of CMOs for API production.
  • Focus on Quality and Regulatory Compliance: Stringent regulatory requirements and quality standards govern the production and distribution of APIs to ensure patient safety and product efficacy. Pharmaceutical companies are investing in robust quality management systems and compliance measures to meet regulatory expectations and mitigate risks associated with non-compliance.
  • Emergence of Complex APIs and Advanced Manufacturing Technologies: Advances in chemistry, biotechnology, and engineering have enabled the development of complex APIs with improved therapeutic profiles and manufacturing processes. Techniques such as continuous flow chemistry, high-throughput screening, and computer-aided design are revolutionizing API synthesis, leading to more efficient and cost-effective production.
  • Focus on Personalized Medicine and Precision Therapeutics: Personalized medicine, which tailors treatment strategies to individual patient characteristics, is gaining momentum in the pharmaceutical industry. APIs play a crucial role in the development of precision therapeutics, including targeted therapies, gene therapies, and cell-based therapies, which offer enhanced efficacy and reduced side effects.
  • Expansion of Biosimilar and Generic APIs: With the expiration of patents for many blockbuster drugs, there is a growing market for biosimilar and generic APIs. Biosimilars, which are highly similar versions of existing biologic drugs, offer cost-effective alternatives to branded products, driving their adoption in healthcare systems worldwide. Generic APIs also play a vital role in improving access to essential medicines and reducing healthcare costs.

Active Pharmaceutical Ingredients Market Use Cases

  • Cardiovascular Diseases: APIs play a crucial role in the management and treatment of cardiovascular diseases such as hypertension, coronary artery disease, and heart failure. Common APIs used in cardiovascular medications include ACE inhibitors, beta-blockers, calcium channel blockers, and statins. These medications help regulate blood pressure, improve cardiac function, and reduce the risk of cardiovascular events.
  • Oncology: In the field of oncology, APIs are utilized in the development of chemotherapy drugs, targeted therapies, and immunotherapies to combat various types of cancer. Chemotherapeutic agents such as paclitaxel, cisplatin, and doxorubicin inhibit the growth and spread of cancer cells, while targeted therapies such as tyrosine kinase inhibitors and monoclonal antibodies target specific molecular pathways involved in cancer progression.
  • Central Nervous System Disorders: APIs are instrumental in the treatment of central nervous system disorders, including neurological and psychiatric conditions such as depression, anxiety, epilepsy, and Alzheimer's disease. APIs such as selective serotonin reuptake inhibitors (SSRIs), benzodiazepines, antiepileptic drugs, and cholinesterase inhibitors help alleviate symptoms, regulate neurotransmitter levels, and improve cognitive function in patients.
  • Infectious Diseases: APIs are indispensable in the fight against infectious diseases caused by bacteria, viruses, fungi, and parasites. Antibiotics, antivirals, antifungals, and antiparasitic drugs containing APIs such as penicillin, azithromycin, oseltamivir, and albendazole are used to treat a wide spectrum of infectious pathogens and prevent the spread of infectious diseases.
  • Respiratory Disorders: APIs are utilized in the management of respiratory disorders such as asthma, chronic obstructive pulmonary disease (COPD), and allergic rhinitis. Bronchodilators, corticosteroids, leukotriene modifiers, and antihistamines containing APIs such as salbutamol, fluticasone, montelukast, and cetirizine help alleviate airway inflammation, improve lung function, and relieve respiratory symptoms.

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Type of Synthesis Insights

In 2023, the synthetic segment dominated the market, commanding a significant revenue share of 71%. The key driver behind this dominance is the surging demand for generic drugs. APIs used in manufacturing these drugs play a crucial role in boosting the revenue of companies engaged in synthetic and chemical API manufacturing. This trend creates ample opportunities for Contract Development and Manufacturing Organizations (CDMOs) operating in this sector. Moreover, the synthetic API market is increasingly appealing to CDMOs due to the rising outsourcing trend, as companies seek to enhance profitability by cutting production costs.

Conversely, the biotech API segment is poised for rapid growth during the forecast period. This growth is fueled by increasing investments in the biopharmaceutical and biotechnology sectors, facilitating the development of new molecules tailored to combat diseases such as cancer. Major industry players are showing keen interest in biotech APIs due to their significant revenue potential and profitability.

GLOBAL ACTIVE PHARMACEUTICAL INGREDIENTS (API) MARKET, BY TYPE Of Synthesis 2021-2023 ($BILLION)

Type of Synthesis

2021

2022

2023

Biotech

54.77

57.56

60.70

Synthetic

139.79

146.48

154.02

 

Type Insights

In 2023, the Innovative APIs segment emerged as the dominant force in the overall API market, capturing a significant revenue share. The market's robust growth is primarily driven by increased funding and favorable regulations governing research and development (R&D) facilities. Extensive research in this field has led to the development of numerous innovative products, poised for imminent launch. Moreover, the growing support from regulatory agencies for new drug approvals is expected to further facilitate market expansion. This trend is a response to heightened government attention to healthcare and pharmaceuticals prompted by the COVID-19 pandemic.

In contrast, the Generic APIs segment is projected to experience the fastest growth over the forecast period. The expiration of patents for various branded molecules presents a significant opportunity for the expansion of generic API drugs. Post-pandemic, the pharmaceutical industry faces a patent cliff by 2030, with nearly 200 molecules losing exclusivity and over 100 biosimilars in development as of 2023. This scenario creates a favorable landscape for generic API manufacturers, as demand for APIs of these products is set to surge by the end of the decade. Notably, this includes over 60 molecules within the oncology segment, featuring complex, high-revenue-generating APIs.

