Analysis by API Type (Branded and Generic); by Synthesis Type (Biotech and Synthetic); and by Application (Cardiology, Oncology, Pulmonology, Neurology, Ophthalmology, and Others) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
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The global active pharmaceutical ingredient (API) market is estimated to garner a revenue of ~USD 475 Billion by the end of 2035 by growing at a CAGR of ~6% over the forecast period, i.e., 2023 – 2035. Further, the market generated a revenue of ~USD 236 Billion in the year 2022. The growth of the market can primarily be attributed to the higher prevalence of chronic diseases such as cardiovascular diseases, and cancer across the globe, the rising demand for pharmaceutical drugs, and increasing geopolitical changes. The prevalence of chronic diseases is so high that nearly 40 million people lose their lives annually, out of which, about 15 million of them are classified as premature globally.
The global active pharmaceutical ingredient (API) market trends such as rising demand for personalized medicine and the outbreak of COVID-19, initiatives from the government to reduce infant mortality rate and increase life expectancy, and rising outsourcing options that reduce the cost of manufacturing are estimated to fuel the growth of the market over the forecast period. As of August 2022, around 6000 million cases of COVID-19 were noticed across the globe, meanwhile, 60 million people died due to COVID-19 in a similar duration. Hence all these factors are anticipated to influence the growth of the market positively over the forecast period. In addition to the aforementioned factors, the increased production capacity of the pharmaceutical, the growing importance of generics, and technological advancements in active pharmaceutical ingredient manufacturing are other factors that are estimated to fuel the growth of global active pharmaceutical ingredient (API) market. Also, a growing need for precision medicine from clinicians, healthcare systems, pharmaceutical companies, patients, and the government for proper diagnosis and treatment procedures along with the detection of rare diseases.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~6% |
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Base Year Market Size (2022) |
~ USD 236 Billion |
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Forecast Year Market Size (2035) |
~ USD 475 Billion |
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Regional Scope |
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Growth Drivers
Escalating Geriatric Population Rising Need for More Formulations - Data provided by the World Bank showed that there were 747,238,580 people aged 65 and above in 2021 around the world. People of elderly age are more likely to get sick or acquire chronic diseases since the body becomes weak with the passing of time. Geriatrics are more dependent on medicines than adults. Hence, this factor is projected to hike the growth of the market over the forecast period.
Spiking Cases of Medication Errors that Lead to Increase in Patient Mortality – The U.S. FDA stated in 2019, that it receives over 100,000 reports of medication errors annually. Additionally, over 6 million patients in the United States get affected by some sort of medication error every year.
Higher Utilization of APIs to Treat Diabetes Across the World – With the rising indulgence of the population in an unhealthy lifestyle, the prevalence of diabetes among people has grown considerably. Thus, the demand for active pharmaceutical ingredients is expected to increase for the timely treatment of the patient. A report published by the International Diabetes Federation (IDF) estimated the number of people living with diabetes to reach 643 million by 2030 across the world.
Spiking Prevalence of Cardiovascular Diseases Owing to Unhealthy Eating Habits and Sedentary Lifestyle – Recently, the cases of cardiovascular diseases have increased drastically owing to an unhealthy diet and reduced physical activity. To treat patients with cardiovascular disease, the need for active pharmaceutical ingredients is expected to grow to create a positive outlook for market growth during the forecast period. Cardiovascular diseases are very prevalent worldwide, for instance, approximately 18 million people die annually due to some sort of cardiovascular disease in the world.
Increasing Healthcare Expenditure Per Capita Demanding for API Synthesis – As a result of developing economies, the per capita income of people has also escalated which has ultimately increased the spending capacity in the healthcare sector, and for treatment processes. Hence, the preference for the active pharmaceutical ingredient is anticipated to rise for an effective treatment process. The global healthcare expenditure was projected to rise Y-O-Y reaching about USD 1100 per capita in 2019.
