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Active Pharmaceutical Ingredients Market Key Players, Industry Overview, Supply Chain and Analysis 2023 – 2030

Pharmaceutical Research

Updated on Oct 11, 2023

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Active Pharmaceutical Ingredients Industry Overview

The global Active Pharmaceutical Ingredients Market size is expected to reach USD 352.98 billion by 2030, expanding at a compound annual growth rate (CAGR) of 6.0% during the forecast period, according to a new report by Grand View Research, Inc. The market is driven by the growth of the biopharmaceutical sector, advancements in active pharmaceutical Ingredients (API) manufacturing, and an increase in the geriatric population.

The growth of the captive API segment is propelled by companies investing in solving challenges and developing new chemical ways for the production of APIs in-house. This aids in reducing costs and the risk of contamination. Artificial intelligence and protein synthesis are expected to facilitate faster development with greater control over the process.

The rising prevalence of chronic and lifestyle-based conditions, such as cardiovascular diseases, is accelerating the demand for API. For instance, as per U.S. Pharmacist in 2020, 47% of adults have at least one risk factor that supports cardiovascular disease development. Cardiovascular diseases are one of the global, critical public health burdens driving extensive R&D for APIs in the field.

The active pharmaceutical Ingredients market was positively influenced by the COVID-19 pandemic, as countries and significant players produce large quantities of components to meet the demand for the treatment of COVID-19.  As a result of the outbreak, drug companies have changed the companies’ strategies to focus on a larger patient population. To treat coronavirus, the U.S., for example, requested that HCQ be imported from India. The virus has also impacted Canada's medicine supply system, potentially causing complications for patients. The increasing importance of generics, rise in consumption of biopharmaceuticals, and expanding drug research and development activities for drug manufacturing are the primary drivers driving the growth of the market. However, the market's expansion is likely to be hampered by unfavorable drug price control regimes in several countries and high manufacturing costs.

Developing nations like India are receiving an increased preference in the market over dominant API market countries, like China, owing to geopolitical situations. Furthermore, India has quality raw materials and products, a large workforce, a vast distribution network, and government subsidies through the "Make in India" program.

To address unmet medical needs, companies are collaborating to develop novel treatments. This allows firms to use their resources to aid in the development of products and enhance the supply chain. In November 2021, Merck & Co Inc. announced that it has acquired Acceleron Pharma, this acquisition would help Merck & Co to expand their cardiovascular portfolio and pipeline.

Active Pharmaceutical Ingredients Market Segmentation

Grand View Research has segmented the global active pharmaceutical Ingredients market based on the type of synthesis, type of manufacturer, type, application, type of drug and region:

Based on the Type of Synthesis Insights, the market is segmented into Biotech and Synthetic.

  • The synthetic API segment accounted for the largest revenue share of 72.6% in 2021. This is attributed to the higher availability of raw materials and easier protocols for the synthesis of these molecules. Many synthetic molecules are also expected to go off-patent in the coming years, which is anticipated to boost growth.
  • The biotech segment is anticipated to witness significant growth of 7.1% during the forecast period. This segment is driven by factors such as increasing demand for biopharmaceuticals and the higher efficiency of these molecules.

Based on the Type of Manufacturer Insights, the market is segmented into Captive APIs and Merchant APIs.

  • The captive API segment accounted for the largest revenue share of 51.5% in 2022. It is anticipated to grow at a significant rate in the upcoming years owing to the easy availability of raw materials and extensive investments by major players to develop high-end manufacturing facilities.
  • Major companies are looking to leverage their production capabilities in Asian countries in an attempt to provide APIs to other drugmakers. Apart from major players Government of India has also planned to provide impetus to domestic API manufacturing.

Based on the Type Insights, the market is segmented into Generic APIs and Innovative APIs.

  • Innovative APIs held the largest share of 47.07% in 2022. This growth is attributed to increasing R&D initiatives for novel drug development and favorable government regulations.
  • A rise in demand for targeted therapies with high potency API compounds, such as HPAPI, is anticipated to increase the demand for personalized medicines. The patent expiry of branded molecules is a key factor that can be attributed to the lucrative growth of generic API drugs. The generic drug market is anticipated to exhibit a high growth rate in countries such as Brazil and India, owing to high unmet clinical needs and acceptance of OTC drugs.

Based on the Application Insights, the market is segmented into Cardiovascular Diseases Oncology, CNS and Neurology, Orthopedic, Endocrinology, Pulmonology, Gastroenterology, Nephrology, Ophthalmology and Others.

  • The cardiovascular diseases segment accounted for the largest revenue share of 21.54% in 2022. This is attributed to the increasing prevalence of target diseases worldwide.
  • The oncology segment is anticipated to witness significant growth of 7.6% during the forecast period. Factors such as changing lifestyles and the growing prevalence of cancer are driving the market.

Based on the Type of Drug Insights, the market is segmented into Prescription Drugs and Over-the-counter Drugs.

Active Pharmaceutical Ingredients Regional Outlook

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East & Africa (MEA)

Key Companies Profile

The market for active pharmaceutical ingredients operates with high complexity. A blockbuster drug patent expiration, increasing outsourcing activities due to high manufacturing costs, and stringent regulations on the production of APIs are expected to maintain the competitive rivalry at a high level during the forecast period.

Some prominent players in the global Active Pharmaceutical Ingredients market include

  • Merck & Co., Inc.
  • AbbVie, Inc.
  • Bristol-Myers Squibb Company
  • Boehringer Ingelheim International GmbH
  • Cipla, Inc.
  • Teva Pharmaceutical Industries Ltd.
  • Albemarle Corporation
  • Viatris Inc.
  • Aurobindo Pharma
  • Sun Pharmaceutical Industries Ltd.
  • Reddy’s Laboratories Ltd.

Order a free sample PDF of the Active Pharmaceutical Ingredients Market Intelligence Study, published by Grand View Research.

About Grand View Research

Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research Helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.


Sherry James

Corporate Sales Specialist, USA

Grand View Research, Inc.

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