The global Active Pharmaceutical Ingredient (API) market size was valued at USD 158.15 billion in 2018 and is estimated to expand at a CAGR of 6.8% over the forecast years. Advancements in API manufacturing and growth of biopharmaceutical sector are expected to be the key factors driving the market. In addition, increasing geriatric population across the globe is also anticipated to contribute to the market growth.
Increasing prevalence of infectious diseases and Hospital-Acquired Infections (HAIs) are expected to fuel the market growth during the forecast period. Furthermore, rising number of cases of cardiovascular, neurological, and genetic disorders is expected to augment the growth further. Cardiovascular Diseases (CVDs) are the most prevalent cause of death across the globe.
According to the Canadian Patient Safety Institute (CPSI), annually around 8,000 patients in Canada die due to HAIs and approximately 220,000 patients are infected with such disease.Targeted therapy is gaining popularity as it only aims at cancerous cells. The characteristics, such as minimum effect of the drug on noncancerous cells, and effectiveness possessed by these anti-cancerous drugs are the factors contributing to the market growth.
API production requires huge capital amount as the process needs extremely systematic protocols. Thus, pharmaceutical companies can actually benefit from outsourcing the API production, as it eliminates the need for labor force and installing expensive manufacturing units. Strategic outsourcing allows companies to focus on their core competencies, ultimately resulting in an increased productivity. These factors are also projected to spur the market growth.
Based on type of synthesis, the market is segmented into biotech type and synthetic type. The biotech type is further classified into monoclonal antibodies, recombinant proteins, and vaccines. Synthetic segment led the overall market in 2018, in terms of revenue share, owing to easy availability of raw materials and simple procedures of synthesis. Biotech molecule was expected to be the fastest-growing application segment and is expected to register a CAGR of 7.5% during the forecast years. The segment growth is driven by factors, such as increasing demand for biopharmaceuticals and higher efficiency of these molecules. Moreover, technological advancements in the manufacturing processes will boost the growth further.
Based on the manufacturer type, the market is categorized into captive and merchant APIs. Captive segment held the largest share in 2018 owing to intensive capitalization of major key companies in development of high-end manufacturing facilities and availability of raw materials. Merchant API segment is expected to be the fastest-growing segment owing to factors, such as rising demand for biopharmaceuticals and high cost of in-house manufacturing of these molecules. In addition, since the captive production of APIs is expensive, companies have started opting for outsourcing.
Based on type, the market is segmented into generic and innovative APIs. Innovative drugs segment led the overall market in 2018 due to increased R&D initiatives for novel drug development and favorable government regulations. Rising number of new entrants in this segment is also expected to propel the market growth. Generic drug segment is estimated to be the second fastest-growing segment due to factors, such as patent expiry of branded drugs and lower cost. The segment is likely to witness growth in the developing regions like Brazil and India due to unmet clinical needs and high acceptance levels for OTC drugs.
Based on application, the market is segmented into cardiology, oncology, CNS & neurology, and endocrinology. Cardiology segment led the overall market in 2018 owing to the increasing prevalence of target diseases worldwide. According to the WHO, CVDs, particularly heart attack and stroke, account for around 17.5 million deaths across the globe. Cardiovascular disease is one of the global, critical public health burdens, responsible for extensive R&D for APIs in the field.
Oncology is expected to be the fastest-growing segment and is driven by factors, such as increasing lifestyle changes and rising prevalence of cancer. Moreover, extensive R&D for the development of drugs specific to novel biomarkers will spur the market growth. There are numerous APIs in the market for cancer treatment, some of which include Rituximab, Bevacizumab, and Trastuzumab by Roche and Imatinib by Novartis.
North America led the market in 2018 owing to technological advancements coupled with high economic development in the region. Increasing prevalence of cancer and other lifestyle-induced diseases is encouraging the R&D activities, thereby boosting the market growth. Asia Pacific is estimated to be the fastest-growing region over the forecast period. Availability of cheap labor and lenient regulatory framework are attracting foreign companies to set up manufacturing facilities in Asia Pacific.
Some of the key companies in the market are Teva Pharmaceutical Industries Ltd.; AbbVie, Inc.; Boehringer Ingelheim International GmbH; Cipla, Inc.; Merck & Co., Inc.; Bristol-Myers Squibb Company; Albemarle Corporation; Mylan N.V.; Aurobindo Pharma; Sun Pharmaceutical Industries Ltd.; and Dr. Reddy’s Laboratories Ltd. Most of these companies follow strategies, such as acquisitions and collaborations, to maintain their market position. For instance, in November 2016, Arrow Generiques SAS, a subsidiary of Aurobindo Pharma Ltd., acquired whole rights of Calcium Vitamin D3 and Calcium products from Teva Pharmaceutical Industries Ltd. in France.
Attribute |
Details |
Base year for estimation |
2018 |
Actual estimates/Historical data |
2014 - 2017 |
Forecast period |
2019 - 2026 |
Market representation |
Revenue in USD Billion and CAGR from 2019 to 2026 |
Regional scope |
North America, Europe, Asia Pacific, Latin America, and MEA |
Country scope |
U.S., Canada, Germany, U.K., Spain, France, Italy, Japan, China, India, South Korea, Australia, Brazil, Mexico, Argentina, and South Africa |
Report coverage |
Revenue forecast, company share, competitive landscape, growth factors and trends |
15% free customization scope (equivalent to 5 analyst working days) |
If you need specific information, which is not currently within the scope of the report, we will provide it to you as a part of customization |
This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2026. For the purpose of this study, Grand View Research has segmented the global Active Pharmaceutical Ingredient (API) market report on the basis of type of synthesis, type of manufacturers, type, application, and region:
Type of Synthesis Outlook (Revenue, USD Billion, 2014 - 2026)
Biotech
Monoclonal antibodies
Recombinant proteins
Vaccines
Synthetic
Type of Manufacturer Outlook (Revenue, USD Billion, 2014 - 2026)
Captive APIs
Merchant APIs
Type Outlook (Revenue, USD Billion, 2014 - 2026)
Generic APIs
Innovative APIs
Application Outlook (Revenue, USD Billion, 2014 - 2026)
Cardiology
Generic
Innovative
Oncology
Generic
Innovative
CNS & Neurology
Generic
Innovative
Orthopedic
Generic
Innovative
Endocrinology
Generic
Innovative
Pulmonology
Generic
Innovative
Gastroenterology
Generic
Innovative
Nephrology
Generic
Innovative
Ophthalmology
Generic
Innovative
Others
Regional Outlook (Revenue, USD Billion, 2014 - 2026)
North America
U.S.
Canada
Europe
Germany
U.K.
Spain
France
Italy
Asia Pacific
Japan
China
India
South Korea
Australia
Latin America
Mexico
Brazil
Argentina
MEA
South Africa
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