Major Growth Driver:
The production capacity expansions by pharmaceutical and biopharmaceutical players, the growing importance of generics, and technological advancements in API manufacturing are some of the major factors driving the growth of this market.
Restraint: Unfavorable drug price control policies
Most nations control pharmaceutical manufacturer prices, either directly (France and Italy) or indirectly (Germany and Japan), through restrictions on reimbursement or profits (UK). It is generally accepted that countries with rigorous price restrictions have lower drug prices than nations with laxer regulation (UK) or no regulation (US).
Pharmaceutical drug prices have been increasing gradually across the globe in the past few years. When it comes to drug prices the US is a major unregulated market. Although, various prominent countries have regulated drug prices. To limit spending on pharmaceuticals, governments of several countries induce price controls. However, revenue of pharmaceutical companies takes a hit due to such regulated drug prices. This in turn lead to a reduction in R&D spending and lower new molecular entities (NMEs) being developed per annum.
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Opportunity: Emerging biosimilars market
The rising incidence of various diseases, the increasing number of off-patent biologic drugs, positive outcomes in ongoing clinical trials for biosimilars, and the rising demand for biosimilars in different therapeutic applications (such as rheumatoid arthritis and blood disorders) are the major factors driving the growth of the biosimilars market. Biosimilars are generic versions of patented biologic drugs; hence, they do not need to comply with the stringent requirements of various regulatory authorities (making them cost-effective as compared to patented biologics). The expiration of patents and other intellectual property rights for originator biologics over the next decade is expected to open up opportunities for biosimilars to enter the market.
Challenge: Increasing penetration of counterfeit drugs
Falsified or fake medicines include ingredients of bad or toxic quality in the wrong dosage forms. According to the WHO, ~10% of all medicines are counterfeit. The incidence of falsification of medicines is reported to be around 1% (of all medicines) in countries that have superior laws and control over the supply of medicines. However, in low- and middle-income countries, the level of falsified medicines rises to around 50%.
The growing penetration of counterfeit drugs is resulting in revenue losses for authentic API manufacturers. The EU Intellectual Property Office (EUIPO) has estimated that the EU pharmaceutical industry loses the equivalent of nearly 7% in sales per year to counterfeit drugs, which amounts to USD 30.70 billion (EUR 26.9 billion) annually. Also, around 7,100 jobs are lost annually due to counterfeit medicines/falsified medicines in the region.
Projected Surge in Revenue:
The global active pharmaceutical ingredient market in terms of revenue was estimated to be worth $145.9 billion in 2022 and is poised to reach $216.4 billion by 2027, growing at a CAGR of 8.2% from 2022 to 2027.
Overview of This Study:
The study involved four major activities in estimating the current size of the global active pharmaceutical ingredient market. Exhaustive secondary research was done to collect information on the market, its peer markets, and its parent market. The next step was to validate these findings, assumptions, and sizing with industry experts across the value chain through primary research. Both top-down and bottom-up approaches were employed to estimate the complete market size. Thereafter, market breakdown and data triangulation were used to estimate the market size of segments and subsegments.
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Geographical Growth Scenario:
North America is expected to account for the largest size of active pharmaceutical ingredient industry during the forecast period.
Geographically, the active pharmaceutical ingredient market is segmented into North America, Europe, Asia Pacific, and the Rest of the World (RoW). North America dominated the market, followed by Europe. The major factors driving the overall growth of the APIs market in this region include the presence of major pharmaceutical and biopharmaceutical manufacturing facilities, an increasing government focus on generic drugs, rising demand for biologics and specialty drugs, and technological advancements in the manufacturing processes of APIs. This market segment is expected to grow at a modest rate due to a combination of economic and healthcare severity measures as well as the introduction of low-cost and generic versions of branded drugs.
Recent Developments of Active Pharmaceutical Ingredient Industry
In 2022, Pfizer entered into an agreement with Acuitas to deliver a lipid nanoparticle delivery system for use in mRNA vaccines such as COMIRNATY ((tozinameran) and therapeutics.
In 2022, Sanofi and IGM announced a strategic collaboration agreement to streamline and optimize the development and commercialization of IgM antibody agonists for oncology, immunology, and inflammation target.
In 2022, Boehringer Ingelheim and Mabgenesis collaborated to develop novel monoclonal antibodies for canine therapeutic treatments.
In 2021, Pfizer invested USD 68.5 million in in new state-of-the-art facility in Durham, NC, to further advance gene therapy capabilities.
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