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The US active pharmaceutical ingredient (API) market size is estimated to grow by USD 16.51 billion, at a CAGR of 7.87% between 2023 and 2028. The report includes an in-depth analysis of drivers, trends, and challenges. It examines historical data from 2018-2022, besides analyzing the current market scenario.
Apart from the increased healthcare expenditure by the urban population in the US and a rapid surge in the aged population, the market stands to gain additional traction from the increase in the number of drug master files (DMF) filing. Five types of DMFs can be granted, each requiring a different type of information. Among them, type II DMF is the most common form and covers drug substances, substance intermediates, and materials used in the preparation of a drug product. The active pharmaceutical ingredient (API) market in US is rapidly emerging as pharmaceutical manufacturers are increasingly relying on API manufacturers to outsource bulk actives for manufacturing generic drugs and high-end, difficult-to-manufacture patented drugs. Thus, this increasing number of type II drug master files is expected to propel the development of the market during the forecast period.
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The market share by the captive API segment will be significant during the forecast period. Captive refers to the production of key pharmaceutical components within a vertically integrated company. In this context, the company that develops and manufactures the final drug product also produces its active ingredients, ensuring greater control over the entire supply chain. Furthermore, the global pharmaceutical industry is currently witnessing an increase in the expiration of patents on blockbuster drugs, which has decreased their demand significantly over the years.
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The captive API segment was valued at USD 14.98 billion in 2018. Furthermore, the increasing emphasis of healthcare regulatory authorities on quality control of APIs and their production facilities is a growing concern for manufacturers, resulting in increased dependency on in-house capabilities for the manufacturing of high-quality APIs. To overcome these barriers, innovators rely on their in-house capabilities for manufacturing APIs, which is the major factor driving the growth of this segment. Thus, major market players such as Pfizer, Novartis, Sanofi, and GlaxoSmithKline are investing in in-house capabilities, which will drive the segment and thereby expand the market during the forecast period.
The generic?segment will account for the largest share of this segment.?Generic are those that are subject to patent expiry and can be manufactured and marketed by a variety of manufacturers. Additionally, generic comprise therapeutic areas, including cardiovascular, central nervous system, respiratory, anti-diabetes, and other areas. This classification enables pharmaceutical companies to tailor their strategies to the specific requirements of each therapeutic segment by taking into account the prevalence of disease, patient's needs, regulatory needs, and pricing dynamics. Thus, such features and properties will drive the demand for generic APIs and will expand the growth of the active pharmaceutical ingredient (API) market in the US during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market. The report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
AbbVie Inc.: The company offers ingredients such as Biperiden, Cyclosporine, Dasabuvir, organometallic and gaseous HCl.
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
There are multiple factors influencing market growth. Our researchers analyzed the data with 2023 as the base year, along with the key trends, and challenges.
A paradigm shift in manufacturing is one of the primary market trends shaping development. Although the active pharmaceutical ingredient (API) market in US started catering to the early-stage intermediates, over time, outsourcing has penetrated across the value chain, including advanced intermediates to final dosage forms that are consumed by patients, particularly generic drugs. Further, the lifecycle of an API also influences the timing of outsourcing. In a post-discovery environment, multiple activities are required to be explored simultaneously.
Additionally, with the profitability of patented drugs, reducing the time to market can result in significant financial rewards. Outsourcing enables innovators as well as generic drug manufacturers to meet aggressive development timelines while capitalizing on great efficiencies in their own supply chain. Therefore, the paradigm shift from captive API manufacturing to contract API manufacturing is anticipated to have a positive impact on the market during the forecast period.
High investment costs and concern about huge loss is a significant challenge that affects market expansion. Establishing manufacturing facilities requires significant capital investment for infrastructure, technology, and compliance with stringent regulatory standards. This financial commitment poses a barrier for new entrants, and even existing companies are looking to expand their production capacity. The pharmaceutical industry is highly regulated, and compliance with quality standards, safety protocols, and Good Manufacturing Practices (GMP) is mandatory. Ensuring adherence to these regulations involves substantial costs for testing, validation, and continuous monitoring, contributing to the overall high investment burden.
Furthermore, the interconnected nature of the global pharmaceutical supply chain can expose companies to risks related to geopolitical events, trade disruptions, or global health crises. Companies investing extensively in production may face challenges in managing and mitigating these external risks. Thus, high investment costs and concerns of potential losses will hamper the growth of the market during the forecast period.
The market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
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Customer Landscape
The market research and growth report forecasts market growth analysis by revenue and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The market is a dynamic arena influenced by various factors ranging from technological advancements to drug price control policies. Pharmaceutical and biopharmaceutical players are continually engaged in R&D spending to develop new molecular entities (NMEs) that cater to the evolving needs of healthcare. However, challenges such as counterfeit drugs and unfavorable drug price control policies persist, impacting profits and reimbursement strategies.
Additionally, with the emergence of precision medicine and a deeper understanding of genes and lifestyles, clinical trials now focus on achieving pharmacologically effective drug concentrations while considering the rest of the body dynamics. The market's landscape is also shaped by regulatory frameworks such as the European Falsified Medicines Directive (FMD) and initiatives led by organizations like the WHO to combat falsified or fake medicines in low- and middle-income countries.
Furthermore, API suppliers are exploring various expression systems including mammalian, microbial, yeast, and insect systems, optimizing processes for protein folding and post-translational modification to ensure safety and efficacy for human use. The industry's collaborative efforts, highlighted through conferences, webinars, and partnerships, aim to streamline the legal supply chain and uphold quality standards in an ever-evolving EU pharmaceutical industry overseen by entities like the EU Intellectual Property Office (EUIPO).
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US Active Pharmaceutical Ingredient (API) Market Scope |
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Report Coverage |
Details |
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Page number |
147 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 7.87% |
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Market Growth 2024-2028 |
USD 16.51 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
6.79 |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
AbbVie Inc., Amneal Pharmaceuticals Inc., Apotex Inc., Aurobindo Pharma Ltd., Bristol Myers Squibb Co., Cadila Pharmaceuticals Ltd., Cambrex Corp., Cipla Ltd., Dr Reddys Laboratories Ltd., GlaxoSmithKline Plc, Koninklijke DSM NV, Lupin Ltd., Merck KGaA, Novartis AG, Pfizer Inc., Sanofi SA, Sun Pharmaceutical Industries Ltd., Teva Pharmaceutical Industries Ltd., Thermo Fisher Scientific Inc., and Viatris Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Product
8 Market Segmentation by Application
9 Customer Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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