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The Global Active Pharmaceutical Ingredients (API) Market: Evaluating Challenges, Opportunities, Innovations and the Market Environment
Scripp Business Insights, February 2010, Pages: 146
Active pharmaceutical ingredients (APIs), also known as ‘bulk drug substances’, are defined by the US Food and Drugs Administration (FDA) as ‘any substance or mixture of substances intended to be used in the manufacture of a drug (medicinal) product and that, when used in the production of a drug becomes an active ingredient of the drug product’.
Companies use APIs at a number of stages of pharmaceutical development, including in stability sample testing, general analytical testing and method development, as GMP (Good Manufacturing Practice) APIs in clinical trials, and as source materials for manufacturing marketed drugs.
Sourcing APIs from low-cost suppliers is a key strategy for pharmaceutical companies pressured by the emerging ‘patent cliff’. The model of vertical integration that dominated the pharmaceutical industry in the past century, characterized by tight control over all factions of the pharmaceutical manufacturing and development process is now being broken up. For example, UK-based AstraZeneca has stated that it is looking to outsource its entire API production between 2014 and 2019. There have been suggestions that this will be to China and India, although according to the company in November 2009, it has not yet made final decisions on outsourcing locations.
Key features of this report
Forecasts to 2014 for the global APIs market, including forecasts for biotechnology-based APIs and third-party generic APIs (APIs sold to other companies as opposed to consumed in-house).
- Evaluation and analysis of the key drivers and restraints impacting the global APIs market
- Analysis of the competitive landscape including company profiles for 19 API companies
- Analysis of the latest regulatory developments impacting the APIs market
Scope of this report
- Understand the size the global APIs market and what the forecasted growth is between 2010-2014
- Evaluate which market areas in the API industry have the most promise
- Evaluate what new technology areas are driving the APIs market.
- Understand the competitive landscape and the key strategies undertaken by the leading APIs companies
Key Market Issues
- Outsourcing the production of APIs, or if already outsourced, finding a cheaper supplier, is a key way of saving money at the API manufacturing stage, whether it is for APIs for preclinical or clinical trials, or for the production of finished drugs.
- Growth in the overall pharmaceutical market has slowed, as a result of patent expiries, generic encroachment, and price erosion, but growth is expected to revive from 2010, driven by increased demand for healthcare. Growth in the pharmaceutical market in-turn will drive expansion in the API market.
- API producers in Europe and the US have the advantages of offering high levels of regulatory compliance, and having advanced technological capabilities. However, the major disadvantage of using these companies is higher costs. API producers from the Asia Pacific region are gaining similar advantages by acquiring facilities in Europe and the USA.
Key findings from this report
- The overall growth rate for pharmaceuticals has slowed in the 2001-2008 period. Growth will accelerate from 2010 onwards, as the global economy begins to recover, although it will not hit pre-crisis levels.
- Going forward an overall growth rate of around 7.3% is projected for the global APIs market, which is higher than the growth rate expected in the overall drug market.
- The upcoming patent cliff is resulting in a surge in sales for generic APIs, which should comfortably outpace growth for innovator APIs over the next five years
- In 2008, China was the largest API-producing country in the world. By 2010, India is predicted to be the second-largest market, growing from 6.5% of the global API market to around 10.5% by 2010.
Key questions answered
- What is the size and growth rate of the global pharmaceutical market?
- What are the main trends driving the growth of the APIs market?
- How is the ‘patent cliff’ impacting API sales?
- What impact is the growth in biotechnology and also the emerging biosimilars market having on the APIs sector?
Challenges & Opportunities in the global APIs market Executive Summary
World market outlook
Patent expiries and the rise of generics
Chapter 1 Introduction
Small molecule production technologies
Changes in demographics and disease
Move from rural to urban living
Changes in healthcare spending
Rise of outsourcing
The counterfeit threat
Chapter 2 World Market Outlook
The global API market
API Sales by region
Chapter 3 Regulatory Environment
US GMP - Federal Food Drug and Cosmetic Act Section 501(a)(2)(B)
EU GMP – Directive 2004/27/EC
China GMP - GMP for pharmaceutical products
India GMP – Drugs and cosmetics rules Schedule M
Drug Price Competition and Patent Term Restoration Act (‘Hatch-Waxman Act’)
Supplementary protection certification (SPC)
The current regulatory environment for biosimilars
Chapter 4 Patent expiries and the rise of generics
Patent expiries and the API market
Case study - Cambrex
Chapter 5 Biotechnology
Biotechnology-based APIs – a definition
The biologics market
Biotechnology-based APIs – the market
APIs for biosimilars
Case study: Biobetters
Chapter 6 Competitive Landscape
Daiichi Fine Chemicals
Dr Reddy’s Laboratories
Teva Active Pharmaceutical Ingredients
Zhejiang Hisun Pharmaceutical
Chapter 7 Future Outlook
Key commercial opportunities and future drivers of growth
List of Figures
Figure 1.1: Annual population growth rate (%), 1987-2007
Figure 1.2: Percentage of population living in urban areas, 1990-2007
Figure 1.3: Top ten global projections of mortality and burden of disease, 2008-2030
Figure 1.4: Per capita total expenditure on health at average exchange rate (US$), 2000 & 2006
Figure 2.5: Global pharmaceutical market value ($bn), 2008-2014
Figure 2.6: Pharmaceutical market share, 2009
Figure 2.7: Market value of APIs 2004-2014
Figure 2.8: World pharmaceutical market by ATC code, 2008
Figure 2.9: US APIs sales ($bn), 2008-2014
Figure 2.10: Sales of new medicines launched 2004-2008
Figure 2.11: Changes in research sites 2001-2006
Figure 2.12: API producers and manufacturing plants in Italy, 1991-2008
Figure 2.13: Share of generic API exports to the US (%), 2008
Figure 3.14: FDA Overseas Inspections, 2002-2007
Figure 3.15: Total FDA Overseas Inspections, 2006-2009
Figure 4.16: Sales of generic and innovative API sales ($bn)
Figure 4.17: Sales growth in the generics market in the 12 months to September 2008
Figure 5.18: Sales by technology 2000-2014
Figure 5.19: Percentage of top 100 drugs 2000-2014
Figure 5.20: Global sales of biotechnology-based APIs ($m), 2007-2014
Figure 5.21: Global sales of biosimilar APIs and innovative biotechnology-based APIs ($bn), 2007-2014
Figure 6.22: Albermarle’s fine chemicals division net sales
Figure 6.23: Cambrex Gross sales
Figure 6.24: DSM employees by region
Figure 6.25: Ranbaxy API sales INRm
Figure 6.26: Sumitomo fine chemicals sales
List of Tables
Table 1.1: Key points in outsourcing
Table 3.2: Foreign pharmaceutical manufacturers registered to supply drugs to the US, 2007
Table 4.3: Selected patent expiries 2010-2015
Table 4.4: GlaxoSmithKline patent portfolio: Key products
Table 5.5: Selected biotechnology product patent expiries 2010-2018
Table 5.6: Biosimilars launched in Europe 2006-2009
Table 5.7: Selected biosimilar approvals expected in 2010 and later
- Albemarle Corporation
- Asymchem Laboratories
- Boehringer Ingelheim
- Cambrex Corporation
- Daiichi Fine Chemicals
- Dr Reddy’s Laboratories
- Matrix Laboratories
- Pfizer CentreSource
- Ranbaxy Laboratories
- SAFC Pharma
- Sumitomo Chemical
- Teva Active Pharmaceutical Ingredients
- WuXi AppTec
- Zhejiang Hisun Pharmaceutical