High Potency Active Pharmaceutical Ingredients Market Size, Share & Trends Analysis Report By Product (Synthetic, Biotech), By Manufacturer Type (In-house, Outsourced), By Drug Type, By Application, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global high potency active pharmaceutical ingredients market size was valued at USD 20.39 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 8.4% from 2021 to 2028. The increasing prevalence of cancer, the growing applications of high potency active pharmaceutical ingredients (HPAPIs), and the growth of targeted therapies are anticipated to accelerate the market growth in the forecast period. The demand for HPAPIs is continuously growing globally owing to the rise in cancer therapeutics. Cancer is considered one of the prominent health hazards due to the increasing number of people being affected by the disease. The cases of COVID-19 infections are rapidly growing and many countries have approved the use of antiviral drugs, which are high potency molecules. For instance, remdesivir has received approval for COVID-19. The drug is currently approved for the treatment of SARS-CoV-2 in the U.S., the U.K., India, Singapore, Israel, EU, Taiwan, and Japan.

Loss of exclusivity of key drugs is anticipated to be another factor supporting the growth of the market. For instance, by 2024, more than 27 cancer treatment molecules are likely to face a loss of exclusivity in many major markets. This includes multimillion revenue-generating drugs: Sutent by Pfizer, Inc. (in 2021) and Revlimid by Celgene (Bristol-Myers Squibb Company). This loss of exclusivity is anticipated to increase competition for developing molecules among other players entering the high potency APIs market.

Cancer remains a major cause of morbidity and mortality worldwide. The advent of highly potent medicines and treatments, such as precision medicine and targeted, tailor-made treatments is expected to increase treatment options. Chemotherapy has several side effects, such as it affects non-cancerous cells. Hence, targeted therapy is gaining popularity as it does not harm non-cancerous cells. This is likely to increase the demand for HPAPIs in the coming years.

Hospitals and healthcare institutes are working closely with pharmaceutical companies for conducting clinical trials, which is promoting the growth of targeted therapies. For instance, the Human Epidermal Growth Factor Receptor 2 (HER-2) protein is targeted for the treatment of breast cancer as the protein is found in abundance in cancer cells. Stomach and breast cancer cells overexpress the protein and thus HER-2 receptor antagonists, like trastuzumab, are used. Moreover, researchers are engaged in the development of a range of targeted products, including Janus kinase (JAK) 3 inhibitors, selective S1P receptor modulators, human interleukin inhibitors, and dihydroorotate dehydrogenase inhibitors.

Product Insights

The synthetic segment accounted for the largest revenue share of over 70.0% in 2020 as these molecules are effective in the treatment of a wide range of diseases at very small dosages. Many synthetic molecules are also expected to go off patent in the coming years, which is anticipated to fuel the market growth. The Japanese government has been promoting the use of generic drugs since 2007 to reduce the total healthcare cost and decrease the financial burden on patients.

The biotech segment is expected to witness lucrative growth in the forecast period owing to technological advancements and the high level of efficacy of these ingredients. Biotech HPAPIs mainly consist of drug molecules obtained after the usage of molecular techniques, such as recombinant DNA technology. The higher revenue associated with biotech-related API makes the market highly profitable, attracting major players. Furthermore, the growth of the biotech segment can be attributed to the 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.

Drug Type Insights

Innovative drugs accounted for the largest revenue share of more than 70.0% in 2020 owing to the increasing R&D initiatives for novel drug development and favorable government regulations. The growing focus on personalized and precision medicines, such as Antibody Drug Conjugates (ADCs), to treat specific patient conditions is driving the development of novel APIs, making innovation in this domain a high-impact rendering driver of the market.

A prominent example of a market player engaged in intensive R&D is Lonza, with more than 575 clinical development programs in 2018. Oncology is the leading domain for the usage of HPAPI products. Increased use in the treatment of cancer has gained much attention due to its low dosage requirements and reduced side effects. The largest percentage of HPAPIs is thus used in the formation of anti-cancer drugs.

Generic drug molecules are estimated to witness the fastest growth over the forecast period. The segment is driven by factors such as the patent expiry of branded drugs and lower costs. Generic drugs are also gaining market share owing to the rising number of patients in developing economies with low per capita income. According to the Association of Accessible Medicines, there has been a considerable rise in manufacturing units in Asia, Australia, and EU5 since 2017.

Application Insights

The oncology segment held the largest revenue share of over 75.0% in 2020 due to the large proportion of HPAPIs being used in oncology drugs. The rise in the prevalence of cancer is a key factor accelerating the demand for HPAPIs. According to the WHO, in 2018, there were an estimated 18 million cancer cases globally, out of which 8.5 million cases were among women and 9.5 million cases were among men.

