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8 Feb 2016

API market to touch US$185.9 billion by 2020

Global API market driven by the rising abbreviated new drug applications and the growth in filing drug master files from several Indian firms, says Transparency Market Research.

A new Transparency Market Research report states that the global active pharmaceuticals ingredients (APIs) market stood at US$119.7 billion in 2014 and is predicted to reach US$185.9 billion by 2020. It is expected to expand at a CAGR of 6.50% from 2014 to 2020. The title of the report is "Active Pharmaceutical Ingredients (API) Market: (Branded/Generic/Over-the-counter, Chemical/Biological, Captive/Contract Manufactured, by Geography, and by Therapeutic Area) — Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2014–2020".

The global pharmaceutical industry has suffered enormously due to patent expiry of blockbuster drugs in the past few years. However, this has facilitated a surge in the demand for low-cost substitutes across the globe resulting in a boost to active pharmaceutical ingredient (API) manufacturing. The approvals of biosimilars in Europe has added to the total API market revenue, and the recent approval of Novartis' filgrastim biosimilar in the US is expected to continue the upward trend in this market. The overall global APIs market was valued at USD 119.7 billion in 2013 and is anticipated to reach USD 185.9 billion by 2020, expanding at a CAGR of 6.5% during the forecast period from 2014 to 2020.

The global APIs market is driven by the rising abbreviated new drug applications (ANDA). In the past few years, the growth in ANDAs has in turn fuelled the demand for APIs. In addition to this, the growth in filing drug master files (DMFs) from several Indian firms has fueled the overall APIs market. On the other hand, the global APIs market will be constrained by the strict European Union (EU) regulatory policies.

As per the report, the APIs market is fuelled by the rising abbreviated new drug applications and the increasing drug master file filing via Indian companies. The prime opportunity seen in the market is the patent expiry of promising biological drugs. On the other hand, factors such as the stringent EU regulatory policies will impede the growth of the APIs market in the coming years.

On the basis of type of manufacturing, the market is segmented into API contract manufacturing and captive or in-house API manufacturing. Amongst these, the segment of captive or in-house API manufacturing is experiencing a rapid decline in the market for APIs owing to its lack of profitability for the manufacturer and rising degree of competition in the market. Pharmaceutical companies are inclined towards API contract manufacturing rather than in-house API manufacturing owing to the increasing costs of research and development, and the pressure to maintain low prices of finished goods. Thus, outsourcing of API production is increasingly being preferred by manufacturers.

On the basis of type of API, the market is segmented into biological APIs and synthetic chemical APIs. Amongst these, the segment of biological APIs is experiencing the most significant growth rate owing to the huge number of pharmaceutical companies involved in this segment.

The chief players dominant in the market are Boehringer Ingelheim Group, Dr Reddy's Laboratories, Cambrex, BASF, Lonza, Hospira, Mylan, Teva Pharmaceutical Industries, Novartis, and Pfizer.

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