|
Forecast
Period
|
2025-2029
|
|
Market
Size (2023)
|
USD
63.52 Billion
|
|
Market
Size (2029)
|
USD 78.45 Billion
|
|
CAGR
(2024-2029)
|
3.81%
|
|
Fastest
Growing Segment
|
Injectable
|
|
Largest
Market
|
United
States
|
Market Overview
North America Active Pharmaceutical
Ingredients Market was valued at USD 63.52 billion in 2023 and is anticipated
to reach USD 78.45 Billion with a CAGR of 3.81% during the forecast period. The
North America Active Pharmaceutical Ingredients (API) market is a dynamic and
thriving sector within the pharmaceutical industry. API are the essential
components that constitute the active ingredients in pharmaceutical drugs,
playing a crucial role in drug formulation and manufacturing. This market
encompasses the United States and Canada, two of the world's leading
pharmaceutical markets, and is characterized by innovation, advanced
technology, and stringent regulatory standards.
Key factors driving the North America
API market include the region's robust pharmaceutical and biotechnology
industries, increasing prevalence of chronic diseases, and a growing elderly
population with higher healthcare needs. The region's commitment to research
and development, coupled with substantial investments in healthcare
infrastructure, further propels API demand. The market also benefits from
strong intellectual property protection and a well-established regulatory
framework, which ensures quality and safety. Notably, the COVID-19 pandemic has
underscored the significance of a resilient pharmaceutical supply chain,
increasing the focus on domestic API production. As a result, there is a
growing interest in expanding API manufacturing capacity in North America,
reducing reliance on foreign suppliers, particularly from Asia. This trend is
expected to boost domestic API production and stimulate market growth.
The North America API market is
characterized by a diverse range of APIs, including chemical, biotechnological,
and plant-based APIs. The industry is witnessing continuous innovation, with an
emphasis on sustainable and environmentally friendly production methods.
Also, contract manufacturing organizations (CMOs) play a vital role in
the market, providing specialized expertise in API development and
manufacturing for pharmaceutical companies.
Key Market Drivers
Rising
Prevalence of Chronic Diseases
The North America Active Pharmaceutical
Ingredients (API) market is experiencing a significant boost due to the rising
prevalence of chronic diseases within the region. Chronic diseases, such as
diabetes, cardiovascular disorders, cancer, and respiratory illnesses, have
become increasingly prevalent among the North American population. Several
factors contribute to this trend, including changes in lifestyle, dietary
habits, and the aging demographic. For instance, Based
on data from the Centers for Disease Control and Prevention, between August
2021 and August 2023, the prevalence of diabetes among U.S. adults was 15.8% in
total, with 11.3% being diagnosed cases and 4.5% remaining undiagnosed. The aging population in North America is
a significant driver behind the surge in chronic diseases. As people grow
older, they become more susceptible to health issues that require long-term
management and medication. Consequently, the pharmaceutical industry is
continuously developing and introducing innovative drugs to address the
healthcare needs of the aging population. These drugs heavily rely on active
pharmaceutical ingredients, intensifying the demand for APIs.
The sedentary lifestyle and
dietary choices in modern society have led to an epidemic of obesity, which is
a known risk factor for chronic diseases such as diabetes and cardiovascular
disorders. This has further compounded the prevalence of these conditions and
the need for pharmaceutical interventions, increasing the demand for APIs. The ongoing rise in chronic diseases has
intensified the research and development efforts within the pharmaceutical
industry. Companies are committed to developing new and improved drugs to
tackle these conditions effectively, making APIs indispensable in the
formulation of these advanced therapeutic solutions. The pursuit of safer, more
efficient, and patient-friendly medications has resulted in a robust API
market, as pharmaceutical companies invest significantly in drug development
and production.
The North American
healthcare system's focus on providing comprehensive care to manage chronic
diseases has further fueled the demand for pharmaceutical drugs. With the
increasing emphasis on early diagnosis and effective treatment, patients often
require a combination of medications, many of which rely on APIs to deliver
their therapeutic effects.
