GVR Report cover Europe Active Pharmaceutical Ingredients (API) Market Size, Share & Trends Report

Europe Active Pharmaceutical Ingredients (API) Market Size, Share & Trends Analysis Report By Type Of Synthesis, By Type Of Manufacturer (Captive), By Type (Generic), By Application, By Type Of Drug, By Country, And Segment Forecast, 2023 - 2030

  • Report ID: GVR-4-68040-064-0
  • Number of Pages: 130
  • Format: Electronic (PDF)
  • Historical Range: 2018 - 2021
  • Industry: Healthcare

Report Overview

The Europe active pharmaceutical ingredients (API) market size was estimated at USD 42.64 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 5.75% from 2023 to 2030. The market is primarily driven by advancements in developing active pharmaceutical ingredients (API), expansion in the biopharmaceutical industry, and the establishment of new advanced manufacturing facilities that support the production of complex products. For instance, in July 2022, Wacker invested over USD 110 million to expand its German facility by constructing a new mRNA Competence Center to manufacture active drug substances based on mRNA, such as mRNA coronavirus vaccines. The growing geriatric population is anticipated to propel the market growth. According to Eurostat, the average life expectancy of the European population is rising over 21.1% of the population was over 65 in 2022.

Germany API market size and growth rate, 2023 - 2030

To address the growing demand for API in the region, pharmaceutical companies and contract manufacturers are increasing their manufacturing capacity. Around 60.5% of the APIs used in Europe are domestically produced. Furthermore, other factors, such as the increasing government initiatives to support API technology development and the prevalence of chronic diseases, such as cardiovascular diseases and cancer, are anticipated to boost the market over the forecast period.

The COVID-19 epidemic has significantly impacted the world economy, and drastic impacts on the pharmaceutical sector were observed in 2020 and early 2021. Drugs, notably those prescribed for COVID-19 patients, saw an increase in demand during the pandemic's early phases. The demand for active pharmaceutical ingredients (APIs) subsequently increased in Europe and around the globe. However, the pandemic also caused disruptions in global supply chains, affecting APIs' production and distribution. Many European countries experienced shortages of active pharmaceutical ingredients and drugs due to supply chain disruptions, leading to an initiative from the governments to enhance domestic production of APIs to reduce reliance on imports from other countries.

The advances in technology & manufacturing processes and rising research & development activities in the pharmaceutical industry are driving Europe Active Pharmaceutical Ingredients (APIs) market. The API industry requires rigorous quality control standards to ensure that a specific drug is effective and safe. Technology has enabled the development of precise methods to analyze, including mass spectrometry and High-Performance Liquid Chromatography (HPLC), which helps manufacturers monitor the quality of the active ingredient during the manufacturing process.

The regulatory requirements for active pharmaceutical ingredient production in Europe are stringent as compared to other regions, which leads to a higher cost of compliance. In addition, the shortage of skilled labor and advanced technological equipment use further drives the cost of the production of APIs. However, several companies are either merging or acquiring other European companies or establishing and investing in manufacturing plants for research & development of APIs, which can be further used to produce drugs. In April 2022, a European specialty API manufacturer, Bridgepoint-owned Pharmazell, merged with Novasep and adopted the antibody-drug conjugates and complex small molecule API competencies to strengthen its footprints in the region.

Type Of Synthesis Insights

The synthetic segment dominated the market with the largest revenue share of 70.4% in 2022. Compared to natural molecules, the segment's dominance is attributed to its ready availability. Synthetic molecules offer consistency in terms of quality, purity, and potency. The manufacturing process of synthetic molecules can be standardized, which ensures that every batch of active pharmaceutical ingredients produced is identical in composition and quality. Furthermore, they are cost-effective. This is because the manufacturing process for natural molecules can be complex and time-consuming, which makes them more expensive to produce. In addition, the rising demand for generic drugs further boosts the API market growth. APIs for generic drugs generate high revenue for chemical and synthetic API manufacturing companies.

On the other hand, Biotech is expected to expand with the highest CAGR of 6.5% during the forecast period. The growth of the biotech API segment can be attributed to high investments in the biotechnology and biopharmaceutical sectors. This allows the innovation of new molecules that aid in the treatment of diseases such as cancer. Pharma companies are aiming to invest in biologics and scale up production capacities to meet the rising demand for biotech API-based products, which, in turn, is expected to drive the market.

Type Of Manufacture Insights

The captive API segment dominated the market with the largest revenue share of 51.04% in 2022. The dominance is attributed due to high investment by market players to develop high-end manufacturing facilities. Captive APIs are often used by the major and bigger players in the market that have significant resources to invest in their infrastructure and technology. These organizations can create highly customized APIs that are tailored to their specific needs and can integrate them seamlessly with their products, manufacturing systems, and processes. Furthermore, captive APIs offer greater control over the quality and supply chain of products allowing the companies with their own API manufacturing to integrate backward and reduce reliance on suppliers.

