Every single medication is composed of two main components, one is excipient which includes the substance other than the drug and the other is an active pharmaceutical ingredient. Active Pharmaceutical Ingredients (APIs) are chemical-based compounds that have pharmacological activity mainly used with a combination of other ingredients to diagnose, cure, mitigate, and treat the disease. For example, an active ingredient used to relieve pain is included in a painkiller. In a biological drug, the active ingredient is known as bulk process intermediate. A small amount of active ingredient has an effect, so only a tiny part of the active ingredient is contained in the medicine. We will find the name of the active ingredient contained in medicine on the package of over-the-counter drugs. API and raw material are often confused due to the similar usage of the two terms. Raw material refers to chemical compounds that are used as bases to make an API. The API is not made by only one reaction from raw materials but rather it becomes API via several chemical compounds. The chemical compound that is in the process of becoming an API from raw material is called an intermediate. After long manufacturing processes, it is purified until it reaches a very high degree of purity and becomes an API.
Despite high manufacturing expenses, strict regulatory policies, and policies in controlling drug prices in many countries, attractive opportunities have emerged in the API market due to growing cases of chronic diseases, including diabetes, asthma, and cancer. Synthetic chemical API, constitute a large part of the pharmaceutical market, with many small molecule drugs commercially available in the market. Natural APIs are used in making biologics, which are increasingly becoming the top-selling drugs in the market.
Global Active Pharmaceutical Ingredient Market – Competitive Landscape
Valuations for API companies witness a surge as global biggies step up investments. Fuelled by an ‘Atmanirbhar’ push and growing preference for India-made pharmaceutical raw materials over Chinese, this API sector is in the spotlight for mergers and acquisitions. On October 6 2023 Amgen had completed the US$27.8 billion acquisition of Horizon Therapeutics. Attractive valuations, bright prospects, and certified plants make the API sector attractive for Indian and global investors.
Some of the key players in the Global Active Pharmaceutical Ingredient Market include –
Global Active Pharmaceutical Ingredient Market – Growth Drivers
The increasing prevalence of chronic disease could see the market for active pharmaceutical ingredients growing every year. According to National Center for Biotechnology Information (NCBI) this segment will grow at 9% per year in future. One of the major trends in healthcare is rising the proportion of older people in the population of many countries, accompanied by the growth in chronic diseases such as cancer and cardiovascular diseases which leads to high spending on healthcare, and drives up demand for APIs. The Global Active Pharmaceutical Ingredient Market includes adopting continuous manufacturing and delving into niche disease areas, research has indicated. Advancements in manufacturing technology, plus the availability of cost-effective treatment options are also influencing the sector. Advancements in manufacturing techniques and technologies have enabled large-scale production of high-quality APIs. These innovations have improved manufacturing efficiency and reduced costs. According to Press Information Bureau (PIB) the active pharmaceutical market includes a network of 3000 drug companies and 10,500 manufacturing units. It is projected to reach a value of US$ 130 billion by 2030.
Global Active Pharmaceutical Ingredient Market – Restraints
The increasing cost of crucial manufacturing input factors, such as energy, raw materials, and labor, has been a severe threat to less competitive producers. Many producers had reduced their base costs and increased their prices, which had the market even more competitive. The stringency of regulatory requirements may delay product approvals, also this increasing stringency is forcing low-quality manufacturers out of the market. API industry is a highly polluting industry, and due to this every company needs to make a change in the product mix, it needs fresh approval with the process takes 4 months which could be a deterrent for API manufacturers. The Russia-Ukraine war disrupted the chances of global economic recovery. The war between these two countries has led to economic sanctions on many of the countries, and supply chain disruptions, causing inflation across goods and services affecting many markets across the globe.
Global Active Pharmaceutical Ingredient Market – Opportunities
The growing demand for biologic drugs offers significant opportunities for API manufacturer. The development of different complex drugs requires advanced APIs, which can be lucrative niche. The patent for many brand drugs expires, so there is a continuous demand for generic APIs. Developing APIs for orphan drugs which treating rare diseases can be profitable due to less competition. Put into effect of data driven approaches and digital technologies can optimize API production and quality control.
Global Active Pharmaceutical Ingredient Market – Geographical Insight
Geographically, the market is segmented into North America, Europe, Asia Pacific, Latin America, Middle East, Europe and Africa. North America is the largest API market, the rising geriatric population and escalated exposure to chronic diseases such as cancer and diabetes have increased the API demand in the region. including both captive and merchant markets. Followed by Asia-Pacific is gaining ground. In Asia-Pacific, China is the largest generic API producer, with its domestic strength. According to National Center for Biotechnology Information (NCBI) the Asia-Pacific Global Active Pharmaceutical Ingredient Market is growing at 10-15% which is double the rate of G7 countries. In this India’s Global Active Pharmaceutical Ingredient Market is the 14th largest globally with an annual turnover of US$ 22 billion. Europe ranks second after Asia-Pacific in the supply of generic APIs on a global basis. Middle East is expected to be the fastest-growing region in the forecast period.
Global Active Pharmaceutical Ingredient Market – Key development
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