by Active pharmaceutical ingredients (APIs) are the primary components of pharmaceutical drugs that produce the intended physiological effects on the human body. APIs are responsible for the prevention, treatment, mitigation, or cure of various diseases when present in the appropriate formulation and dosage. Some of the commonly used APIs include paracetamol, azithromycin, ceftriaxone sodium, lamivudine, and ibuprofen. The growing healthcare expenditure and the patent expiration of several blockbuster drugs have increased the demand for generic medications manufactured using APIs at a lower cost as compared to branded drugs. Generic drugs offer comparable therapeutic efficacy at a fraction of the cost of branded drugs, thereby making treatment more accessible and affordable for a larger patient pool. The global Active Pharmaceutical Ingredients Market is estimated to be valued at US$ 7.33 Mn in 2024 and is expected to exhibit a CAGR of 7.8% over the forecast period 2024-2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends in the active pharmaceutical ingredients market is the rising outsourcing of API manufacturing. High developmental costs, frequent changes in regulations, and an increasing need for specialized technologies have prompted many drug manufacturers to outsource API production to contract development and manufacturing organizations (CDMOs). CDMOs have now emerged as reliable outsourcing partners for both innovative and generic drug companies. They provide cost-effective solutions for API manufacturing along with benefits such as reduced capital expenditure and access to advanced production infrastructure. Moreover, CDMOs enable drug companies to focus on their core competencies of drug discovery and commercialization. This outsourcing trend allows for efficient capacity utilization of manufacturing facilities and economies of scale, thereby supporting the growth of the overall APIs market.
Porter’s Analysis
Threat of New Entrants: The risk of new competitors entering the active pharmaceutical ingredients market is moderately high. Large capital investments are required to build large-scale manufacturing facilities and establish supply networks. However, regulatory barriers to enter the market are not very high.
Bargaining Power of Buyers: The bargaining power of buyers is moderately high due to the availability of generic drugs from various manufacturers. However, buyers cannot substitute original drugs with generics for certain therapeutic areas thereby reducing their bargaining power to some extent.
Bargaining Power of Suppliers: The bargaining power of raw material suppliers is moderate as there are many suppliers for generic chemicals and excipients. However, for patented drugs, suppliers have more bargaining power due to limited alternatives.
Threat of Substitute Products: The threat of substitute products is moderate. While generic substitutes pose a threat, they cannot replace patented drugs or address all therapeutic needs, minimizing the threat.
Competitive Rivalry: The competitive rivalry is high owing to the presence of many global and regional players offering generics as well as patented drugs. Companies vie based on pricing, strong pipeline, and supply reliability.
Key Takeaways
The global Active Pharmaceutical Ingredients Market Growth is expected to witness high growth over the forecast period supported by increasing incidence of chronic diseases and rising healthcare spending globally.
Regional analysis –
North America currently dominates the active pharmaceutical ingredients market and is expected to continue its dominance over the forecast period. This can be attributed to the presence of well-established pharmaceutical industry and rising healthcare spending in the region. Asia Pacific is anticipated to exhibit the fastest growth owing to growth in healthcare infrastructure, rising disposable incomes, and increasing penetration of healthcare insurance.
Key players operating in the active pharmaceutical ingredients market are Endo International plc, Teva Pharmaceutical Industries Ltd, Viatris Inc. (Mylan N.V.), Teikoku Pharma USA, Inc., Hisamitsu Pharmaceuticals Co. Inc. These players are focusing on product development and expansion of manufacturing facilities to cement their position in the global market.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