The glaucoma segment is anticipated to witness exponential growth in the years to come owing to its increasing prevalence in developed and developing economies. Diseases such as HIV need support from high potency molecules for treatment and with an upward trend in the number of HIV patients, the demand for these molecules is expected to increase. In addition, the upward trend in the prevalence of infectious diseases with antimicrobial resistance is expected to accelerate the HPAPIs market growth.

Manufacturer Type Insights

The in-house segment accounted for the largest revenue share of over 70.0% in 2020 and is projected to maintain its lead over the forecast period. The companies invest heavily, in terms of infrastructure and developing costs, to develop these molecules. Furthermore, recent developments and initiatives by key players suggest that they are highly focused on in-house manufacturing over outsourcing. For instance, in November 2019, Novartis announced the acquisition of CellforCure-a France-based CDMO-to produce molecules in-house, which was earlier given on a contract manufacturing basis to CellforCure.

The outsourced segment is driven by factors such as the rising demand for biopharmaceuticals and the growing cost of manufacturing these molecules in-house. Moreover, dual sourcing is becoming a key strategy adopted by these companies. Major companies are looking to leverage their production capabilities in the surrounding Asian countries in an attempt to provide active pharmaceutical ingredients (APIs) to other drugmakers. For instance, in November 2017, Eisai Pharmaceuticals invested over USD 9.32 million to install manufacturing equipment for API production in India.

Contract manufacturing and outsourcing of HPAPI molecule development are rapidly increasing in the pharmaceutical sector. Companies such as Lonza and Evonik are aggressively involved in the provision of contract manufacturing services to other firms. Generic drug makers are outsourcing APIs and other drug formulations in an attempt to reduce the overall production cost and still offer quality products.

Regional Insights

North America accounted for the largest revenue share of more than 35.0% in 2020 and is expected to maintain its lead throughout the forecast period. This can be attributed to the presence of prominent manufacturers and advanced technological infrastructure, along with the rising demand for HPAPIs in the region.

Asia Pacific consists of a blend of developing and developed economies. Rising healthcare expenditure in the region is anticipated to fuel the market growth. According to the National Center for Biotechnology Information (NCBI), in 2019, 24% of overall breast cancer cases are in Japan, China, and Indonesia in Asia Pacific.

Europe held the second-largest revenue share in 2020, following North America. An increase in research funding and the local presence of key market players in this region are expected to drive the market. The number of biopharmaceutical companies is growing in Europe owing to the increasing investments. For instance, in 2017, USD 20 billion was raised as investment by the biopharma industry, which increased by 28% to USD 27.5 billion in 2019. The availability of advanced technology and increasing R&D in Europe are anticipated to fuel the market growth during the forecast period.

Key Companies & Market Share Insights

The proprietary technology of companies, such as drug designing and delivery technology, helps develop novel treatment alternatives through collaborations with other key players, which may increase the number of research initiatives. For instance, in October 2019, Sanofi announced the opening of its manufacturing unit that complements the production of biologics and biopharmaceutical products. Market players leverage licensing and partnerships strategy to increase their production capabilities and promote the outreach of their product offerings. For instance, in July 2020, Albany Molecular Research, Inc. (AMRI) announced a partnership with BioSig Technologies, Inc. for the supply of merimepodib for the manufacturing of antivirals for the treatment of SARS-CoV-2. This supply agreement enables the company to sustain itself in the market and generate higher revenue. Some prominent players in the global high potency active pharmaceutical ingredients market include:

• BASF SE

• CordenPharma

• Dr. Reddy’s Laboratories Ltd.

• CARBOGEN AMCIS AG

• Pfizer, Inc.

• Sun Pharmaceutical Industries, Ltd.

• Teva Pharmaceutical Industries Ltd.

• Albany Molecular Research, Inc.

• Sanofi S.A.

• Merck & Co., Inc.

• Novartis AG

• F. Hoffmann-La Roche Ltd.

• Bristol-Myers Squibb Company

• Boehringer Ingelheim International GmbH

• Cipla Inc.

High Potency Active Pharmaceutical Ingredients Market Report Scope 

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2028. For the purpose of this study, Grand View Research has segmented the global high potency active pharmaceutical ingredients market report on the basis of product, manufacturer type, drug type, application, and region:

• Product Outlook (Revenue, USD Million, 2017 - 2028)

  • Synthetic

  • Biotech

• Manufacturer Type Outlook (Revenue, USD Million, 2017 - 2028)

  • In-house

  • Outsourced

• Drug Type Outlook (Revenue, USD Million, 2017 - 2028)

  • Innovative

  • Generic

• Application Outlook (Revenue, USD Million, 2017 - 2028)

  • Oncology

  • Hormonal Disorders

  • Glaucoma

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Spain

    • Italy

    • Russia

    • Switzerland

  • Asia Pacific

    • Japan

    • China

    • India

  • Latin America

    • Brazil

    • Mexico

    • Argentina

    • Colombia

    • Chile

  • Middle East & Africa

    • South Africa