Active Pharmaceutical Ingredients Market to Grow by USD 86.47 Billion (2024-2028), Driven by Evolving API Manufacturing, with AI Driving Market Transformation - Technavio

NEW YORK, Dec. 2, 2024 /PRNewswire/ -- Report with the AI impact on market trends - The global active pharmaceutical ingredients market size is estimated to grow by USD 86.47 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of over 6.73%  during the forecast period. Evolving api manufacturing scenario in developing scenario is driving market growth, with a trend towards paradigm shift in api manufacturing. However, high investment cost and concern of huge loss  poses a challenge. Key market players include AbbVie Inc., Amneal Pharmaceuticals Inc., Apotex Inc., Aurobindo Pharma Ltd., Cadila Pharmaceuticals Ltd., Cambrex Corp., Cipla Ltd., Dr Reddys Laboratories Ltd., GlaxoSmithKline Plc, Indena S.p.A., INTERNATIONAL CHEMICAL INVESTORS S.E., Koninklijke DSM NV, Lupin Ltd., Novartis AG, Pfizer Inc., Sanofi SA, Sun Pharmaceutical Industries Ltd., Teva Pharmaceutical Industries Ltd., Thermo Fisher Scientific Inc., and Viatris Inc..

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Market Driver

Pharmaceutical companies have historically relied on in-house capabilities for API discovery, development, and manufacturing. However, the last few decades have seen a shift towards outsourcing these processes to Contract Manufacturing Organizations (CMOs) or other drug manufacturing entities. Initially, this was driven by necessity, but it has since evolved into an effective collaboration model. The value chain for APIs has expanded from early-stage intermediates to advanced intermediates and final dosage forms. The decision to outsource an API depends on industry trends, cost of new technologies, and internal capacity. Small organizations particularly benefit from outsourcing due to cost savings and time efficiencies. Outsourcing enables companies to meet aggressive development timelines and capitalize on supply chain efficiencies, contributing to the growth of the active pharmaceutical ingredients market. The outsourcing trend is expected to continue as companies focus on reducing time to market and increasing innovation. 

The Active Pharmaceutical Ingredients (API) market is experiencing significant trends in various sectors. In formulation development, excipients play a crucial role, with companies like Chasse-sur-Rhône and NovasepPharmaZell Group leading the way. Teva Pharmaceutical and MEDinCell are making strides in Schizophrenia and chronic diseases research. Counterfeit drugs pose a threat, driving the need for increased investment in research and development. Infectious diseases, genetic disorders, cardiovascular diseases, and chronic disorders continue to be major focus areas. Biologics and biosimilars are on the rise, with CuraTeQ Biologics, Mendus AB, GenScript ProBio, and GeneCraft leading the charge. Key APIs include Acetaminophen, Artemisinin, Saxagliptin, Sodium Chloride, Ibuprofen, Losartan Potassium, Enoxaparin Sodium, Rufinamide, Naproxen, and Tamoxifen. Prescription drugs in Cardiology, CNS Neurology, and Oncology are over-clinical, with large molecule and small molecule APIs in high demand. Captive and merchant API manufacturers like Eurofins play essential roles in supplying these essential ingredients. Key APIs include Acetaminophen, Artemisinin, Saxagliptin, Sodium Chloride, Ibuprofen, Losartan Potassium, Enoxaparin Sodium, Rufinamide, Naproxen, and Tamoxifen. The market for prescription drugs in Cardiology, CNS Neurology, and Oncology remains over-clinical, with large molecule and small molecule APIs in high demand. Captive and merchant API manufacturers like Eurofins play essential roles in supplying these essential ingredients. Some of the major APIs in focus are Acetaminophen, Artemisinin, Saxagliptin, Sodium Chloride, Ibuprofen, Losartan Potassium, Enoxaparin Sodium, Rufinamide, Naproxen, and Tamoxifen. The market for prescription drugs in Cardiology, CNS Neurology, and Oncology remains over-clinical, with large molecule and small molecule APIs in high demand. Captive and merchant API manufacturers like Eurofins play essential roles in supplying these essential ingredients. In the API market, trends include a focus on excipients, biologics and biosimilars, and a continued emphasis on research and development to combat counterfeit drugs and address the needs of chronic diseases such as Schizophrenia, infectious diseases, genetic disorders, cardiovascular diseases, and chronic disorders. Key APIs include Acetaminophen, Artemisinin, Saxagliptin, Sodium Chloride, Ibuprofen, Losartan Potassium, Enoxaparin Sodium, Rufinamide, Naproxen, and Tamoxifen, with applications in prescription drugs for Cardiology, CNS Neurology, and Oncology. Captive and merchant API manufacturers like Eurofins play essential roles in supplying these ingredients. 

