Active Pharmaceutical Ingredients Market Expected to Reach US$ 21.9 Bn Globally in 2023

Active Pharmaceutical Ingredients Market
Expected to Reach US$ 21.9 Bn Globally in 2023
According to a new market report published by Transparency Market Research “Active
Pharmaceutical Ingredient Market: Global Industry Analysis, Size, Share, Growth, Trends and
Forecast 2015 - 2023” the global active pharmaceutical ingredient market for was valued at US$
12.9 bn in 2014 and is estimated to reach US$ 21.9 billion by 2023 at a CAGR of 6.3% from
2015 to 2023.
An active pharmaceutical ingredient is the ingredient in a pharmaceutical drug that is
biologically active. Demand for low cost medicines and increasing number of ANDA filings are
fuelling the growth of the global active pharmaceutical ingredients market.
The active pharmaceutical ingredient market is categorized into manufacturing process, type of
API, drug type and therapeutic areas. The API manufacturers include those for captive or inhouse
API and contract API. Captive API manufacturing refers to production of the active
pharmaceutical ingredients for internal consumption of a pharmaceutical company. Contract
manufacturing involves outsourcing of API manufacturing by the innovator/formulator company
to CMOs. Captive manufacturing also known as in-house manufacturing held the largest share of
the global active pharmaceutical ingredient market in 2014. However, the market of captive
manufacturing is declining due to high production cost and limited for the manufacturing niche
APIs that offer high operating profit margins or for companies that are into generics and have
their own formulation plants.
The adoption rate of contract manufacturing is increasing due to soaring R&D costs and pricing
pressure on finished products. Improving quality and time-to-market, along with reduction in
fixed costs are the other important factors propelling the growth of the API contract
manufacturing segment. Outsourcing of API production to countries such as India and China
have introduced innovative production processes and advanced manufacturing technologies to
remain competitive in the market.
The synthetic chemical API segment had the largest share of this market in 2014 and has evolved
in the past few years due to innovations in the methods of synthesizing chemical APIs, which
improves their stability and potency., Whereas, the market for biological API is expected to have
the highest growth rate in the forecast period of 2015 to 2023. The global API market is

transforming, as large pharmaceutical companies are shifting focus toward the biological APIs
segment. Protein-based therapeutics (peptides, proteins, enzymes and antibodies) have emerged
as a major growth engine in the biological API market. Apart from the currently marketed
blockbuster biologics such as Humira and Herceptin, several other promising biologics such as
mepolizumab (GSK), dupilumab (Sanofi/Regeron), alirocumab (Sanofi), evolocumab (Amgen),
brodalumab (Amgen), ixekizumab (Eli Lilly) and secukinumab (Novartis) are expected to enter
several geographical markets during the forecast period from 2015 to 2023. This factor has
attracted higher investments in the biologics and biosimilars market.
Based on the drug type, the global API market is segmented into branded prescription drugs,
generic prescription drugs and OTC drugs. The branded API segment accounted for the largest
share of the global API market in 2014. According to the USFDA, 44% of the pharmaceutical
products launched in the U.S. between 2007 and 2012 were new molecules. This reflected the
frequency of novel molecules entering in the market. Increasing demand for new treatments will
certainly increase the branded API market in the near future. The generic prescription drugs
segment is expected to grow at the highest rate in the forecast period owing to their low cost.
Currently, the major pharmaceutical companies are also focusing on generic drugs along with
branded drugs due to eroding product pipeline and patent expirations. Over-the-counter (drugs)
are considered sufficiently safe and effective and increasing access to these medicines through
expansion of distribution channels would further drive this market during the forecast period.
The global API market categorizes therapeutics areas segment into different disorders such as
cardiovascular, metabolic, neurological, oncology, musculoskeletal, non-steroidal antiinflammatory
drugs (NSAIDs), and other therapeutic uses. Cardiovascular, metabolic, and
neurological disorders together held the largest share of more than 50% in 2014.
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