The global Active Pharmaceutical Ingredient (API) market is estimated to be valued at US$206.0 billion in 2021 and is expected to exhibit a CAGR of 6.8% over the forecast period 2021-2028, as highlighted in a new report published by Coherent Market Insights.

 

A) Market Overview:

The Active Pharmaceutical Ingredient (API) market comprises the chemical compounds that are responsible for the therapeutic effect in pharmaceutical drugs. APIs are the primary components that provide the desired pharmacological activity in medications. They are used in a wide range of therapeutic areas such as cardiovascular, oncology, neurology, and others. The growing prevalence of chronic diseases and the increasing demand for generic drugs are driving the growth of the global API market.

 

B) Market Dynamics:

The API market is primarily driven by two key factors: the rising incidence of chronic diseases and the growing pharmaceutical industry. With the increasing burden of chronic diseases such as diabetes, cancer, and cardiovascular diseases, there is a growing demand for effective medications, which in turn fuels the demand for APIs. Moreover, the expanding pharmaceutical industry, particularly in emerging economies, is contributing to the market growth. The increasing investment in research and development activities by pharmaceutical companies to develop innovative drugs further augments the demand for APIs.

 

C) Market Key Trends:

One key trend in the Active Pharmaceutical Ingredient (API) Market is the shift towards outsourcing API manufacturing to contract manufacturing organizations (CMOs). Many pharmaceutical companies are now outsourcing their API manufacturing to CMOs to reduce costs and focus on their core competencies. This trend is driven by factors such as cost-effectiveness, reduced time to market, and access to specialized expertise. For example, Lonza Group is a prominent CMO that offers a wide range of API manufacturing services to pharmaceutical companies.

 

D) SWOT Analysis:

Strengths:

1. Increasing prevalence of chronic diseases: The rising incidence of chronic diseases propels the demand for APIs.

2. Growing pharmaceutical industry: The expanding pharmaceutical sector drives the demand for APIs.

 

Weaknesses:

1. Stringent regulatory requirements: The stringent regulatory framework can pose challenges for API manufacturers.

2. Limited availability of raw materials: The availability of high-quality raw materials can be a constraint for API production.

 

Opportunities:

1. Increasing focus on personalized medicine: The growing trend towards personalized medicine creates opportunities for customized APIs.

2. Emerging markets: The untapped potential in emerging economies offers significant growth opportunities for API manufacturers.

 

Threats:

1. Patent cliffs: The expiration of key patents can lead to a decline in demand for branded APIs.

2. Intense competition: The presence of numerous manufacturers intensifies competition in the API market.

 

E) Key Takeaways:

1. The global API market is expected to witness high growth, exhibiting a CAGR of 6.8% over the forecast period, due to the increasing prevalence of chronic diseases and the growing pharmaceutical industry.
2. North America is expected to dominate the API market, followed by Europe and Asia-Pacific, driven by technological advancements, well-established healthcare infrastructure, and the presence of key market players.
3. Reddy’s Laboratories Ltd., Novartis AG, Mylan N.V., Amneal Pharmaceuticals LLC, and Lonza Group are some of the key players operating in the global API market.

 

In conclusion, the global API market is set to experience significant growth due to the rising burden of chronic diseases and the expanding pharmaceutical industry. As pharmaceutical companies focus on developing innovative medications and outsource API manufacturing to CMOs, there are ample opportunities for growth in the market. However, stringent regulations and intense competition pose challenges for API manufacturers.