API Molecules Analysis: Revenue, Volume, And Export Analysis

Report Overview

The global active pharmaceutical ingredients market size was estimated at USD 237.47 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 5.75% from 2024 to 2030. Advancements in Active Pharmaceutical Ingredient (API) manufacturing, growth of the biopharmaceutical sector, and an increase in the geriatric population are among the key drivers of the market. An increase in the prevalence of chronic diseases, such as cardiovascular diseases and cancer, is anticipated to boost the market over the forecast period.

The API market is becoming more competitive, and consumer needs are becoming highly focused toward efficacy & specificity of therapeutic agent raw material. Buyers tend to purchase materials matching their requirements and negotiate the price. Thus, buyers are highly involved in the purchasing process to ensure quality of material matches their requirement. China's API market held a revenue share of USD 24.71 billion in 2022 and is expected to grow at a CAGR of 7.01% over the forecast period. China is considered a major producer of API and its intermediates. It serves as a source for 70% of global APIs. India is the third largest manufacturer of medicines by volume, but is heavily dependent on key APIs for formulation of finished products in China. India imports about 68% of APIs from China due to lesser cost than manufacturing APIs.

China has been one of the most severely affected countries by the COVID-19 pandemic, which has led to disruption of global API supply chains. However, many global companies are planning diversification of their supply chains and are considering manufacturers from outside China, which is expected to impact the country’s market adversely. Moreover, manufacturers have increased the prices of APIs due to the pandemic. An increased number of government initiatives globally to incentivize shifting API manufacturing in the countries is projected to act as a restraint for market growth due to negative impact on exports.

API Molecules Analysis: Revenue, Volume, And Export Analysis Report Scope

The active pharmaceutical ingredient market has been witnessing growth. Some of the market trends are as follows:

• Dependence of pharmaceutical manufacturers on China and India is high. Most of these manufacturers have a relatively small portfolio; however, they are constantly expanding.

• In 2020, out of the 3,786 valid Certification of Suitability (CEP) certificates, 2,369 were held by Asia, followed by Europe with 1,260. The rest of the world held only 157 valid CEPs.

• Over the past 20 years, the number of CEPs held by Asia increased from 31% in 2000 to 54% in 2010. This number reached 63% in 2020. This is indicative of the increasing dominance of Asian players in the API market. Any disruption in the Asian supply chain leads to major shortages in API supply globally, which consequently increases the prices.

• The high pricing pressure due to entry of generics in the market is forcing key players to prefer low-priced API molecules sourced from Asia. Furthermore, the price of production of APIs is relatively high in regions such as North America and Europe.

• Products that require complex equipment and crucial technical knowledge are still being produced in developed regions such as Europe and North America.

• The pharmaceutical industry is witnessing a penetration rate of over 40% for API CDMOs.

Future opportunities in the market can be tapped by adopting following plans:

• Investment in new and complex technologies is relatively low for Asian manufacturers, as they are more focused on less complex molecules that can be produced in bulk. Thus, investment in high-yielding, low-cost technologies is an alternative for manufacturers in other developed regions, such as Europe and North America, to avoid competitive pressure.

• Governments in developed regions, such as Europe and North America, is increasingly becoming supportive in terms of regulation for API production in these regions to reduce the dependence on Asian manufacturers. This move by regional governments can be due to the shortage of APIs during the COVID-19 pandemic.

DROCs for Top 10 Molecules:

• Oseltamivir

  • Drivers:

    • Increasing prevalence of contagious diseases and influenza

      • Influenza, since long, continues to affect people due to its unpredictable nature, periodic outbreaks, and sporadic pandemics. Every year, the influenza virus infects about 9% of the world's population. The effectiveness of strain-specific vaccines is hampered by the introduction of novel strains due to rapid mutations and disease contamination between species. The WHO estimates that influenza infects about 1 billion people each year, wherein between 290,000 and 650,000 people lose their lives. Moreover, cases of flu increase generally between December and May with peak around February and March.

      • Oseltamivir phosphate dominates the global anti-influenza drugs market. The widespread use of this drug and high therapeutic efficacy are factors driving demand for oseltamivir phosphate. In addition, it is excellent at preventing the symptoms of both influenza types A and B. Runny nose, cough, sore throat, fever, and chills are just a few of the flu symptoms that oseltamivir phosphate helps alleviate.

  • Restraint:

    • Availability of substitute API molecules/Introduction of new molecules

      • Sale of oseltamivir is hindered due to alternatives present in the market, such as Relenza (zanamivir), Rapivab (peramivir), and Xofluza (baloxavir marboxil). Decline in the sales can be attributed to increased use of these alternative medications.

    • Stockpiling of API

      • In 2021, Oseltamivir volume sales were 111.78 MT, which led to stockpiling of APIs as sales of finished product declined due to decrease in flu cases from 2020 to 2021 leading to stockpiling of APIs. Thus, decreasing market demand for products in 2022. However, demand for APIs is expected to increase due to high demand for oseltamivir medications.

  • Opportunity:

    • Drug shortages

      • Around 9 million flu cases are reported in the U.S. each year, along with 78,000 hospitalizations and 4,500 fatalities. It is projected that the next winter will see a “tripledemic” with simultaneous cases of other respiratory infections like COVID-19 and respiratory syncytial virus that have burdened the healthcare system. As the U.S. is expecting high caseloads of severe flu, the generic form of antiviral drug, Tamiflu, is facing shortage. The American Society of Health-System Pharmacists, which monitors medicine shortages, as per December 2022, stated that that there are currently only 10 Tamiflu formulations in limited supply, down from 12 a month ago.

    • Strengthening supply and manufacturing base in domestic market

      • Due to competitive advantage, cheaper power & labor costs, and favorable government support, China is a significant exporter of bulk drug intermediates worldwide. However, India is favored over China as a source of APIs, particularly in markets that are subject to regulations. This is because of sophisticated process capabilities that support production of complex intermediaries and bulk medicines.

• Celecoxib

• Amlodipine

• Citalopram

• Escitalopram

• Fluticasone

• Finasteride

• Esomeprazole Magnesium Dihydrate (SMDH)

• Topiramate

• Formoterol