Aging
Population
The aging population in North America is
a significant driving force behind the burgeoning North America Active
Pharmaceutical Ingredients (API) market. As the demographic landscape of the
region shifts, with a substantial portion of the population entering their
senior years, the healthcare and pharmaceutical industries are experiencing a
profound transformation. This demographic shift has profound implications for
the demand and growth of the API market.
The elderly population is more prone to
various chronic conditions and age-related diseases, necessitating an increased
need for pharmaceutical interventions. As people age, they often require a
spectrum of medications to manage these health issues effectively. This
substantial and sustained demand for pharmaceutical drugs directly fuels the
API market, as these active ingredients form the core of the therapeutic
medications prescribed to the elderly. Also, with advancements in
medical science, there is a growing emphasis on the development of medications
and therapies tailored to the specific healthcare needs of the elderly
population. This specialized approach necessitates the production of a wide
range of pharmaceutical drugs, each relying on specific APIs, contributing to
the robust growth of the API market.
The aging population also leads to a
heightened focus on research and development within the pharmaceutical
industry. Pharmaceutical companies are increasingly investing in R&D to
create innovative drugs and treatments for age-related conditions, including
neurological disorders, cardiovascular diseases, and various forms of cancer.
APIs are indispensable in the formulation of these advanced medications, and
their growing demand is a testament to the pharmaceutical sector's commitment
to meeting the evolving healthcare needs of the elderly. In addition, as the aging population
places greater demands on healthcare systems, there is an increasing
recognition of the importance of early diagnosis and treatment for age-related
conditions. This comprehensive approach often involves the use of multiple
medications, each incorporating APIs to provide therapeutic benefits.
Consequently, the aging population has become a key factor in shaping the
growth trajectory of the North America API market.
Strong
Focus on Research and Development
The North America Active Pharmaceutical
Ingredients (API) market is experiencing significant growth and expansion due
to the strong emphasis on research and development (R&D) within the
pharmaceutical industry. The region has firmly established itself as a global
leader in drug innovation and development, and this commitment to R&D is a
key driver of the API market's success. Pharmaceutical companies in North
America continuously invest in R&D to discover and develop innovative drugs
and therapies to address a wide range of health conditions. These
groundbreaking drugs often rely on APIs as their core components, driving the
demand for high-quality active pharmaceutical ingredients. The pharmaceutical
industry's relentless pursuit of more effective and safer drugs underscores the
importance of APIs in drug formulation. In January 2023, Eurofins disclosed its strategic decision to enhance its API development laboratories by relocating to a new facility in Ontario, Canada, which includes an expansion.
The strong focus on R&D has also led
to the emergence of North America as a hub for biotechnology and pharmaceutical
research. The region is home to numerous world-class research institutions,
universities, and biotech startups, fostering an environment conducive to
groundbreaking discoveries. These institutions collaborate with pharmaceutical
companies to develop cutting-edge medications, many of which incorporate APIs.
This synergy between academia, research institutions, and pharmaceutical companies
creates a constant demand for active pharmaceutical ingredients.
In addition, the North American
pharmaceutical industry's commitment to innovation extends to the development
of novel drug delivery systems and technologies. These innovations aim to
enhance the efficacy and safety of drugs, leading to the creation of new drug
formulations that rely on APIs. These advanced drug delivery systems often
involve complex API interactions, resulting in a surge in API demand. Also, the stringent regulatory
standards in North America, including the United States Food and Drug
Administration (FDA) and Health Canada, promote the highest quality and safety
of pharmaceutical products. These regulations necessitate extensive research
and testing throughout the drug development process, increasing the reliance on
APIs to meet these rigorous standards. Pharmaceutical companies must ensure
that their APIs meet these quality requirements, further boosting the demand
for APIs that are produced to stringent specifications.
