The global active pharmaceutical ingredients (API) market size reached US$ 222.9 Billion in 2022. Looking forward, IMARC Group expects the market to reach US$ 303.9 Billion by 2028, exhibiting a growth rate (CAGR) of 5.6% during 2023-2028.
Active pharmaceutical ingredient (API), is the term that is used to refer to the biologically active component of a drug (e.g. tablet, capsule). A drug is usually composed of several components. The API represents the primary ingredient. Other ingredients are commonly known as "excipients. Sometimes a drug can contain several APIs and its effect on a patient depends on the dosage prescribed and can vary from person to person. In combination therapies, two or more than two active ingredients are used to treat different symptoms in different ways. Stringent quality control is a mandate when it comes to the manufacturing of drugs as the API represents the main component considered while making the prescription.
Pharmaceutical manufacturing occurs in two general steps. In the first step, manufacturers convert raw materials into APIs. The second step involves creating the final formulation by mixing APIs and excipients into tablets, capsules, solutions, etc. and finally packaging the drug for the end users. Manufacturers either sell APIs in the open market (also known as the merchant market) or use them as inputs to make their final formulations. The global API market is extremely competitive with a number of large and small manufacturers. Firms that engage in API manufacturing generally specialize and target their manufacturing based on a combination of the firms in-house skills and market opportunities. Catalyzed by lower costs, API manufacturing has gradually been shifting from the historical leaders in Western countries to manufacturers based in India and China.
The global demand of APIs is currently exhibiting strong growth. One of the major drivers of this market is the rising number of blockbuster patent expiries creating a significant opportunity for generic APIs. Moreover, there has been a strong demand for APIs for biologicals. The global market for biologicals is currently exhibiting strong growth catalyzed by their high potency and ability to treat diseases beyond the scope of small molecule drugs. This is creating a strong demand for APIs for branded biological drugs and their biosimilar versions. Other factors catalyzing the global demand of APIs include ageing population, rising expenditures on healthcare, increasing prevalence of lifestyle diseases, etc.
Key Market Segmentation:
IMARC Group provides an analysis of the key trends in each sub-segment of the global active pharmaceutical ingredients (API) market report, along with forecasts at the global, regional and country level from 2023-2028. Our report has categorized the market based on drug type, type of manufacturer, type of synthesis and therapeutic application.
Breakup by Drug Type:
Innovative Active Pharmaceutical Ingredients (API)
Generic Active Pharmaceutical Ingredients (API)
Based on the drug type, the market has been segmented as innovative active pharmaceutical ingredients and generic active pharmaceutical ingredients.
Breakup by Type of Manufacturer:
Merchant API Manufacturers
Innovative Merchant API Manufacturers
Generic Merchant API Manufacturers
Based on the type of manufacturer, the market has been segmented as captive manufacturers and merchant API manufacturers.
Breakup by Type of Synthesis:
Synthetic Active Pharmaceutical Ingredients (API)
Market Breakup by Type
Innovative Synthetic APIs
Generic Synthetic APIs
Biotech Active Pharmaceutical Ingredients (API)
Market Breakup by Type
Innovative Biotech APIs
Market Breakup By Product
Market Breakup By Expression System
Mammalian Expression Systems
Microbial Expression Systems
Yeast Expression Systems
Transgenic Animal Systems
Based on the type of synthesis, the market has been segmented as synthetic active pharmaceutical ingredients and biotech active pharmaceutical ingredients.
Breakup by Therapeutic Application:
Cardiovascular and Respiratory
Central Nervous System Disorders
Based on the therapeutic application, the market has been segmented as oncology, cardiovascular & respiratory, diabetes, central nervous system disorders, neurological disorders and others.
Breakup by Region:
Middle East and Africa
Region-wise, the market has been segmented into North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.
The competitive landscape of the market has also been examined with some of the (active pharmaceutical ingredients companies) key players being Pfizer, Inc., Novartis International AG, Sanofi, Boehringer Ingelheim, Bristol-Myers Squibb, Teva Pharmaceutical Industries Ltd., ELI Lilly and Company, GlaxoSmithKline, Merck & Co., Inc. and Abbvie Inc.
