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Global Active Pharmaceutical Ingredients Market

API is a main ingredient, which helps to cure a disease or disorder. APIs provide health benefits and are used in disease diagnosis, prevention, and treatment. APIs cannot be used in the raw form, as it is the crude form of drug, which will not meet the appropriate pharmacodynamics and pharmacokinetics parameters. Certain drugs such as combination therapies have numerous active ingredients, which treats different symptoms or act in different ways. Manufacturers use different standards to determine the strength of an API. However, the standard differs from one brand to another, as per the company choice.

The global active pharmaceutical ingredients market size was valued at US$ 153.4 billion in 2017 and is expected to exhibit a CAGR of 6.8% over the forecast period (2018 – 2026).

Figure 1. Global Active Pharmaceutical Ingredients Market Value (US$ Bn), by Region, 2018

Source: Coherent Market Insights Analysis (2019)

Increasing prevalence of chronic diseases to propel the active pharmaceutical ingredients market growth

Increasing prevalence of chronic diseases is expected to increase the demand for drugs, which in turn is expected to fuel the active pharmaceutical ingredients market growth in the near future. According to the World Health Organization (WHO), mortality and global health estimates of 2015, ischemic heart disease, stroke, chronic obstructive lung disease, and lower respiratory infections have been the cause for maximum number of deaths during the past decade. Moreover, diabetes caused 1.6 million (2.8%) deaths in 2015, from 1.0 million (1.8%) deaths in 2000. Deaths due to dementia doubled between 2000 and 2015, making it the 7th leading cause of global deaths in 2015.

According to Non-Communicable Disease fact sheet 2017 by World Health Organization (WHO), non-communicable disease accounts for 70% of all deaths globally. Each year, 15 million people between the age range of 30 and 69 years die from a non-communicable disease (NCD), wherein over 80% of these premature deaths occur in low- and average-income countries.

Cardiovascular diseases account for most of the NCD deaths, with 17.7 million deaths annually, followed by cancers (8.8 million), respiratory diseases (3.9million), and diabetes (1.6 million) contributing to over 80% of all premature NCD deaths, as per World Health Organization (WHO).

Changing lifestyles and unhealthy diet patterns, which include consumption of junk food, tobacco, and alcohol are some of the factors making future generation more prone to diseases due to a weak immune system. Therefore, increasing prevalence of non-communicable diseases is expected to increase the demand for drugs, which in turn is expected to drive growth of the active pharmaceutical ingredients market in the near future.

Figure 2. Global Active Pharmaceutical Ingredients Market Share (%), by API, 2018 and 2026

Source: Coherent Market Insights Analysis (2019)

Geographical expansion of API manufacturers towards Asia to bolster the market growth

Several active pharmaceutical ingredients manufacturers are expanding their presence across the globe. The active pharmaceutical ingredients (API) manufacturers are establishing their commercial production units in Asia to remain competitive and gain advantage over other competitors. For instance, BASF is planning to build a new specialty amines plant at its existing site in Nanjing Chemical Industry Park, China. This new multi-product plant will be able to manufacture 21,000 metric tons of amines per year and it extends BASF’s amines portfolio at the specialty amines complex in Nanjing. The plant is scheduled to stream by 2019.

Moreover, in April 2018, STA Pharmaceutical, a subsidiary of WuXi AppTec, signed an investment agreement with the government of Shanghai to build a new research & development (R&D) center for APIs and intermediates located next to the company’s existing Jinshan drug-substance manufacturing site. The company will add over 30,000 square meters of laboratory space and 500 scientists.

Furthermore, in October 2017, a small active pharmaceutical ingredients manufacturer Alcami, opened an office in Tokyo, Japan, as part of its effort to expand drug development and manufacturing in Japan.

Key Players

Major players operating in the global active pharmaceutical ingredients market include Teva Pharmaceutical Industries Ltd., Pfizer, Inc., BASF SE, Dr. Reddy’s Laboratories Ltd., Novartis AG, Mylan N.V., Sanofi S.A., and Lonza.