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Key Market Challenges
Intellectual
Property Issues
The North America Active Pharmaceutical
Ingredients (API) market, a vital component of the pharmaceutical industry,
plays a pivotal role in drug development and manufacturing. However, it faces a
significant challenge in the form of intellectual property (IP) issues, which
can hinder market growth and innovation. These issues are a result of the
intricate patent landscape governing pharmaceuticals and the competition
between originator and generic drug manufacturers.
One of the central challenges stems from
the prevalence of patents on pharmaceutical drugs and their respective APIs.
Patents provide pharmaceutical companies with exclusive rights to produce,
market, and sell a particular drug, often for a substantial period. These
patents create a monopoly for the originator company, allowing them to set high
prices and reap significant profits from their drug. The expiration of patents is a key
trigger for competition and the entry of generic drug manufacturers into the
market. Generic manufacturers can produce equivalent versions of branded drugs,
offering them at a lower cost. While this competition benefits consumers by
reducing drug prices, it poses challenges for originator companies and API
manufacturers.
API manufacturers are often tied to
patent holders, providing them with the necessary active ingredients for the
production of branded drugs. When patents expire, generic manufacturers seek
alternative sources for these APIs, often at lower prices. This can lead to a
decline in revenue for both originator and API manufacturers, hindering their
financial resources for research and development.
Price
Competition
The North America Active Pharmaceutical
Ingredients (API) market, a vital component of the pharmaceutical industry,
faces a significant hurdle in the form of price competition. While competition
is generally seen as a driving force in markets, excessive price competition
can have adverse effects on the API sector, potentially hindering its growth
and sustainability. Price competition in the pharmaceutical
industry is driven by several factors. These include the growing demand for
cost-effective healthcare solutions, patent expirations that open the door for
generic drug manufacturers, and the continuous pressure on healthcare budgets.
While cost-effective pharmaceuticals benefit patients and healthcare systems,
the intense competition often puts pressure on API manufacturers.
One of the primary challenges arising
from price competition is the erosion of profit margins for API manufacturers.
As pharmaceutical companies seek to lower their production costs, they exert
pressure on API suppliers to provide active ingredients at increasingly
competitive prices. This can lead to API manufacturers operating with
razor-thin profit margins, limiting their ability to invest in research and
development (R&D) and innovative processes. Price competition also influences
investment decisions. To remain competitive, API manufacturers may opt for
cost-cutting measures, such as outsourcing to regions with lower labor and production
costs. While these measures can lead to lower API prices, they may also
compromise quality control and transparency in the production process,
potentially impacting the safety and efficacy of the final pharmaceutical
products.
Key Market Trends
Increased
Focus on Biotechnology APIs
The North America Active Pharmaceutical
Ingredients (API) market is experiencing a significant boost due to the
increased focus on biotechnology-derived APIs. Biotechnology APIs, a class of
active ingredients produced through advanced genetic engineering and
recombinant DNA technology, have emerged as a pivotal trend driving growth
within the pharmaceutical industry. This trend is fueled by the region's
commitment to cutting-edge biopharmaceutical research and development, leading
to a surge in demand for biotechnology APIs.
Biotechnology APIs offer a unique
advantage in providing targeted and highly effective treatments, particularly
in the case of complex and chronic diseases. The North America API market is
witnessing a significant expansion in the production of biologics, including
monoclonal antibodies, gene therapies, and vaccines, which rely on these
advanced ingredients. The precision and efficacy of biotechnology APIs have
made them a favored choice for addressing unmet medical needs, further
propelling their demand in the market.
The increasing focus on
personalized medicine is driving pharmaceutical companies to explore the
potential of biotechnology APIs. These APIs are essential for the development
of tailored therapies that cater to an individual's specific genetic makeup,
health history, and lifestyle. The move toward personalized medicine emphasizes
the need for innovative and highly specialized APIs that can target precise
molecular pathways and specific patient populations. The biotechnology API trend aligns with
the broader shift in the pharmaceutical industry towards advanced therapeutic
solutions. As the region continues to invest in biopharmaceutical R&D and
biomanufacturing capabilities, the North America API market is poised to remain
at the forefront of pharmaceutical innovation. The versatility of biotechnology
APIs and their potential to revolutionize drug development and treatment
options ensure their continued relevance and impact on the market, making them a
cornerstone of the North American healthcare ecosystem.
