In 2027, the global API market will exceed US$280 billion

In 2019, the global API market size was approximately US$168.87 billion, and it is expected to exceed US$285.5 billion by 2027. From 2020 to 2027, the market will grow at a compound annual growth rate of 6.82%. The advancement of API production technology, the development of the biopharmaceutical industry, and the increase in the elderly population are all major factors driving market development.

API business outsourcing

Increasing cases of infectious diseases and cancer will further promote the growth of demand for raw materials. The National Cancer Institute estimates that approximately 1.736 million new cancer cases were diagnosed in 2018.

In the production of high-quality APIs, some countries have implemented strict specifications and regulations, and the global API market is expected to gain momentum, boosting the management cost of self-produced APIs. Therefore, many pharmaceutical companies are focusing on the outsourcing of API production.

The Indian Brand Equity Foundation (IBEF) stated that with the increasing number of chronic disease cases, the global demand for biological products is high. In emerging countries, imports of APIs have increased and used to develop more innovative biopharmaceutical products. Pharmaceutical companies in various countries are focusing on research and development to develop the most advanced drugs. However, changes in drug price policies (especially in developing countries) may hinder the growth of the API market in the near future.

The outbreak of the new crown pneumonia has caused huge losses to many companies. Most companies either stop operating their business or reduce their workforce to maintain effective social isolation measures.


Innovative drugs dominate

According to synthetic methods, this market can be divided into biological bulk drugs and synthetic bulk drugs. The market share of the synthetic API segment in 2018 is in a leading position, thanks to the cost-effective raw materials used to produce APIs and are cheaper than biological APIs. With the continuous advancement of biologics production technology and the high demand for biopharmaceutical products for the treatment of various diseases, the market for biopharmaceuticals will see great growth during the forecast period. In addition, the surge in the number of FDA approvals for biological drugs such as recombinant proteins, blood products and vaccines will also drive market growth.

According to the category of API manufacturers, the API market can be subdivided into commodity APIs and self-produced APIs. Due to the easy availability of raw materials and the capital-intensive advantages of major market participants in the development of high-end production facilities, self-produced and self-use APIs accounted for the largest market share in 2019. During the forecast period, commodity APIs will be the fastest-growing market segment, thanks to a variety of factors, such as higher costs for internal production of these molecular compounds, and rising demand for biopharmaceutical products.

According to the types of APIs, the API market can be divided into innovative APIs and general APIs. In 2019, innovative APIs will dominate the market due to the government’s promulgation of favorable laws and regulations, the establishment of R&D facilities, and the increase in funding for new drug development. Pharmaceutical companies have carried out extensive research in this field, and some innovative products under research and development will be introduced to the market in the next few years.

The general-purpose API market segment is expected to achieve considerable growth during the forecast period. The expiration of brand-name molecular drug patents is a key factor driving the market's demand for general-purpose APIs. Due to the high acceptance of over-the-counter drugs in the market and the unmet demand for clinical treatment in countries such as India and Brazil, the generic drug market is expected to achieve considerable growth in these countries.


Oncology is growing fastest

The raw materials can be used in oncology, cardiology, central nervous system and neurology, plastic surgery, pulmonology, gastroenterology, nephrology, ophthalmology and endocrinology. Due to the rising incidence of target diseases around the world, the field of cardiology drugs will dominate the market in 2019. According to data provided by the World Health Organization, cardiovascular disease causes approximately 17.9 million deaths worldwide each year, and 85% of deaths are caused by strokes and heart attacks.

It is estimated that during the forecast period, oncology is the fastest growing field. This market segment is driven by factors such as rising cancer incidence and increasing lifestyle-related diseases. Companies have carried out extensive research and development activities to develop drugs for new biomarkers. At present, there are many raw materials for cancer treatment on the market, such as bevacizumab, trastuzumab and rituximab produced by Roche, and imatinib produced by Novartis.

In 2019, North America has a dominant position in the global API market. Because of the highly developed economy in this region, coupled with technological advances, the incidence of cancer and other lifestyle-related diseases has increased, prompting major market players to actively carry out R&D activities and promote Market growth.

The Asia-Pacific region has the fastest growth rate during the forecast period. Due to the relatively cheap labor prices, many large companies choose to establish API manufacturing plants in developing countries such as China and India.