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Market Challenges

• The Active Pharmaceutical Ingredients (API) market faces significant challenges in various therapeutic areas. In oncology, biosimilars are disrupting the market, leading to price pressure and increased competition. Cancer research continues to drive demand for APIs in oncology drugs. Diabetes is another major therapeutic area, with APIs for insulins and oral medications in high demand. CuraTeQ Biologics, Mendus AB, GenScript ProBio, GeneCraft, NovasepPharmaZell Group, Eurofins, and others are key players in the market. Small molecule APIs like Acetaminophen, Ibuprofen, Losartan Potassium, and Naproxen continue to dominate, but large molecule APIs for Prescription Drugs in Cardiology, CNS Neurology, Oncology, Orthopedic, Endocrinology, Pulmonology, Nephrology, Ophthalmology, and other therapeutic applications are gaining popularity. Captive API Manufacturers and Merchant API Manufacturers must navigate these challenges to meet the demand for APIs in a competitive and evolving market. Some notable APIs include Artemisinin for Malaria treatment, Saxagliptin for Diabetes, Sodium Chloride for various applications, Enoxaparin Sodium for Anticoagulation, Rufinamide for Epilepsy, and Tamoxifen for Breast Cancer. Over clinical trials and regulatory approvals are crucial for bringing new APIs to market.

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Segment Overview 

This active pharmaceutical ingredients market report extensively covers market segmentation by  

• 1.1 Captive APIs
• 1.2 Contract APIs

• 2.1 Innovative APIs
• 2.2 Generic APIs

• 3.1 Asia
• 3.2 North America
• 3.3 Europe
• 3.4 Rest of World (ROW)

1.1 Captive APIs-  The captive API manufacturing segment holds the largest share in the global Active Pharmaceutical Ingredients (API) market due to the increasing development of biopharmaceutical products and the emphasis on quality control. The healthcare industry's focus on affordable healthcare services has driven the demand for low-cost APIs, leading some innovators to outsource to Contract Manufacturing Organizations (CMOs). However, the expiry of patents on blockbuster drugs has slowed down the growth of the API market for these drugs. In contrast, the API market for generic drugs is booming due to the increasing production capacity. The development of biopharmaceutical products requires significant investment and the risk of financial loss due to small variations in APIs, making in-house capabilities essential for innovators. Regulatory authorities' emphasis on quality control further increases the dependency on in-house API manufacturing. Major pharmaceutical companies, such as Pfizer, Novartis, Sanofi, and GlaxoSmithKline Plc, are investing in in-house API capabilities to drive the growth of the captive API segment and expand the global API market.

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Research Analysis

The Active Pharmaceutical Ingredients (API) market encompasses the production and supply of Excipients, the non-active components used in pharmaceutical formulations, and the Active Pharmaceutical Ingredients themselves. These substances play a crucial role in the therapeutic effect of medicines. The market caters to various therapeutic areas such as Chasse-sur-Rhône for Schizophrenia, Chronic diseases, Infectious diseases, Genetic disorders, Cardiovascular diseases, and Chronic disorders. The market is driven by research and investment in Biologics, Biosimilars, Cancer, Oncology drug research, Diabetes, Small Molecule, and Large Molecule APIs. The market also addresses the challenge of Counterfeit drugs, ensuring the production of high-quality APIs. Notable sub-segments include Captive API Manufacturer and Merchant API Manufacturer. Examples of APIs include Acetaminophen, Artemisinin, and many others used in treating diverse medical conditions.

