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Active Pharmaceutical Ingredient Market - Global Industry, Analysis, Size, Share, Growth, Trends, and Forecasts 2023-2030

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 –

  • AbbVie
  • Pfizer
  • Merck & Co
  • Sanofi
  • Novartis
  • Teva Pharmaceutical industry
  • Eli Lilly and Company
  • Teva Pharmaceutical Industries
  • Bristol-Myers Squibb

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

  • In October 2023 Kotak strategic situation fund plans to invest around US$1924 million in active pharmaceutical ingredient business.
  • In January 2022 Biophore Pharmaceuticals received licence from the Medicines Patent Pool (MPP). The license is applicable for both active pharmaceutical ingredients and finished products in capsule form.
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Research Methodology: Aspects

Market research is a crucial tool for organizations aiming to navigate the dynamic landscape of customer preferences, business trends, and competitive landscapes. At Cognizance Market Research, acknowledging the importance of robust research methodologies is vital to delivering actionable insights to our clientele. The significance of such methodologies lies in their capability to offer clarity in complexity, guiding strategic management with realistic evidence rather than speculation. Our clientele seek insights that excel superficial observations, reaching deep into the details of consumer behaviours, market dynamics, and evolving opportunities. These insights serve as the basis upon which businesses craft tailored approaches, optimize product offerings, and gain a competitive edge in an ever-growing marketplace.

The frequency of information updates is a cornerstone of our commitment to providing timely, relevant, and accurate insights. Cognizance Market Research adheres to a rigorous schedule of data collection, analysis, and distribution to ensure that our reports reflect the most current market realities. This proactive approach enables our clients to stay ahead of the curve, capitalize on emerging trends, and mitigate risks associated with outdated information.

Our research process is characterized by meticulous attention to detail and methodological rigor. It begins with a comprehensive understanding of client objectives, industry dynamics, and research scope. Leveraging a combination of primary and secondary research methodologies, we gather data from diverse sources including surveys, interviews, industry reports, and proprietary databases. Rigorous data analysis techniques are then employed to derive meaningful insights, identify patterns, and uncover actionable recommendations. Throughout the process, we remain vigilant in upholding the highest standards of data integrity, ensuring that our findings are robust, reliable, and actionable.

Key phases involved in in our research process are mentioned below:


Understanding Clients’ Objectives:

Extensive Discussions and Consultations:

  • We initiate in-depth discussions and consultations with our clients to gain a comprehensive understanding of their objectives. This involves actively listening to their needs, concerns, and aspirations regarding the research project.
  • Through these interactions, we aim to uncover the underlying motivations driving their research requirements and the specific outcomes they hope to achieve.

Industry and Market Segment Analysis:

  • We invest time and effort in comprehensively understanding our clients’ industry and market segment. This involves conducting thorough research into market trends, competitive dynamics, regulatory frameworks, and emerging opportunities or threats.
  • By acquiring a deep understanding of the broader industry landscape, we can provide context-rich insights that resonate with our clients’ strategic objectives.

Target Audience Understanding:

  • We analyze our clients’ target audience demographics, behaviors, preferences, and needs to align our research efforts with their consumer-centric objectives. This entails segmenting the audience based on various criteria such as age, gender, income level, geographic location, and psychographic factors.
  • By understanding the nuances of the target audience, we can tailor our research methodologies to gather relevant data that illuminates consumer perceptions, attitudes, and purchase intent.


Identifying Challenges and Opportunities:

  • We proactively identify the challenges and opportunities facing our clients within their respective industries. This involves conducting SWOT (Strengths, Weaknesses, Opportunities, Threats) analyses and competitive benchmarking exercises.
  • By identifying potential obstacles and growth drivers, we can provide strategic recommendations that help our clients navigate complexities and capitalize on emerging opportunities effectively.

Grasping Specific Goals:

  • We delve into the intricacies of our clients’ objectives to gain clarity on the specific goals they aim to accomplish through the research. This entails understanding their desired outcomes, such as market expansion, product development, or competitive analysis.
  • By gaining a nuanced understanding of our clients’ goals, we can tailor our research approach to address their unique challenges and opportunities effectively.

Data Collection:


Primary Research Process:

  • Surveys: We design and administer surveys tailored to capture specific information relevant to our clients’ objectives. This may involve employing various survey methodologies, such as online, telephone, or face-to-face interviews, to reach target audiences effectively.
  • Interviews: We conduct structured or semi-structured interviews with key stakeholders, industry experts, or target consumers to gather in-depth insights and perspectives on relevant topics. These interviews allow us to probe deeper into specific issues and uncover valuable qualitative data.
  • Focus Groups: We organize focus group discussions with carefully selected participants to facilitate interactive discussions and gather collective opinions, attitudes, and preferences. This qualitative research method provides rich contextual insights into consumer behaviors and perceptions.
  • Observations: We conduct observational research by directly observing consumer behaviors, interactions, and experiences in real-world settings. This method enables us to gather objective data on consumer actions and reactions without relying on self-reported information.

