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.
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.
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.
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.
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.
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.
An active pharmaceutical ingredient is a substance or a combination thereof used in a pharmaceutical product for providing direct access to the diagnosis, prevention, cure, or treatment of diseases or to have a direct impact in correcting, modifying, or restoring physiological functions in humans. Persistence Market Research has studied the global active pharmaceutical ingredients market in its report titled “Active Pharmaceutical Ingredients Market: Global Industry Analysis and Forecast, 2017 – 2025’’. The report includes revenue of the API manufacturers i.e. for both outsourced and in-house manufacturing. However, the report doesn’t consider API revenue that has not been mentioned herein.
Active Pharmaceutical Ingredients Market: Taxonomy
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.
One-of-a-kind research methodology used to prepare all research reports_bk_01_01_2020
The research methodology adopted by PMR to create reports_bk_01_01_2020 such as the active pharmaceutical ingredients market report is world class. The team of diverse, knowledgeable analysts begin their study with rigorous primary and secondary research in the active pharmaceutical ingredients market. A market player list that includes each node of the value chain is devised and a questionnaire that assists in the extraction of all the required data is prepared. After the information has been gathered, it is exhaustively validated using the triangulation method that combines the opinions of PMR experts with both primary and secondary research data. The final data is thoroughly scrutinized to obtain all the necessary insights concerning the active pharmaceutical ingredients market.
The active pharmaceutical ingredients market is marked by cutthroat competition and it is challenging but not impossible for any new entrants seeking to enter this lucrative market. Potential stakeholders are highly advised to refer to the competition landscape chapter of the active pharmaceutical ingredients market report. Here, PMR has profiled several prominent organizations active in the global active pharmaceutical ingredients market. The key players for small molecule API CDMO, Peptide API, Oligonucleotide API, Steroid API, Carbohydrate API, HPAPI, and controlled substances have each been analyzed in a different section. It is possible to carry out an in-depth competition SWOT analysis and potential entrants can decide which segment they wish to target based on their inherent strengths and the weaknesses of the immediate competition.
It is not surprising that there is a heavy regulatory oversight in a market as critical to human life as the active pharmaceutical ingredients market. A highly important section of the active pharmaceutical ingredients market report has specifically spoken about the major deals and regulations that pertain to API CDMO. It is followed by the drug pipeline analysis of Oligonucleotides, Peptides, Steroidal drugs, and High Potency API Drugs. The primary respondents by each region and their outlooks follow. The global active pharmaceutical ingredients market has been divided into five broad geographic regions viz. APAC, RoW, Europe, Latin America, and North America; each of which has its own section in the active pharmaceutical ingredients market report. The report provides the market value share and BPS analysis of the largest regional markets and also gives the market attractiveness on a country basis. Key trends and regulations that pertain to a specific region or country within that region complete this informative section.
The active pharmaceutical ingredients market report has a preface at the outset that is a brief glance at the active pharmaceutical ingredients market. It is closely related to (and followed by) the market definition as well as the taxonomy of the active pharmaceutical ingredients market. PMR analysts have studied the active pharmaceutical ingredients market for a period of eight years from 2017 to 2025 and have formed their opinions and recommendations based on current and future anticipated trends in the active pharmaceutical ingredients market. These have been detailed in the form of geographic regions and segments to target with a differentiating strategy to stand above all others in the active pharmaceutical ingredients market.
The market dynamics of a market as volatile as the active pharmaceutical ingredients market cannot be overlooked. The drivers, restraints, opportunities, and trends that are predicted to have an outsized impact on the active pharmaceutical ingredients market are highlighted in this section and report readers would do well to peruse them to make critical decision-making that little bit easier.