Active Pharmaceutical Ingredient Market to Exceed US$ 225.2 Bn in 2025

An active pharmaceutical ingredient is used in a finished pharmaceutical product (FPP), intended to carry certain pharmacological actions or otherwise have a direct effect in the diagnosis, cure, treatment, mitigation or prevention of various diseases, or in some cases in restoring, correcting or modifying human physiological functions.

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Sales of pharmaceutical ingredient are on the rise due to a substantial increase in high-potency API (HPAPI) and peptide API manufacturing.  A new study conducted by Persistence Market Research reveals that the US$ 151.9 Bn global active pharmaceutical ingredient market will grow to US$ 158.3 Bn by 2017 end, reflecting a Y-o-Y growth rate of 4.2%. This market is estimated to further increase to US$ 225.2 Bn, expanding at a CAGR of 4.5% over the forecast period (2016 – 2025)

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PMR in its report, titled “Active Pharmaceutical Ingredient Market – Global Industry Analysis and Forecast, 2016 – 2025” has cited some of the key factors prompting the global sales of API, which include:

Higher emphases on the development of novel therapeutics that contain high-potency active pharmaceutical ingredients (HPAPIs). Ramped-up investments from large-scale API manufacturers and contract manufacturers in production of high potency API. The lower cost of labor cost and abundance of raw materials continue to facilitate the growth of API market in the Asia region. Faster approvals of API based peptide and diabetes management drugs. Over the recent past, a range of peptide drugs has been approved treatment of type 2 Diabetes Mellitus including Albiglutide (GSK), Dulaglutide (Eli Lilly), Exenatide (Amylin Pharmaceuticals) and Glucagon (Xeris Pharmaceuticals).

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According to the report, small molecule API type segment holds promising investment opportunities for market participants on account of the numerous off-patent events incurred in the last five years coupled with a strong penetration of small scale manufacturers in Asia.  On the basis region, APAC’s API market was valued at US$ 61.4 Bn in 2016 and is projected to witness the highest CAGR of 5.1 % during the forecast period to reach a valuation of US$ 95.6 Bn. This is primarily owing to the leadership of China and India in SMEs as well as their strong distribution network in overseas markets especially in US, South Africa, and Europe. Asian pharmaceuticals CMOs are competing on the basis of cost and timeline for API manufacturing and are attracting U.S.-based pharmaceuticals companies that are willing to outsource manufacturing requirements. Meanwhile, Europe is projected to be the second fastest growing market for API and is expected to reach US$ 42.5 Bn by 2025-end. Manufacturers in Europe are prioritizing high-quality standards, advanced manufacturing installations, and high purity of intermediates (API).

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Competitive Dashboard

Johnson Matthey, Siegfried, Almac, PolyPeptide Laboratories, AmbioPharm, Inc., Corden Pharma, Pepscan, BCN peptide, Provence Technologies Groups, SennChemicals AG, Avecia OligoMedicines, Santaris Pharma  - acquired by Roche in 2014, ST Pharm Oligo Center, Cepia Sanofi, Biospring, Pfizer CenterSource, Symbiotec Pharma Lab Pvt. Ltd., Gadea Grupo Farmacéutico, STEROID S.p.A., Dolder AG, Dalton Pharma Services, FarmaBios Spa, Dextra Laboratories Limited, GlycoSyn, Inalco Pharma, Sussex Research, Pfanstiehl, Inc., Noramco, Inc., Johnson Matthey, Siegfried, Rhodes Technologies, Ash Stevens, Fermion (public), FARMHISPANIA GROUP, Olon SpA, Lonza Group are some of the leading companies operating in the global active pharmaceutical ingredient market. Currently, many of the pharmaceutical companies are focused on outsourcing of API manufacturing to avoid large capital investments in setting up of API manufacturing facilities. This has accelerated the demand for CMOs in API manufacturing industry, which is dominated by small to medium manufacturers.

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