Demand
for High-Potency APIs (HPAPIs)
The rising demand for High-Potency
Active Pharmaceutical Ingredients (HPAPIs) is emerging as a significant driver
of growth in the North America Active Pharmaceutical Ingredients (API) market.
HPAPIs are a class of pharmaceutical ingredients known for their exceptionally
high potency and are designed for use in specialized drug formulations,
particularly in the treatment of complex and life-threatening diseases, such as
cancer.
One of the key factors fueling the
demand for HPAPIs in North America is the growing prevalence of critical
medical conditions like cancer. These illnesses often require precise and
targeted treatments that rely on HPAPIs for their high potency and specificity
in affecting disease pathways. As the region witnesses an increasing incidence
of such diseases, pharmaceutical companies are compelled to develop new and
advanced oncology drugs and precision medicines. These innovative treatments
are heavily reliant on HPAPIs, which serve as the cornerstone of their
formulations, ultimately boosting the demand for these potent ingredients.
HPAPIs are crucial in the
production of highly specialized drugs that require extreme precision,
particularly in drug targeting and personalized medicine. The focus on
personalized medicine has gained prominence in North America, where the healthcare
sector is increasingly shifting toward tailoring treatments to an individual's
specific genetic makeup and medical history. HPAPIs play an essential role in
this trend, as they provide the required potency and specificity to create
therapies that target precise molecular pathways and address unique patient
needs. The demand for HPAPIs has catalyzed
significant investments in research and development within the pharmaceutical
industry. Pharmaceutical companies are consistently investing in the
development of innovative treatments and precision medicines, which, in turn,
rely on the production of HPAPIs. This trend fosters innovation in the API
market, as companies aim to create more potent and effective high-potency
ingredients.
Segmental Insights
Type
of Manufacturers Insights
Based on
the Type of Manufacturers, Contract manufacturers emerged as the dominant segment
in the North America market for North America Active Pharmaceutical Ingredients
Market in 2023. Pharmaceutical
companies in North America increasingly opt to outsource API manufacturing to
contract manufacturers. This strategic choice allows them to focus on core
competencies, such as research and development, while leveraging the expertise
and capabilities of contract manufacturers for API production. Contract
manufacturers often offer cost-efficient solutions for API production,
particularly in regions with lower labor and production costs. This cost
advantage is a significant driver for pharmaceutical companies seeking to
optimize their supply chain and manufacturing processes. Contract manufacturers
provide scalability and flexibility in API production. They can adjust
production volumes to meet market demands, enabling pharmaceutical companies to
respond quickly to changing market conditions and fluctuations in demand.
Route
of administration Insights
Based on the Route of administration,
Injectable APIs emerged as the dominant segment in the North America market for
North America Active Pharmaceutical Ingredients Market in 2023. Injectable
medications are essential in the treatment of critical medical conditions,
including life-threatening diseases, emergency situations, and conditions
requiring rapid drug delivery. North America's healthcare system places a
strong emphasis on addressing such critical conditions, leading to a substantial
demand for injectable APIs. Hospitals, clinics, and healthcare facilities in
North America widely use injectable medications, particularly for inpatient and
emergency care. The constant need for injectable APIs to support these settings
contributes to their high demand. Injectable APIs allow for precise and
targeted drug delivery, a crucial factor in the development of advanced and
innovative therapies. North America's commitment to cutting-edge medical
treatments necessitates the use of injectable APIs in various specialized
therapies.
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Country Insights
United
States emerged as the dominant player in the North America Active
Pharmaceutical Ingredients Market in 2023, holding the largest market share. The stringent regulatory
standards set by the United States Food and Drug Administration (FDA) ensure
that pharmaceutical products, including APIs, meet the highest quality and
safety requirements. Compliance with these standards necessitates the use of reliable
and high-quality APIs. The U.S. pharmaceutical industry is at the forefront of
innovation, continually seeking new and advanced therapies for various medical
conditions. Innovative drug development requires APIs that are specific,
efficient, and compliant with the latest medical advancements. The United States has a
diverse population with a wide range of healthcare needs, from chronic diseases
to rare disorders. This diversity necessitates a broad spectrum of
pharmaceuticals, all relying on APIs to deliver effective treatment.
