The report, by Transparency Market Research, explains that while the pharmaceutical market has suffered over the past few years due to patent expirations, the demand for low-cost substitutes has led to an increase in demand for API manufacturing.
The market is segmented into biological APIs and synthetic chemical APIs, with biological APIs experiencing the most significant growth rate as more companies are involved in this segment.
Specifically, biosimilar approvals in Europe and the recent approval of Novartis' filgrastim biosimilar in the US have augmented the API market, in addition to the rising number of abbreviated new drug applications (ANDA).
According to the report, “In the past few years, the growth in ANDAs has in turn fueled the demand for APIs. In addition to this, the growth in filing drug master files (DMFs) from several Indian firms has fueled the overall APIs market.”
However, the market will likely encounter barriers because of strict European Union regulatory policies. The global market is also highly fragmented with more than 2,500 players.
The API manufacturing market is divided into contract manufacturing and captive, or in-house manufacturing. According to the report, in-house manufacturing is seeing a rapid decline in the market, due to its lack of profitability and increasing competition.
“Pharmaceutical companies are inclined towards API contract manufacturing rather than in-house API manufacturing owing to the increasing costs of research and development and the pressure to maintain low prices of finished goods,” the report said. “Thus, outsourcing of API production is increasingly being preferred by manufacturers.”