The Global API Market at a glance

The global Active Pharmaceutical Ingredient (API) market size was valued at USD 157.9 billion in the year 2016 and is estimated to reach a value of USD 239.8 billion by 2025, growing with CAGR of 6.3 %. The market growth can be linked to the rising prevalence of chronic diseases such as cancer, neurological diseases, and cardiovascular diseases.

Increasing demand for rapid-acting & efficient drugs, increase in abbreviated new drug applications (ANDA) and introduction of innovative drug manufacturing facilities are other key drivers estimated to fuel growth of this market over the forecast period. Major pharmaceutical players opting for API outsourcing from developing regions such as China, India, and Brazil are expected to provide these regions with potential growth platform.

In addition, patent expirations are responsible for tremendous loss for pharmaceutical companies in terms of revenue. Patent expirations of the blockbuster drugs give rise to the generic versions of the molecules, and the manufacturers bear the cost. After a patent expires, the R&D investments done by the company are no longer beneficial for the company. Thus, the trend of outsourcing APIs is consistently increasing in the industry.

Basic Classification

Generic and innovative are the major types in the market. Innovative drug segment includes branded products whereas generic drugs are the ones available over the counter. Owing to high prescription rate, high price, and extensive drug development initiatives, innovative APIs dominated the market in the year 2016.

On the other hand, generics are expected to be the fastest-growing segment type over the forecast period, on account of patent expirations of various blockbuster drugs. Patent expirations of branded drugs have serious impacts on the drug manufacturers, as the companies face tremendous losses post expiration. Hence the manufacturers prefer generic drugs over the branded ones.

Synthesis Type

Based on type of synthesis, the market is categorized into biotech and synthetic. Various approaches are adopted by the manufacturers depending on the complexity of the required molecule. Synthetic APIs are produced with an organic chemistry base in contrast to biotech APIs, which are manufactured using molecular techniques. Biotech segment is further classified into monoclonal antibodies, recombinant proteins, and vaccines.

Synthetic segment held the largest market share in 2015. However, extensive R&D for new biosimilar drugs, rising demand for protein-based therapeutics, and increasing focus of key traditional manufacturers toward biological drugs are the key factors contributing toward lucrative growth of biotech APIs

Manufacturer Type

Based on the manufacturer type, it is classified into captive or in-house and merchant or outsourced APIs. According to the market estimates, captive APIs was the largest segment in 2016 and the merchant APIs are expected to be the fastest-growing segment over the forecast period.

All pharmaceutical companies are not integrated with a separate unit for formulation of active drug ingredients. This has led to an increase in outsourcing of these molecules from the manufacturing sites. Outsourcing also eliminates the need of investing in expensive manufacturing processes.

Application Type

Cardiovascular diseases, cancer, CNS & neurological disorders, and endocrinal disorders are the major applications of API. Cardiovascular diseases dominated in 2015 owing to its higher prevalence rate and high amount of product availability. Heart diseases have been reported to be the leading cause of death in the world since many years.

On the other hand, oncology is projected to be the fastest-growing segment pertaining to high number of products waiting for market approval. Oncology is estimated to witness CAGR of around 7% over the forecast period.

Regional Differentiation

North America dominated the overall API market in 2016 and is expected to hold its position over the forecast period, owing to the increasing R&D expenditure, rising favourable government initiatives for usage of generic drugs and technological advancements in the field of drug manufacturing.

Asia Pacific is expected to be the fastest-growing over the forecast period owing to the availability of affordable labour. Hence, major companies in the industry are setting up the API manufacturing plants in the developing countries such as China and India.

Categorization

The categorization of the active pharmaceutical ingredients market can be made into the following segments and sub segments:

APIs Market, by Type

    Innovative APIs
    Generic APIS

    APIs Market, by Type of Manufacturer

    Captive Manufacturers
    Merchant Manufacturers
    Merchant Manufacturers Market, by Type

  • Innovative Merchant API Manufacturers
  • Generic Merchant API Manufacturers
  • Merchant Manufacturers Market, by Type of Synthesis

  • Synthetic APIs
  • Biotech APIs
  • APIs market, by Type of Synthesis

    Synthetic APIs Market
    Synthetic APIs Market, by Type

  • Innovative Synthetic APIs
  • Generic Synthetic APIs
  • Biotech APIs Market
    Biotech APIs Market, by Type

  • Innovative Biotech APIs
  • Bio-similars
  • Biotech APIs Market, by Product

  • Monoclonal Antibodies
  • Hormones
  • Cytokines
  • Fusion Proteins
  • Recombinant Proteins
  • Therapeutic Enzymes
  • Vaccines
  • Blood Factors
  • Biotech APIs Market, by Expression System

  • Mammalian Expression Systems
  • Microbial Expression Systems
  • Yeast Expression Systems
  • Insect Expression Systems
  • Plant Expression Systems
  • Other Expression Systems
  • APIs Market, by Type of Drug

  • Prescription Drugs
  • Over-the-counter Drugs
  • APIs Market, by Therapeutic Application

  • Oncology
  • Diabetes
  • Cardiovascular Disease
  • CNS and Neurological Disorders
  • Endocrinology
  • Other Therapeutic Applications (Orthopedics, Urology and Nephrology, Ophthalmology, Pulmonology, Women’s Health, and Gastroenterology)
  • API Market, by Region

    North America

  • U.S.
  • Canada
  • Europe

  • Germany
  • France
  • U.K.
  • Italy
  • Spain
  • Rest of Europe (RoE)
  • Asia

  • Japan
  • China
  • India
  • South Korea
  • Rest of Asia (RoA)
  • Rest of the World (RoW)

    Market Stakeholders:

  • Medical image management software providers
  • Diagnostic imaging equipment vendors/service providers
  • Standalone image management software/workstation providers
  • Healthcare IT service providers
  • Research and consulting firms
  • Diagnostic imaging centers
  • Hospitals
  • Venture capitalists
  • Government agencies
  • Market research and con