GLOBAL ACTIVE PHARMACEUTICAL INGREDIENTS (API) MARKET, BY TYPE 2021-2030 ($BILLION)

Type

2021

2022

2023

2026

2027

2030

CAGR%
(2022-2030)

Generic APIs

67.13

70.60

74.50

88.22

93.72

114.66

6.2%

Innovative APIs

127.43

133.44

140.22

163.94

173.40

209.50

5.8%

 

Application Insights

In 2023, the cardiology segment emerged as a dominant force in the API market, boasting a significant revenue share. This dominance stems from the escalating prevalence of cardiovascular diseases (CVDs) globally. According to the World Heart Report 2023, over half a billion people worldwide are affected by CVDs, resulting in approximately 20.5 million deaths in 2021. This staggering statistic represents nearly a third of all global deaths and signifies an increase from previous estimates. Cardiovascular disease poses one of the most significant public health challenges globally, driving extensive research into APIs within this field. Notably, Simvastatin, a cholesterol-lowering drug belonging to the statin class, is widely used in treating dyslipidemia.

Conversely, the Oncology segment is poised for the fastest growth rate over the forecast period. The rising global prevalence of cancer acts as a primary catalyst propelling this market forward. Collaboration among pharmaceutical companies, research institutions, and regulatory bodies remains pivotal in accelerating drug development, ensuring patient safety, and fostering innovation. A notable example of such collaboration is evident in the March 2023 merger agreement between Pfizer Inc. and Seagen Inc. Through this strategic alliance, Pfizer will acquire Seagen, a renowned biotech firm recognized for its groundbreaking cancer treatments. The agreement, structured as a cash transaction of USD 229 per Seagen share, will result in an enterprise value of USD 43 billion.

Type of Drug Insights

In 2023, the Prescription segment emerged as the dominant force in the overall API market, securing a substantial revenue share. The use of prescription drugs heavily relies on physicians' prescriptions. While the use of prescription drugs like Proton Pump Inhibitors (PPIs) for managing general conditions such as heartburn has leveled off due to various adverse effects, there has been an impact on the prescription rates of Histamine-2 Receptor Antagonists (H2RAs). In the oncology segment, prescription drugs reign supreme as cancer treatment primarily involves chemotherapy, targeted therapy, immunotherapy, and hormonal therapy. Additionally, the use of biologics is on the rise.

On the other hand, the Over-the-Counter (OTC) segment is expected to show the fastest growth over the forecast period. OTC products are widely accessible to the population and are often influenced by changes in consumer behavior. There is a noticeable shift in consumer preference from using antacids for heartburn to focusing on gut health through the consumption of probiotics. This shift has created significant opportunities for preventive products such as health supplements, nutraceuticals, and probiotics, while simultaneously slowing the growth of existing products.

Regional Insights

In 2023, the North America API market took the lead in the industry, commanding a significant share of 39%. This dominance can be attributed to the rising prevalence of cardiovascular, genetic, and other chronic diseases, coupled with growing research in drug development within the region. The presence of key players like AbbVie Inc., Curia, Pfizer Inc. (Pfizer Center One), Viatris Inc., and Fresenius Kabi AG further enhances growth prospects. For instance, in February 2022, Viatris obtained FDA approval for Generic Restasis, a cyclosporine ophthalmic emulsion used to treat dry eye disease. The region boasts high-value manufacturing areas, covering complex and high-potency APIs, gene therapies, and biologicals, which are expected to drive relative growth.

Meanwhile, the API market in the Asia Pacific region is experiencing the fastest growth over the forecasted years. This surge is fueled by a majority of API production taking place in countries within the region, along with a high API export rate. China stands out as the largest producer of APIs, manufacturing over 1,600 varieties of chemical APIs. Furthermore, several key global players are establishing their operations in the region. Rising investments and initiatives to strengthen and expand manufacturing facilities further propel overall API market growth.

GLOBAL ACTIVE PHARMACEUTICAL INGREDIENTS (API) MARKET, BY REGION 2021-2027 ($BILLION)

Region

2021

2022

2023

2024

2025

2026

2027

North America

74.35

78.07

82.26

86.74

91.66

96.96

102.84

Europe

55.17

57.75

60.66

63.76

67.17

70.83

74.90

Asia Pacific

43.35

45.60

48.14

50.86

53.85

57.06

60.64

LAMEA

21.70

22.62

23.67

24.78

26.00

27.30

28.75

 

Active Pharmaceutical Ingredients Market Key Companies

  • Sun Pharmaceutical Industries Ltd.
  • Teva Pharmaceutical Industries Ltd.
  • Cipla Inc.
  • AbbVie Inc.
  • Aurobindo Pharma
  • Sandoz International GmbH (Novartis AG)
  • Viatris Inc.
  • Fresenius Kabi AG
  • STADA Arzneimittel AG

Active Pharmaceutical Ingredients Market Segmentations:

By Type of Synthesis

  • Biotech
    • Biotech APIs Market, By Type
      • Generic APIs
      • Innovative APIs
    • Biotech APIs Market, By Product
      • Monoclonal Antibodies
      • Hormones
      • Cytokines
      • Recombinant Proteins
      • Therapeutic Enzymes
      • Vaccines
      • Blood Factors
  • Synthetic
    • Synthetic APIs Market, By Type
      • Generic APIs
      • Innovative APIs

By Type of Manufacturer

  • Captive APIs
  • Merchant APIs

By Type

  • Generic APIs
  • Innovative APIs

By Application

  • Cardiovascular Diseases
  • Oncology
  • CNS and Neurology
  • Orthopedic
  • Endocrinology
  • Pulmonology
  • Gastroenterology
  • Nephrology
  • Ophthalmology
  • Others

By Type of Drug

  • Prescription
  • OTC

By Region

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East and Africa (MEA)

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