Active Pharmaceutical Ingredient Market

Global Market Study on Active Pharmaceutical Ingredients: Small Molecules API Segment Anticipated to Create Significant Growth Opportunities During 2017 - 2025

  • June-2017
  • PMRREP11260
  • 256 Pages
  • Healthcare


With advancements in healthcare infrastructure, healthcare spending has increased over time. This augmenting focus on healthcare spending positively influences the market for active pharmaceutical ingredients. The high adoption rate of generic drugs in developed and developing economies is fueling the growth of the market.

Another positive impact comes from the high demand for specialty medicines which is anticipated to escalate the spending in the pharmaceutical sector. Developed nations are expected to exhibit faster growth in these spending as compared to the developing economies on the back of factors such as the presence of adequate manufacturing units, transparent pricing, and higher spending power.        

Outsourcing of R&D activities has emerged as a major trend in the market owing to reduced operational cost and enhanced operational efficiency in the value chain. Market participants are focused on possessing branded as well as unbranded generic drugs to maintain a balanced product portfolio.

Asian nations such as India and China lead the market in the manufacturing of antibiotic Active Pharmaceutical Ingredient (API). The market for API is expanding in Europe and North America with rapidly rising healthcare infrastructure in these regions. Some of the major market players are AmbioPharm, Inc., Pfizer CenterSource, Rhodes Technologies and Pepscan.

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Company Profiles

  • Johnson Matthey, 
  • Siegfried, 
  • Almac, 
  • PolyPeptide Laboratories, 
  • AmbioPharm, Inc., 
  • Corden Pharma, 
  • Pepscan, 
  • BCN peptide, 
  • Provence Technologies Groups, 
  • SennChemicals AG, 
  • Avecia OligoMedicines, 
  • Santaris Pharma  - acquired by Roche in 2014, 
  • ST Pharm Oligo Center, 
  • Cepia Sanofi, 
  • Biospring, 
  • Pfizer CenterSource, 
  • Symbiotec Pharma Lab Pvt. Ltd., 
  • Gadea Grupo Farmacéutico, 
  • STEROID S.p.A., 
  • Dolder AG, 
  • Dalton Pharma Services, 
  • FarmaBios Spa, 
  • Dextra Laboratories Limited, 
  • GlycoSyn, 
  • Inalco Pharma, 
  • Sussex Research, 
  • Pfanstiehl, Inc., 
  • Noramco, Inc., 
  • Johnson Matthey, 
  • Siegfried, 
  • Rhodes Technologies, 
  • Ash Stevens, 
  • Fermion (public), 
  • Olon SpA, 
  • Lonza Group
  • Others

Focus on healthcare to drive the active pharmaceutical ingredients market

The spending on healthcare has grown at a rapid pace in recent years and it increased at a CAGR of 6.92% between the years 2003 and 2013. The healthcare spending growth was significantly higher than the population growth rate that grew at a CAGR of 1.22% for the same period.

The per capita healthcare spending rose from just under US$ 600 in 2003 to above US$ 1000 in 2013, at an average CAGR of 5.62%. The focus on healthcare spending was observed to be a global phenomenon and this directly benefited the active pharmaceutical ingredients market.

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Specialty medicines a trend in the active pharmaceutical ingredients market

A higher generic adoption rate in developed countries that ranges from 27% to 32% is driving global medicine spending and aiding greater access to improved, lifesaving healthcare services. The adoption of branded generic drugs is predicted to be higher in emerging economies such as China and India and generic drugs accounted for nearly 80% of the total drugs sold by value in these fast-growing nations in 2016.

Rising use of specialty medicines is anticipated to grow the pharmaceutical spending worldwide with quicker growth in richer, developed nations as compared to their emerging counterparts. This is primarily because the former have adequate manufacturing units, a higher spending power, and greater emphasis on transparent pricing by assessing measuring effects on the population.

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Product offering expansion and cost reduction to help immeasurably

An intense focus on commercializing drugs and reducing operating costs by outsourcing R&D activities can improve the organizational efficiency substantially. Outsourcing at later stages of development through the appointment of strategic partners can potentially improve operational efficiencies throughout the value chain.

A balanced portfolio approach goes a long way in expanding sales and simultaneously reducing risk. This could be by possessing branded generic drugs, branded drugs, and unbranded drugs within the same portfolio. In addition, clearly defined forward linkages in the supply chain can garner greater market share in different regions over the course of the forecast period.

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Asian countries hold a large chunk of the active pharmaceutical ingredients market

The vast majority of anti-inflammatory and antibiotic drugs are manufactured in Asian nations such as China and India. Roughly 4/5th of the total antibiotic APIs are made in the two countries and then outsourced to developed countries in Europe and North America. The lower labor cost and abundant raw material availability needed to make API are the critical factors responsible for the massive growth in the APAC API market.

In addition to this, regulatory support and government encouragement to establish API manufacturing hubs by way of favorable tax policies are helping drive the APAC API market. The large patient population base that consumes non-controlled drugs over the counter is also a key factor leading to the boom in APAC in-house API consumption.

Higher growth in the APAC active pharmaceutical ingredients market

Healthcare spending has witnessed continued growth for some time now. Even though the proportion of healthcare spending in the APAC region is comparatively low, the growth rate in this strategic region has outpaced that of mature markets in North America and Europe.

Rising healthcare spending has led to quality healthcare becoming accessible along with a higher demand for pharmaceutical products across APAC. The pharmaceuticals consumed here are mostly produced in onshore manufacturing units. Furthermore, contract manufacturing organizations are key outsourcing allies for pharmaceutical companies that supply their wares to North America and Europe.

active pharmaceutical ingredients market

Non-controlled substances have a high CAGR and can be targeted

Non-controlled substances accounted for a value of more than US$ 43 Bn in the APAC active pharmaceutical ingredients market in 2016 and are forecast to be worth almost US$ 46 Bn by 2017 end with a growth rate of 4.5% year on year. By the end of 2025, non-controlled substances should be worth US$ 66 Bn on account of a CAGR of 4.9%, representing a potential goldmine in the active pharmaceutical ingredients market that can scarcely be ignored.

Active Pharmaceutical Ingredients Market: Taxonomy


  • North America
  • Latin America
  • Europe
  • APAC
  • RoW

API Type

  • Small Molecules
    • Controlled Substances
      • Natural Opioids
      • Semi-synthetic/Synthetic Opioids
    • Non-Controlled Substances
      • NSAIDs
      • Anti-infective
      • Antimicrobial
      • Oral anti-diabetics
      • Anti-hypertensive
      • Others
  • Peptides & Oligonucleotides
  • Carbohydrate Drugs
  • Steroidal Drugs

Certain assumptions have been made and a few acronyms have been used to prepare the active pharmaceutical ingredients market report. These have been adequately explained in a section that readers can acquaint themselves with to ensure that they understand the active pharmaceutical ingredients market with all of its nuances and technicalities.

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