Press Releases

Global Active Pharmaceutical Ingredients Market Poised To Expand

June 26, 2018

WELLESLEY, Mass., June 26, 2018 – Over the next five years, the global market for active pharmaceutical ingredients (APIs) will be driven by increased demand for pharmaceutical products such as generics and biological drugs. A new BCC Research study projects that this market will reach $154.7 billion by 2022 and examines it by molecular entity, manufacturer type, end use and geographic region.

Generic and contract manufacturers are adopting backward integration as a strategy for consolidation of API development and manufacturing activities. Specialty APIs, such as biologics and high potent APIs, are the new game changers, capable of offering potential returns to API manufacturers and service providers. From a total of $114.2 billion in 2017, this market is projected to undergo a five-year compound annual growth rate (CAGR) of 6.2%, according to BCC Research’s new report, Active Pharmaceutical Ingredients: Global Markets to 2022.

The API industry is highly fragmented. Established companies are engaging in consolidation through acquisition, and there is little opportunity to offer differentiated products, with the exception of emerging high potent APIs and biological APIs. Manufacturers of commoditized APIs are building business through price competition.

Research Highlights

  • By type, captive manufacturers, which manufacture APIs from in-house production units, are the dominant segment, with a predicted CAGR of 6.0% to 2022.
  • The use of APIs for clinical trials purposes will increase due to a rise in the number of clinical trials, increased venture capital funding and focus on the development of orphan drugs.
  • The synthetic API market is expected to witness a CAGR of 6.7%, compared with an estimated CAGR of 3.1% for natural APIs.

“API manufacturers are promoting themselves as a one-stop shop for API development and manufacture,” the report notes. “Advances in biomanufacturing are presenting new opportunities for API manufacturers to improve their capabilities in biopharmaceutical development and manufacture. Increased regulatory intervention and supply chain integrity issues are shifting the focus from Asia-Pacific manufacturers back to Western European and American API manufacturers.”

Asia is Largest API Production Hub

With increased competition, pricing pressures and regulatory changes, drug manufacturers are resorting to outsourcing raw material procurement and manufacturing activities. North America and Europe are the largest markets for APIs (with CAGRs of 5.6% and 5.5%, respectively) in terms of consumption proportionate to the demand for pharmaceutical products. Asia-Pacific and RoW are the fastest-growing markets for APIs (8.0% and 7.2% CAGRs, respectively) due to increases in consumption, healthcare expenditures and access to medicines.

Editors/reporters requesting analyst interviews should contact Eric Surber at press@bccresearch.com.

Active Pharmaceutical Ingredients: Global Markets to 2022( PHM200A )
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