Recent Development
- In July 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS), through its Office of Strategic Industries and Economic Security, in collaboration with the Department of Health and Human Services’ (HHS) Office of Industrial Base Management and Supply Chain (IBMSC), announced a comprehensive assessment of the U.S. Active Pharmaceutical Ingredient (API) industrial base. This initiative aims to analyze the supply chain network supporting U.S. pharmaceutical manufacturing. The findings will enable the federal government to better plan and allocate funding to ensure the security and availability of the API supply chain while addressing challenges such as limited domestic manufacturing capabilities.
- In
April 2023, Aurobindo Pharma announced that its board of directors approved the
transfer of its antibiotic active pharmaceutical ingredients (API) division to
its wholly-owned subsidiary, Apitoria Pharma Pvt Ltd. The transfer will be
executed through a slump sale via a business transfer agreement. This strategic
move was proposed to address the differing gross and net margin profiles
between the antibiotic API division and the company’s other business segments.
- In
October 2023, Cambrex announced the completion of a $38 million capacity
expansion at its small molecule active pharmaceutical ingredient (API)
manufacturing facility in High Point, North Carolina. The expansion has doubled
the facility’s manufacturing capacity and introduced advanced analytical and
chemical development laboratories, two additional clinical manufacturing
suites, and a small-scale commercial manufacturing operation equipped with
three work centers and 2,000-liter reactors.
Key Market Players
- Sun Pharmaceutical Industries Ltd
- Merck & Co., Inc.
- AbbVie, Inc.
- Bristol-Myers Squibb Company
- Boehringer Ingelheim International GmbH
- Cipla Limted
- Teva Pharmaceutical Industries Ltd.
- Albemarle Corporation
- Viatris Inc.
- Dr. Reddy’s Laboratories Ltd.
|
By
Type of Synthesis
|
By
Type of Manufacturers
|
By
Route of Administration
|
By
Therapeutic Application
|
By
Country
|
- Biotech
- Fermentation
- Plant Extracts
- Synthetic
|
|
|
- Cardiovascular Disease
- Oncology
- Neurological Disorders
- Orthopaedic disorders
- Respiratory
- Gastrointestinal Disorders
- Urology
- Others
|
- United States
- Canada
- Mexico
|
Report Scope:
In this report, the North America Active
Pharmaceutical Ingredients Market has
been segmented into the following categories, in addition to the industry
trends which have also been detailed below:
- North America Active
Pharmaceutical Ingredients Market, By Type of Synthesis:
o Biotech
o Fermentation
o Plant Extracts
o Synthetic
- North America Active
Pharmaceutical Ingredients Market, By Type of Manufacturers:
o In House
o Contract
- North America Active
Pharmaceutical Ingredients Market, By Route of administration:
o Oral
o Injectable
o Topical
- North America Active
Pharmaceutical Ingredients Market, By Therapeutic Application:
o Cardiovascular Disease
o Oncology
o Neurological Disorders
o Orthopaedic disorders
o Respiratory
o Gastrointestinal Disorders
o Urology
o Others
- North America Active
Pharmaceutical Ingredients Market, By Country:
o United States
o Canada
o Mexico
Competitive Landscape
Company Profiles: Detailed analysis of the major companies
present in the North America Active Pharmaceutical Ingredients Market.
Available Customizations:
North America Active Pharmaceutical Ingredients
Market report with the given market data, TechSci Research offers
customizations according to a company's specific needs. The following
customization options are available for the report:
Company Information
- Detailed analysis and
profiling of additional market players (up to five).
North America Active Pharmaceutical Ingredients
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the date of release, please contact us at [email protected]