Market Research Overview

The Active Pharmaceutical Ingredients (API) market encompasses the production and supply of Excipients, the non-active components used in pharmaceutical formulations, and APIs, the essential substances that provide therapeutic effects. The market caters to various therapeutic areas such as Schizophphrenia, Chronic diseases, Infectious diseases, Genetic disorders, Cardiovascular diseases, and Chronic disorders. APIs are integral to Biologics, Biosimilars, and Oncology drug research, including for treatments in Cardiology, CNS Neurology, Oncology, Orthopedic, Endocrinology, Pulmonology, Nephrology, Ophthalmology, and other therapeutic applications. Key challenges in the market include counterfeit drugs, lack of demand, and regulatory compliance. Notable APIs include Acetaminophen, Artemisinin, Saxagliptin, Sodium Chloride, Ibuprofen, Losartan Potassium, Enoxaparin Sodium, Rufinamide, Naproxen, Tamoxifen, and Prescription Drugs like Over-the-counter (OTC) and Clinical trial drugs. Major players in the market include Captive API Manufacturers and Merchant API Manufacturers. Some notable companies are Chasse-sur-Rhône, Teva Pharmaceutical, MEDinCell, Schizophrenia, CuraTeQ Biologics, Mendus AB, GenScript ProBio, GeneCraft, NovasepPharmaZell Group, and Eurofins. APIs are used in the production of Small Molecule and Large Molecule drugs, with key examples being Acetaminophen (Small Molecule) and Biologics (Large Molecule). Other significant APIs include Artemisinin (Antimalarial), Saxagliptin (Diabetes), Sodium Chloride (Pharmaceutical Excipient), Ibuprofen (Analgesic), Losartan Potassium (Antihypertensive), Enoxaparin Sodium (Anticoagulant), Rufinamide (Anticonvulsant), Naproxen (Analgesic), and Tamoxifen (Antiestrogen). The market is driven by research and investment in various therapeutic areas, including Cancer, Oncology drug research, and Diabetes. Key diseases targeted include Schizophrenia, Chronic diseases, Infectious diseases, Genetic disorders, Cardiovascular diseases, and Chronic disorders. Some notable APIs in the market include Acetaminophen (Analgesic and Antipyretic), Artemisinin (Antimalarial), Saxagliptin (Diabetes), Sodium Chloride (Pharmaceutical Excipient), Ibuprofen (Analgesic and Anti-inflammatory), Losartan Potassium (Antihypertensive), Enoxaparin Sodium (Anticoagulant), Rufinamide (Anticonvulsant), Naproxen (Analgesic and Anti-inflammatory), and Tamoxifen (Antiestrogen). The market is segmented into Small Molecule and Large Molecule APIs. Small Molecule APIs are typically synthesized using chemical reactions, while Large Molecule APIs are produced using biotechnological processes. The market is also influenced by various factors such as regulatory compliance, counterfeit drugs, and the shift towards personalized medicine and biosimilars. Regulatory compliance is crucial in ensuring the safety and efficacy of APIs, while the rise of counterfeit drugs poses a significant challenge to market growth. The shift towards personalized medicine and biosimilars is expected to create new opportunities for API manufacturers. Some notable companies in the market include Chasse-sur-Rhône, Teva Pharmaceutical, MEDinCell, Schizophrenia, CuraTeQ Biologics, Mendus AB, GenScript ProBio, GeneCraft, NovasepPharmaZell Group, and Eurofins. Chasse-sur-Rhône is a leading player in the API market, with a focus on the production of Small Molecule APIs. Teva Pharmaceutical is another major player, with a strong presence in both Small Molecule and Large Molecule APIs. MEDinCell specializes in the production of Large Molecule APIs, while Schizophrenia focuses on the development and production of APIs for the treatment of Schizophrenia and other CNS disorders. CuraTeQ Biologics, Mendus AB, GenScript ProBio, GeneCraft, and NovasepPharmaZell Group are other notable players in the market, with a focus on the production of Large Molecule APIs. Eurofins is a leading provider of contract research services, including API development and manufacturing. The market for APIs is expected to grow significantly in the coming years, driven by research and investment in various therapeutic areas, including Cancer, Oncology drug research, and Diabetes. The increasing prevalence of chronic diseases, such as cardiovascular diseases and diabetes, is also expected to fuel market growth. Some notable APIs in the market include Acetaminophen, Artemisinin, Saxagliptin, Sodium Chloride, Ibuprofen, Losartan Potassium, Enoxaparin Sodium, Rufinamide, Naproxen, and Tamoxifen. Acetaminophen is a widely used analgesic and antipyretic, while Artemisinin is an essential component in the treatment of malaria. Saxagliptin is a popular diabetes drug, while Sodium Chloride is a common pharmaceutical excipient. Ibuprofen is an analgesic and anti-inflammatory drug, while Losartan Potassium is an antihypertensive. Enoxaparin Sodium is an anticoagulant, Rufinamide is an anticonvulsant, Naproxen is an analgesic and anti-inflammatory drug, and Tamoxifen is an antiestrogen. The market for APIs is segmented into Small Molecule and Large Molecule APIs. Small Molecule APIs are typically synthesized using chemical reactions, while