Active Pharmaceutical Ingredients Market Growing at a CAGR of 6.5% between 2014 and 2020

From: Transparency Market Research
Published: Fri May 15 2015

Diseases and epidemics are nature’s way to control population. With the ever-increasing number of deaths being reported due to various chronic diseases as well as newly diagnosed cases, the global active pharmaceutical ingredients (API) market has a huge demand to meet.

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Global API Market to be Valued at US$185.9 Billion by 2020

In 2013, the global API market was valued at US$119.7 billion. It is expected to grow at a CAGR of 6.5% from 2014 to 2020 and reach a valuation of US$185.9 billion by 2020. On the basis of therapeutic area, the API market is segmented into non-steroidal anti-inflammatory drugs (NSAIDS), oncology drugs, anti-diabetic drugs, cardiovascular drugs, central nervous system drugs, musculoskeletal drugs, and others.

Oncology Segment Will Be the Fastest Growing Drug Segment

Due to the prevalent sedentary lifestyle and growing aging population, cardiovascular diseases and diseases related to the central nervous system are rising. In 2013, the market revenue share for cardiovascular drugs was the highest. As per the data provided by the World Health Organization, in 2012, cancer alone led to 8.2 million deaths worldwide along with 14 million newly diagnosed cases. In response to this, the oncology drug segment will have the fastest growth in the API market during the period from 2014 to 2020. High potency active pharmaceutical ingredients (HPAPIs) are a component of most drugs in the oncology drug segment. So, the growth of the HPAPI market would be rapid to keep up with the growth of oncology drug segment.

Asia Pacific will Account for the Highest Growth from 2014 to 2020

In 2013, North America accounted for the majority share (35%) in the global API market. The API market in this region is expected to grow further. FDA approvals for the production of innovative drugs and growing awareness about the intake of generic medicines have led to the growth of the API market in North America.

The Asia Pacific region is expected to achieve the highest growth in the global API market in the period from 2014 to 2020. The API market has a huge demand from the Asia Pacific region because of the population demographics in this geography. In terms of production, the global API market has shifted to Asia Pacific because of the availability of cheap labor, tax benefits provided by the governments for manufacturing, and less regulations on the markets.

China and India are the frontrunners in API production. API manufacturing companies from North America and Europe have invested substantially in these two countries. In North America, stringent pharmaceutical regulations, such as the U.S. Drug Quality and Security Act, have to be met with. This has caused a slight decrease in the growth of the API market in this region.

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Costlier Production of Biological Drugs Hampers Segment

Compared to synthetic APIs, biological drugs are costlier because they are difficult to replicate and have difficult manufacturing requirements. Enhanced technological support has resulted in the production of biosimilars, which are not the exact replication of innovator drugs, but are efficient and safe. This has led to a big opportunity for biopharmaceutical companies like Novartis in the API market.

However, production of biosimilars requires approvals from the respective countries. The European Union has set the trend by approving biosimilars and the WHO has followed the approval guidelines similar to the European Union. As a first, the U.S. has approved the biosimilar Filgrastim (2015), which shows its interest in expanding its biological API market.

Key Players in Active Pharmaceutical Ingredients Market

The key players competing in the global API market include Cambrex Corporation, Boehringer Ingelheim Group, Pfizer Inc., Dr. Reddy’s Laboratories Ltd., BASF SE, Hospira Inc., Lonza Group, Mylan, Inc., Novartis AG, Actavis plc, Teva Pharmaceutical Industries Ltd., and Wuxi Apptec.

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