Secondary Research Process:

  • Literature Review: We conduct comprehensive literature reviews to identify existing studies, academic articles, and industry reports relevant to the research topic. This helps us gain insights into previous research findings, theoretical frameworks, and best practices.
  • Industry Reports: We analyze industry reports published by reputable trade associations (whitepapers, research studies, etc.), and government agencies (U.S. Census Bureau, Bureau of Labor Statistics, and Securities and Exchange Commission etc.) to obtain macro-level insights into market trends, competitive landscapes, and industry dynamics.
  • Government Publications: We review government publications, such as economic reports, regulatory documents, and statistical databases, to gather relevant data on demographics, market size, consumer spending patterns, and regulatory frameworks.
  • Online Databases: We leverage online databases, such as industry portals, and academic repositories (PubMed Central (PMC), ScienceDirect, SSRN (Social Science Research Network), Directory of Open Access Journals (DOAJ), NCBI, etc.), to access a wide range of secondary data sources, including market statistics, financial data, and industry analyses.



Data Analysis:

The data analysis phase serves as a critical juncture where raw data is transformed into actionable insights that inform strategic decision-making. Through the utilization of analytical methods such as statistical analysis and qualitative techniques like thematic coding, we uncover patterns, correlations, and trends within the data. By ensuring the integrity and validity of our findings, we strive to provide clients with accurate and reliable insights that accurately reflect the realities of the market landscape.


Transformation of Raw Data:

  • Upon collecting the necessary data, we transition into the data analysis phase, where raw data is processed and transformed into actionable insights. This involves organizing, cleaning, and structuring the data to prepare it for analysis.

Utilization of Analytical Methods:

  • Depending on the research objectives, we employ a diverse range of analytical methods to extract meaningful insights from the data. These methods include statistical analysis, trend analysis, regression analysis, and qualitative coding.

Statistical Analysis:

  • Statistical tools are instrumental in uncovering patterns, correlations, and trends within the data. By applying statistical techniques such as descriptive statistics, hypothesis testing, and multivariate analysis, we can discern relationships and derive valuable insights.

Qualitative Analysis Techniques:

  • In addition to quantitative analysis, we leverage qualitative analysis techniques to gain deeper insights from qualitative data sources such as interviews or open-ended survey responses. One such technique is thematic coding, which involves systematically categorizing and interpreting themes or patterns within qualitative data.

Integrity and Validity Maintenance:

  • Throughout the analysis process, we maintain a steadfast commitment to upholding the integrity and validity of our findings. This entails rigorous adherence to established methodologies, transparency in data handling, and thorough validation of analytical outcomes.

Data Validation:

The final phase of our research methodology is data validation, which is essential for ensuring the reliability and credibility of our findings. Validation involves scrutinizing the collected data to identify any inconsistencies, errors, or biases that may have crept in during the research process. We employ various validation techniques, including cross-referencing data from multiple sources, conducting validity checks on survey instruments, and seeking feedback from independent experts or peer reviewers. Additionally, we leverage internal quality assurance protocols to verify the accuracy and integrity of our analysis. By subjecting our findings to rigorous validation procedures, we instill confidence in our clients that the insights they receive are robust, reliable, and trustworthy.


Importance of Data Validation:

  • Data validation is the final phase of the research methodology, crucial for ensuring the reliability and credibility of the findings. It involves a systematic process of reviewing and verifying the collected data to detect any inconsistencies, errors, or biases.

Scrutiny of Collected Data:

  • The validation process begins with a thorough scrutiny of the collected data to identify any discrepancies or anomalies. This entails comparing data points, checking for outliers, and verifying the accuracy of data entries against the original sources.

Validation Techniques:

  • Various validation techniques are employed to ensure the accuracy and integrity of the data. These include cross-referencing data from multiple sources to corroborate findings, conducting validity checks on survey instruments to assess the reliability of responses, and seeking feedback from independent experts or peer reviewers to validate the interpretation of results.

Internal Quality Assurance Protocols:

  • In addition to external validation measures, internal quality assurance protocols are implemented to further validate the accuracy of the analysis. This may involve conducting internal audits, peer reviews, or data validation checks to ensure that the research process adheres to established standards and guidelines.
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