Large Molecule APIs are produced using biotechnological processes. Small Molecule APIs are typically less complex and can be produced in larger quantities, making them more cost-effective. However, they may have limited therapeutic effects and may require the use of multiple APIs to achieve the desired therapeutic outcome. Large Molecule APIs, on the other hand, are more complex and may require more specialized production processes. They are typically more expensive to produce but may offer more targeted therapeutic effects. The market for APIs is influenced by various factors, including regulatory compliance, counterfeit drugs, and the shift towards personalized medicine and biosimilars. Regulatory compliance is crucial in ensuring the safety and efficacy of APIs, while the rise of counterfeit drugs poses a significant challenge to market growth. The shift towards personalized medicine and biosimilars is expected to create new opportunities for API manufacturers. The market for APIs is expected to grow significantly in the coming years, driven by research and investment in various therapeutic areas, including Cancer, Oncology drug research, and Diabetes. The increasing prevalence of chronic diseases, such as cardiovascular diseases and diabetes, is also expected to fuel market growth. Some of the key challenges facing the API market include regulatory compliance, counterfeit drugs, and the shift towards personalized medicine and biosimilars. Regulatory compliance is crucial in ensuring the safety and efficacy of APIs, while the rise of counterfeit drugs poses a significant challenge to market growth. The shift towards personalized medicine and biosimilars is expected to create new opportunities for API manufacturers. Regulatory compliance is a major challenge for API manufacturers, as they must adhere to strict regulations to ensure the safety and efficacy of their products. This includes compliance with Good Manufacturing Practices (GMP) and Good Laboratory Practices (GLP), as well as regulatory requirements for the registration and approval of APIs. Counterfeit drugs are another significant challenge for the API market, as they can pose a risk to patient safety and undermine the credibility of legitimate API manufacturers. Counterfeit drugs may contain substandard or contaminated APIs, which can lead to adverse reactions or ineffective treatments. The shift towards personalized medicine and biosimilars is expected to create new opportunities for API manufacturers, as these treatments require the production of more complex APIs. Personalized medicine and biosimilars offer more targeted therapeutic effects and can reduce the cost of treatments, making them more accessible to patients. Some of the key trends in the API market include the increasing use of biotechnological processes for the production of Large Molecule APIs, the growing demand for biosimilars and personalized medicines, and the increasing focus on regulatory compliance and quality control. The increasing use of biotechnological processes for the production of Large Molecule APIs is a significant trend in the market, as these processes offer more targeted therapeutic effects and can reduce the production costs of complex APIs. Biotechnological processes involve the use of living organisms or cells to produce APIs, which can result in more complex and effective therapeutic agents. The growing demand for biosimilars and personalized medicines is another key trend in the API market, as these treatments offer more targeted therapeutic effects and can reduce the cost of treatments. Biosimilars are generic versions of biologic drugs, while personalized medicines are tailored to the individual needs of patients based on their genetic makeup or other factors. The increasing focus on regulatory compliance and quality control is also a significant trend in the API market, as regulatory agencies continue to tighten their requirements for the safety and efficacy of APIs. This includes the implementation of stricter GMP and GLP regulations, as well as the use of advanced technologies for quality control and testing. In conclusion, the API market is a dynamic and growing industry, driven by research and investment in various therapeutic areas and the increasing prevalence of chronic diseases. The market is segmented into Small Molecule and Large Molecule APIs, with each offering unique advantages and challenges. The market is influenced by various factors, including regulatory compliance, counterfeit drugs, and the shift towards personalized medicine and biosimilars. The increasing use of biotechnological processes for the production of Large Molecule APIs, the growing demand for biosimilars and personalized medicines, and the increasing focus on regulatory compliance and quality control are some of the key trends in the market.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Manufacturing Type
• Captive APIs
• Contract APIs
• Type
• Innovative APIs
• Generic APIs
• Geography
• Asia
• North America
• Europe
• Rest Of World (ROW)

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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