Base Year of the Analysis
Drug Type, Type of Manufacturer, Type of Synthesis, Therapeutic Application, Region
Asia Pacific, Europe, North America, Latin America, Middle East and Africa
United States, Canada, Germany, France, United Kingdom, Italy, Spain, Russia, China, Japan, India, South Korea, Australia, Indonesia
Pfizer, Inc., Novartis International AG, Sanofi, Boehringer Ingelheim, Bristol-Myers Squibb, Teva Pharmaceutical Industries Ltd., ELI Lilly and Company, GlaxoSmithKline, Merck & Co., Inc. and Abbvie Inc.
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Key Questions Answered in This Report
The active pharmaceutical ingredient market is massively growing on a global level. As per the IMARC Group, the active pharmaceutical ingredient market size was around US$ 222.9 Billion in 2022. The growing prevalence of chronic diseases, along with the expanding geriatric population, is primarily driving the active pharmaceutical ingredient market. Moreover, several policies by the government bodies to increase the expenditure on overall healthcare of individuals are further augmenting the market growth. Additionally, extensive R&D activities by the leading pharmaceutical manufacturers to produce better-quality APIs that have a direct effect on the safety and efficacy of the drug are also propelling the product demand on a global level. Besides this, the elevating adoption of APIs in biological drugs that exhibit high potency and ability to treat diseases beyond the range of small molecule medications will continue to bolster the market growth in the coming years.
We expect the global Active Pharmaceutical Ingredients (API) market to exhibit a CAGR of 5.6% during 2023-2028.
Active pharmaceutical ingredient (API) represents biologically/synthetically active component of a finished pharmaceutical product. It is produced by various processes, such as recombinant DNA, fermentation, chemical synthesis, isolation, and recovery from natural sources. It has a direct effect on correcting, restoring, or modifying the physiological functions of the body. As a result, API has widespread applications in the pharmaceutical industry pertaining to central nervous system disorders, diabetes, cancer, neurological conditions, cardiovascular ailments, respiratory illnesses, etc.
The rising prevalence of numerous chronic diseases, along with the growing number of clinical trials by various research centers and scientific laboratories, is primarily driving the global Active Pharmaceutical Ingredients (API) market.
The sudden outbreak of the COVID-19 pandemic has led to the widespread adoption of Active Pharmaceutical Ingredients (API), owing to the increasing need for effective treatments and pharmaceutical drugs against the coronavirus infection.
Based on the drug type, the global Active Pharmaceutical Ingredients (API) market has been divided into innovative Active Pharmaceutical Ingredients (API) and generic Active Pharmaceutical Ingredients (API), where innovative Active Pharmaceutical Ingredients (API) currently exhibit a clear dominance in the market.
Based on the type of manufacturer, the global Active Pharmaceutical Ingredients (API) market can be categorized into captive manufacturers and merchant API manufacturers. Currently, captive manufacturers account for the majority of the global market share.
Based on the type of synthesis, the global Active Pharmaceutical Ingredients (API) market has been segregated into synthetic Active Pharmaceutical Ingredients (API) and biotech Active Pharmaceutical Ingredients (API), where synthetic Active Pharmaceutical Ingredients (API) currently hold the largest market share.
Based on the therapeutic application, the global Active Pharmaceutical Ingredients (API) market can be bifurcated into oncology, cardiovascular and respiratory, diabetes, central nervous system disorders, neurological disorders, and others. Among these, oncology exhibits a clear dominance in the market.
On a regional level, the market has been classified into North America, Europe, Asia Pacific, Latin America, and Middle East and Africa, where North America currently dominates the global market.
Currently, China is the largest producer of APIs in the world. Moreover, the Chinese manufacturers make around 40% of all APIs used worldwide. Also, China and India are the source of 75% to 80% of the APIs imported by the US. Additionally, some of the leading players in the pharmaceutical API manufacturing market are Teva Pharmaceutical Industries Ltd., Sun Pharmaceutical Industries Ltd., Boehringer Ingelheim, Aurobindo Pharma, Novartis AG, amongst others.
Some of the major players in the global Active Pharmaceutical Ingredients (API) market include Pfizer, Inc., Novartis International AG, Sanofi, Boehringer Ingelheim, Bristol-Myers Squibb, Teva Pharmaceutical Industries Ltd., ELI Lilly and Company, GlaxoSmithKline, Merck & Co., Inc., and Abbvie Inc.
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