What’s in for APIs in the future?

Active Pharmaceutical Ingredients (APIs) are chemically and biologically active components of drugs that have a direct effect on disease cure, mitigation, treatment, and prevention. Because of the increased use of drugs and biologics in disease treatment, the global API market has grown dramatically over the last few decades. The growing adoption of quality standards in API manufacturing, such as Good Manufacturing Practices (GMP), current GMP (cGMP), and the global adoption of International Conference on Harmonisation (ICH) guidelines, has aided in the improvement of safety standards.

On the other hand, the API industry is facing challenges such as shortening development time, lowering development costs, improving process design, and meeting quality standards without sacrificing profitability. A large number of innovative drugs that have gone off-patent in recent years are likely to have an impact on the global API market. To maintain profitability in a high volume, low value environment, technological innovations are urgently needed. Rising incidences of oncology, cardiovascular, diabetes, and lifestyle diseases, an increase in the number of hospitals and diagnostic centres, an increase in the geriatric population in developing countries, increased healthcare expenditure, and increased disease awareness and education are the major factors driving the market growth.

The Active Pharmaceutical Ingredients (API) Market is classified by API type, drug type, manufacturer, therapy area, and geography. The market is divided into two types of API: chemical API and biological API. The market is further divided into three types of drugs: innovative, generic, and over-the-counter (OTC).

According to market participants, the market is divided into two segments: captive (in-house) manufacturers and merchant (contract) manufacturers. Oncology drugs, nonsteroidal anti-inflammatory drugs, cardiovascular drugs, anti-diabetic drugs, neurology drugs, musculoskeletal drugs, and others are also segments of the market. Geographically, the market is divided into four regions: North America, Europe, Asia Pacific, and Latin America, and the Caribbean.

Top industry players’ primary growth strategies are inorganic growth via merger and acquisitions. For example, Ranbaxy recently acquired Sun Pharmaceutical, allowing the company to become India’s largest drug manufacturer. Similarly, in July 2014, Hospira completed the acquisition of Orchid Chemicals & Pharmaceuticals Ltd’s API manufacturing facility and associated R&D facility. Novartis AG, Sun Pharmaceutical Industries Ltd., Pfizer, Inc., Teva Pharmaceutical Industries Ltd., Mylan N.V., Dr. Reddy’s Laboratories, Actavis plc, Lonza Group AG, Hospira Inc., and BASF SE are among the companies profiled.