The merchant API segment is anticipated to demonstrate the fastest growth rate over the forecast period, with a CAGR of 7.68%. Captive production of APIs is expensive; pharmaceutical manufacturing companies have initiated outsourcing of active pharmaceutical ingredients production to minimize expenses and eliminate the need for investing in expensive equipment and sophisticated infrastructure. The outsourcing trend is a major factor influencing the growth of regional contract manufacturers, such as Seqens.

Type Insights

The generic API segment dominated the market, accounting for the largest revenue share of 56.23% in 2022. The market is anticipated to expand at the fastest CAGR of 7.39% over the forecast period, attributable to the cost-effectiveness of generic APIs when compared to branded APIs, and thus aids in the reduction of cost for developing and manufacturing pharmaceutical products. Moreover, the patent expiry of branded molecules is a key factor that can be attributed to the lucrative growth of generic API-based drugs. As per European Fine Chemicals Group, Europe's major generic API manufacturing countries are Spain and Italy, with over 350 small- and large-scale companies in the region. These factors has helped to drive the growth of the generic API market in the region.

The innovative API segment is projected to show lucrative growth over the forecast period. These molecules are developed through a lengthy process that involves extensive research, testing, and clinical trials to determine their safety and effectiveness. Factors such as increasing demand for new and more effective treatments, advancements in technology and research, and growing investments in research and development by pharmaceutical companies drive the growth of innovative APIs.

Application Insights

The cardiology segment dominated the market in 2022 with a revenue share of 21.40% owing to the high prevalence of cardiovascular diseases and the increase in product availability. The prevalence of cardiovascular disorders is increasing due to several factors, such as lifestyle changes, obesity, and excessive alcohol use. Thus, early detection and effective treatment are crucial to reduce mortality. Europe has a highly advanced healthcare infrastructure, with well-equipped hospitals and clinics. This has led to increased adoption of advanced cardiovascular disease treatments, which has driven the demand for APIs and pharmaceuticals used in these treatments.

The oncology segment is anticipated to expand with the fastest CAGR of 7.41% over the forecast period owing to the rising prevalence of cancer in Europe. According to the ESMO report, 1.2 million people worldwide are projected to die from cancer in 2023. Several companies have been investing heavily in R&D to create medications that are tailored to novel biomarkers. The presence of various APIs in the marketplace for different types of cancer is expected to drive the segment growth further. Some oncology active pharmaceutical ingredients are Imatinib by Novartis AG and Trastuzumab, Bevacizumab, & Rituximab by F. Hoffmann-La Roche Ltd.

Type Of Drug Insights

The prescription segment held the largest share of 78.32% in 2022. The dominance of this segment can be attributed to Europe’s stringent regulations for pharmaceuticals, including APIs. Prescription drugs require higher regulation and oversight levels than over-the-counter (OTC) drugs. These regulations ensure that the drugs are safe and effective, which helps to build trust among healthcare providers and patients.

Moreover, prescription drugs dominate the market in the oncology segment. Cancer is primarily treated using chemotherapy, immunotherapy, targeted therapy, and hormonal therapy. The number of prescriptions generated for targeted therapies is increasing rapidly, owing to the higher efficacy of novel targeted therapies. Major players are launching novel targeted therapies. For instance, in March 2021, Novartis announced the approval of ofatumumab in Europe, a unique product used to treat multiple sclerosis and can be self-administered.

Europe API market share and size, 2022

The OTC segment is expected to expand with the fastest CAGR of 5.84% over the forecast period. The OTC segment is expected to continue growing in the coming years as more consumers seek self-care solutions for their health needs. However, consumers need to consult their healthcare provider before taking any OTC medication to ensure that it is safe and effective for their specific health conditions.

Country Insights

Germany dominated the Europe API market with the largest market share of 18.24% in 2022. Germany's robust and well-established pharmaceutical industry has been operating for many years. The country has many pharmaceutical companies that manufacture APIs, with a strong reputation for producing high-quality active pharmaceutical ingredients. The presence of key market players in Germany and an increasing focus on geographic expansion with product launches drive the API market in Germany. For instance, in May 2020, Evonik invested approximately USD 30 million to expand the capacity of its German API facility to meet the region's future API demands. Germany is considered a leader in API production in Europe. However, the country relies on Asia for 63% of its API raw material requirements. In February 2021, BioNTech announced its new production facility for mRNA, which is used as an API in COVID-19 vaccines in Marburg, Germany.

Spain is expected to grow with the fastest CAGR of 7.03% over the forecast period. Spain’s pharmaceutical sector has continued to receive major investments, which is anticipated to influence the API market positively. Moreover, in May 2021, Sandoz invested USD 150 million to expand its production site in Palafolls, Spain.

