In 2019, the pharmaceutical excipients market is worth $6.97bn (€6.28bn), with its revenues expected to reach $9.79bn (€8.82bn) by 2025, according to research conducted by Markets and Markets.
Factors that are boosting the market’s growth include technological advancements in functional and multifunctional excipients required for orphan drugs, which are being increasingly adopted.
In addition, the market appears to be driven by the rising uptake of biopharmaceuticals, as well as biosimilars, according to the M&M research report.
However, factors such as increasing regulatory stringency and the cost and time-intensive drug development process are expected to limit the growth of the market ‘to a certain extent’, the report suggests.
Increasing focus on generics drives the EU market
Expirations of drug patents in European countries, which open the road for generics manufacturing, such as in the case of Pfizer’s blockbuster Lyrica, have led the European Union (EU) market to account for the largest share of the global pharmaceutical excipients market.
According to the report, the EU market accounted for 36.6% of the global market in 2018, with revenues of $2.5bn in 2019, surpassing North America which accounted for the 31.1% of the global shares in 2018. M&M also suggests that the large revenues in the EU is due to “the presence of a number of pharmaceutical giants with large production capacities leading to high consumption of excipients.”
The EU market is expected to maintain a year-on-year growth of 5.1%, and see revenues of $3.4bn in 2025. According to the report, this is also due to the rising demand for co-processed multifunctional excipients.
However, the emerging markets across the Asia Pacific and Latin America are expected to grow at higher compound annual growth rates (CAGRs) of 8.4% and 7.3%, respectively. The report shows China, India, South Korea, and Brazil as having emerged as significant markets for pharmaceutical excipients, due to the low-cost manufacturing advantage and lower regulatory stringency.
Organic chemicals in high demand
Among the segments of the pharmaceutical excipients market, the manufacture of organic chemicals produced revenues of $5.8bn in 2019, accounting for 80% of the market.
By 2025, the organic chemicals market is projected to be worth $8.3bn, according to M&M, growing by 6.1% year-on-year. The segment is anticipated to continue dominating the market, as the organic chemicals are being used for the manufacture of the majority of the commercially available pharmaceutical formulations.
Oral drug formulations in particular, primarily require oleochemicals – this segment accounted for the largest share of nearly 40% of the organic chemicals market in 2018 and has projected revenues of $2.3bn in 2019.
Due to their importance in the manufacture of orally administered drug products, the oleochemicals area is expected to reach $3.6bn in 2025, growing at a CAGR of 7.8%, according to the report.
Topical formulations surpassing oral
In aggregate, excipients manufactured in oral formulations produced nearly 57% of the market revenues in 2019, at a total figure of $3.9bn. The M&M report foresees a year-on-year growth of 4.9% for this segment, with revenues of $5.2bn in 2025.
However, the anticipated growth of the topical drug delivery market worldwide, bolstered by multiple factors, is expected to push the excipients of topical formulations to surpass those of oral drug delivery methods.
According to the report, the excipients market for topical formulations will be growing by 7.4% year-on-year during the forecast period. This is also due to “better assimilation of topical excipients with liquid APIs and increased patient compliance due to sensorial effects on the dermal layer,” M&M states.