The global active pharmaceutical ingredient market stood at around $190 billion in 2020, and it is expected to reach approximately $300 billion by 2030. This can be attributed to the widening of the application area of drugs, expiration of patented biologics, increase in the incidence of chronic and lifestyle-associated diseases, such as cancer, diabetes, and cardiovascular diseases, rise in the geriatric population, government initiatives to promote generic drugs, investments in biosimilars, increasing healthcare expenditure, and surging awareness about diseases.
Due to the COVID-19 pandemic, lockdowns were imposed by the government in several countries across the world, which disrupted the supply chain and economic activity during the first half of 2020. However, established pharmaceutical and biotech companies, as well as research institutes, stepped forward to develop a treatment against the coronavirus, which had a positive impact on the API market.
Due to High Investments by Major Players, Captive Category Held Larger Share
The captive category held the larger share in the active pharmaceutical ingredient market during 2015–2020, and it is expected to retain its position in the upcoming years, based on the type of manufacturer. This can be attributed to the easy availability of raw materials and surging investments by the major players to develop high-end manufacturing facilities.
With Rising Drug Discovery Activities, Innovative APIs Category Dominated Market
The innovative APIs category held the larger share in the market for active pharmaceutical ingredient during the historical period, based on type, and it is expected to retain its position in the upcoming years. The increasing drug research and development (R&D) initiatives by innovator API companies, favorable government regulations, and launch of novel and more-effective medicines are the key factors contributing to the growth of the innovative APIs category.
Biotech APIs Category To Witness Faster Growth owing to Adoption of Biological Therapies
The biotech APIs category is expected to expand at the higher CAGR in the upcoming years, based on the type of synthesis. This can be attributed to the high investments in the biotechnology research and biopharmaceutical sectors, adoption of biological therapies for disease management, increasing number of approvals for biologics, and increasing number of branded drugs going off-patent.
Oncology Category To Witness Fastest Growth during Forecast Period due to Increasing Demand for Highly Potent APIs
The oncology category is expected to register the highest CAGR during the forecast period, based on therapeutic application. This would be driven by the high prevalence of cancer and increasing demand for highly potent APIs (HPAPIs) for its treatment.
North America Is Largest Market because of Rapid Technological Advancements
Geographically, North America held the largest share in the active pharmaceutical ingredient market in 2020 owing to the rising R&D investments in the area of drugs, improving healthcare infrastructure, and technological advancements in the region.
Asia-Pacific (APAC) To Experience Highest CAGR in Forecast Period due to Large Patient Pool
APAC is expected to witness the fastest growth during the forecast period (2021–2030). This will be due to the large patient pool, surge in the healthcare expenditure, and the existence of a large number of companies manufacturing generic drugs in the region. Additionally, an increasing number of people are becoming aware about lifestyle-associated diseases, which is further driving the industry progress in the region.
Mergers, Acquisitions, and Partnerships Are Key Trends
Over the past decade, the API market has witnessed a large number of mergers, acquisitions, and partnerships globally. For instance, in August 2020, Pfizer Inc. announced a multi-year agreement with Gilead Sciences Inc. to manufacture and supply the latter’s investigational antiviral remdesivir, in an effort to scale up the supply of the investigational treatment for COVID-19. Additionally, in April 2020, Boehringer Ingelheim International GmbH. acquired Northern Biologics, which focuses on therapeutic antibodies targeting the tumor microenvironment, to combat cancer and other serious diseases. This acquisition broadened Boehringer Ingelheim’s oncology product portfolio.
Rising Geriatric Population To Play Major Role in Market Growth
The increasing life expectancy is a major contributor to the growth in the geriatric population. As per the United Nations Department of Economic and Social Affairs (UNDESA) report World Population Ageing 2019, the population of people aged 65 years or above is projected to double to 1.5 billion by 2050. Globally, the share of this population increased from 6% in 1990 to 9% in 2019, and it is projected to rise further to 16% in 2050. The elderly require extensive care as they need a longer recovery time and are more prone to illnesses owing to their low immunity level. Therefore, to cater to the increasing demand for drugs to treat different diseases and disorders in the elderly, the consumption of APIs is surging.