Challenges
The global active pharmaceutical ingredient (API) market is segmented and analyzed for demand and supply by application into cardiology, oncology, pulmonology, neurology, ophthalmology, and others. Amongst these segments, cardiology is anticipated to obtain the largest market share during the forecast period. The growth of the segment is ascribed to the higher prevalence of heart diseases, the increasing old population with high blood pressure, growing obesity, and cholesterol issues leading to surgeries or death in severe cases. For instance, approximately 600,000 people die due to heart disease per year solely in the USA. Furthermore, the surge in the number of cardiac arrest, usage of cardiac implants and heart transplant procedures around the world which require surgical procedures also brings the need for active pharmaceutical ingredients which in turn is anticipated to fuel segment growth.
The global active pharmaceutical ingredient (API) market is also segmented and analyzed for demand and supply by biotech and synthetic. Out of these, the synthetic segment is attributed to garnering the highest market share during the forecast period. Owing to the great advantages of synthetic active pharmaceutical ingredients including the low production cost of chemically synthesized ingredients coupled with the reduced cost of raw materials are considered to be major factors anticipated to impetus a significant revenue generation. Furthermore, the easy process of developing these synthetic active pharmaceutical ingredients is considered to be another growth factor for segment expansion in the upcoming years. On the other hand, the biotech segment is also projected to hold a significant market share by growing at a steady CAGR value. The main factor for segment growth is the escalation in the demand for biopharmaceuticals along with the increased number of innovations in biologics to address the unmet medical needs for diseases. Also, the biotech segment attracts big pharmaceutical enterprises and major key players owing to the increased number of FDI approvals for biological drugs and medicines including vaccines, blood components, and recombinant proteins. Hence, all the factors add up to propel segment growth.
Our in-depth analysis of the global active pharmaceutical ingredient (API) market includes the following segments:
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By API Type |
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By Synthesis Type |
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By Application |
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The North American active pharmaceutical ingredient (API) market, amongst the market in all the other regions, is projected to hold the largest market share by the end of 2035. The growth of the market in the region can be accounted for by the higher prevalence of cardiovascular diseases. Data provided by the Centers for Disease Control and Prevention stated that every 34 seconds, 1 person dies due to cardiovascular diseases in the USA while in 2020, 697,000 lost their lives due to a similar reason. Furthermore, recent policies of the U.S. government and rising healthcare infrastructure in the region, the rising number of novel drugs, and increasing molecular entities that go off-patent are also anticipated to propel the growth of the market over the forecast period. Furthermore, the presence of a strong healthcare network in the region along with rising healthcare expenditures is also anticipated to boost the market growth.
On the other hand, the Asia Pacific active pharmaceutical ingredient (API) market is also projected to hold a significant market share with a noteworthy CAGR over the forecast period. The major factor for market growth is the growing geriatric population coupled with the presence of a large patient pool in the region. In addition, favorable policies by the regulatory bodies that promote the market players to opt for an active pharmaceutical ingredient for timely treatment and supportive reimbursement policies are also expected to contribute to the market growth in the region. In addition, the region's expanding healthcare industry is also expected to boost market growth during the forecast period.
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Pfizer Inc. acquires U.S. FDA approval along with Myovant for MYFEMBREE, a once-daily treatment for premenopausal women with endometriosis to reduce non-menstrual and menstrual pain. Additionally, both companies are jointly commercializing MYFEMBREE with immediate product availability.
Abbott Laboratories to collaborate with WW International, Inc. to integrate WeightWatchers, a weight management program, to provide requisite assistance to people diagnosed with diabetes and improvise their health issues.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Ans: The higher prevalence of chronic diseases across the globe and spiking cases of medication errors are estimated to majorly boost the market growth.
Ans: The market is anticipated to attain a CAGR of ~6% over the forecast period, i.e., 2023 – 2035.
Ans: Higher price associated with the manufacturing process and possibilities of side effects is estimated to challenge the market growth.
Ans: The market in North America region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are Pfizer Inc., Abbott Laboratories, AbbVie Inc., Mylan N.V., GSK plc, Eli Lilli and Company, Sun Pharmaceutical Industries Ltd., Novartis AG, and Merck & Co. Inc.
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue-generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by API type, synthesis type, application, by region.
Ans: The cardiology segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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