Key Companies & Market Share Insights

The market for active pharmaceutical ingredients operates with high complexity. Blockbuster drug patent expiration, increasing outsourcing activities due to high manufacturing costs, and stringent regulations on the production of APIs are expected to maintain the competitive rivalry at a high level during the forecast period. Companies are focusing on investment and expansion of active pharmaceutical ingredients manufacturing units to meet the market demand. For instance, Sanofi set up its manufacturing facility EuroAPI as the new industry-leading European API company; the manufacturing facility is projected to have over a billion in revenue in upcoming years. Some of the key players in the Europe active pharmaceutical ingredients market include:

  • Cipla, Inc.

  • Merck & Co., Inc.

  • Boehringer Ingelheim International GmbH

  • Sun Pharmaceutical Industries Ltd.

  • AbbVie, Inc.

  • Bristol-Myers Squibb Company

  • Teva Pharmaceutical Industries Ltd.

  • Albemarle Corporation

  • Aurobindo Pharma

  • Viatris Inc.

Recent Developments

  • In May 2023, Boehringer Ingelheim and German Chancellor Olaf Scholz announced the construction of a new Chemical Innovation Plant at the company’s headquarters in Ingelheim, Germany. This facility was planned to develop and produce active pharmaceutical ingredients.

  • In June 2022, MilliporeSigma, the Life Science business of Merck KGaA, doubled the production capacity of its high-potent active pharmaceutical ingredients (HPAPI) with the expansion of its facility in Verona. This expansion was aimed at allowing the company to meet the growing demand for HPAPI, a key cancer treatment component. 

Europe API Market Report Scope

Report Attribute


Market size value in 2023

USD 45.4 billion

Revenue forecast in 2030

USD 66.7 billion

Growth rate

CAGR of 5.75% from 2023 to 2030

Base year for estimation


Historical data

2018 - 2021

Forecast period

2023 - 2030

Quantitative units

Revenue in USD billion, and CAGR from 2023 to 2030

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Type of synthesis, type of manufacturer, type, type of drug, application, country

Regional scope


Country scope

Germany; UK; France; Italy; Spain; Russia; Hungary; Denmark; Poland; Sweden; Switzerland; Portugal; Greece

Key companies profiled

Merck & Co., Inc.; AbbVie, Inc.; Bristol-Myers Squibb Company; Boehringer Ingelheim International GmbH, Cipla, Inc.; Teva Pharmaceutical Industries Ltd.; Albemarle Corporation; Viatris Inc.; Aurobindo Pharma; Sun Pharmaceutical Industries Ltd.

Customization scope

Free report customization (equivalent up to 8 analyst’s working days) with purchase. Addition or alteration to country, regional & segment scope.

Pricing and purchase options

Avail of customized purchase options to meet your exact research needs. Explore purchase options


Europe Active Pharmaceutical Ingredients (API) Market Report Segmentation

This report forecasts revenue growth at regional and country levels and provides an analysis on the latest trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the Europe API market report based on the type of synthesis, type of manufacturer, type, type of drug, application, and country.

  • Type of Synthesis Outlook (Revenue, USD Billion, 2018 - 2030)

    • Biotech

      • Biotech APIs Market, By Type (Revenue, USD Billion, 2018 - 2030)

        • Generic API

        • Innovative API

      • Biotech APIs Market, By Product (Revenue, USD Billion, 2018 - 2030)

        • Monoclonal Antibodies

        • Hormones

        • Cytokines

        • Recombinant Proteins

        • Therapeutic Enzymes

        • Vaccines

        • Blood Factors

    • Synthetic

      • Synthetic APIs Market, By Type (Revenue, USD Billion, 2018 - 2030)

        • Generic API

        • Innovative API

  • Type of Manufacturer Outlook (Revenue, USD Billion, 2018 - 2030)

    • Captive APIs

    • Merchant APIs

      • Merchant APIs Market, By Type (Revenue, USD Billion, 2018 - 2030)

        • Generic API

        • Innovative API

      • Merchant APIs Market, By Type of Synthesis (Revenue, USD Billion, 2018 - 2030)

        • Biotech

        • Synthetic

  • Type Outlook (Revenue, USD Billion, 2018 - 2030)

    • Generic API

    • Innovative API

  • Type of Drug (Revenue, USD Billion, 2018 - 2030)

    • Prescription Drugs

    • Over-the-counter (OTC) Drugs

  • Application Outlook (Revenue, USD Billion, 2018 - 2030)

    • Cardiovascular Diseases

    • Oncology

    • CNS and Neurology

    • Orthopedic

    • Endocrinology

    • Pulmonology

    • Gastroenterology

    • Nephrology

    • Ophthalmology

    • Others

  • Country Outlook (Revenue, USD Billion, 2018 - 2030)

    • U.K.

    • Germany

    • France

    • Italy

    • Spain

    • Russia

    • Hungary

    • Poland

    • Denmark

    • Sweden

    • Switzerland

    • Portugal

    • Greece

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