North America Active Pharmaceutical Ingredients Market Size, Share, Report 2024-2033
The North America active pharmaceutical ingredients market size was estimated at around USD 90.91 billion in 2023 and it is projected to hit around USD 144.18 billion by 2033, growing at a CAGR of 4.72% from 2024 to 2033.
The North America active pharmaceutical ingredients market stands as a vital component of the region's pharmaceutical industry, playing a pivotal role in the development and production of various medications.
The growth of the North America active pharmaceutical ingredients (API) market is propelled by various factors contributing to its dynamic expansion. One significant driver is the escalating prevalence of chronic diseases across the region, necessitating the production of a wide array of medications. Moreover, the increasing demand for generic drugs, driven by factors such as cost-effectiveness and patent expirations, further fuels market growth. Additionally, advancements in pharmaceutical manufacturing technologies enhance efficiency and enable the production of high-quality APIs. Regulatory reforms aimed at streamlining drug approvals and ensuring product safety also play a crucial role in fostering market expansion.
In 2023, the synthetic segment dominated the market with a substantial revenue share of 73%. The primary driving force behind this segment is the soaring demand for generic drugs. The utilization of APIs in the production of generic medications significantly contributes to the revenue surge for synthetic and chemical API manufacturers. Consequently, this trend is creating ample opportunities for Contract Development and Manufacturing Organizations (CDMOs). Moreover, the increasing trend of outsourcing is aimed at enhancing profitability by curtailing production costs, thereby opening up new avenues for market growth.
During the forecast period, the biotech API segment is poised to experience the most rapid expansion. This growth trajectory is fueled by escalating investments in the biopharmaceutical and biotechnology sectors. Such investments facilitate the innovation of novel molecules crucial in the treatment of diseases like cancer. Key market players are directing substantial attention towards biotech APIs due to their capacity for high revenue generation and profitability. Noteworthy advancements in biotech API manufacturing include the adoption of single-use bioreactors crafted from sterilized plastic and sealed using gamma radiation, exemplifying the sector's commitment to technological progress.
In 2023, the Captive APIs segment secured the largest market share, accounting for 52%. Numerous companies are investing significantly in addressing challenges and innovating new chemical methodologies for in-house API production. This strategic move not only aids in cost reduction but also mitigates the risk of contamination. The adoption of protein synthesis and artificial intelligence is expected to accelerate development processes, offering greater control and efficiency. Recent initiatives and developments by key industry players underscore a strong inclination towards in-house manufacturing as opposed to outsourcing.
Conversely, the Merchant APIs segment is forecasted to witness the swiftest growth throughout the forecast period. Contract manufacturing and outsourcing of API molecule development are burgeoning trends within the pharmaceutical sector. Given the high costs associated with captive API production, companies are increasingly turning to outsourcing to streamline expenses. Merchant APIs offer an attractive alternative by eliminating the need for hefty investments in equipment and infrastructure. Post-pandemic, major companies are ramping up their capacities to bolster their market presence. For instance, in May 2023, MilliporeSigma announced a USD 69 million investment to expand its U.S.-based facility, doubling its manufacturing capacity for Highly Potent Active Pharmaceutical Ingredients (HPAPI). This facility is specifically dedicated to the development and commercial manufacturing of Antibody Drug Conjugates (ADCs).
In 2023, the Innovative APIs segment emerged as the dominant force in the overall API market, capturing a significant revenue share of 68%. Moreover, it is poised to maintain this momentum by growing at the fastest Compound Annual Growth Rate (CAGR). This remarkable growth trajectory can be attributed to several factors, including increased funding and favorable regulatory frameworks supporting research and development (R&D) initiatives. Extensive research efforts in this domain have resulted in a pipeline brimming with novel innovative products, slated for launch in the near future.
In 2023, the Cardiology segment emerged as the leader in the API market, commanding a substantial revenue share of 22%. This dominance is largely attributed to the escalating prevalence of cardiovascular diseases globally. Cardiovascular ailments rank among the most pressing public health concerns worldwide, prompting extensive research into APIs tailored for this therapeutic area. Government-led initiatives, such as the National Cholesterol Education Program, aim to raise awareness regarding lipid and cholesterol-related disorders, thereby supporting medication-based interventions. With the prevalence of cardiovascular diseases on the rise and heightened awareness among the populace, the Cardiology segment is poised for significant growth over the forecast period, driving demand for APIs used in cardiovascular drug formulations.
Meanwhile, the Oncology segment is projected to experience the fastest growth rate during the forecast period. The mounting incidence of cancer serves as a primary driver for this market expansion. Collaborative efforts among pharmaceutical companies, research institutions, and regulatory bodies play a pivotal role in expediting drug development processes, ensuring patient safety, and fostering innovation in oncology therapeutics. A notable example of such collaboration occurred in March 2023 when Pfizer Inc. and Seagen Inc. announced a definitive merger agreement. Through this strategic alliance, Pfizer aimed to acquire Seagen, a renowned biotechnology company specializing in groundbreaking cancer treatments. The agreement entailed a cash transaction amounting to USD 229 per Seagen share, culminating in an enterprise value of USD 43 billion.
In 2023, the Prescription segment asserted its dominance in the market, capturing a substantial revenue share of 82%. The widespread adoption of prescription drugs hinges largely on physicians' prescriptions. While the utilization of prescription drugs like Proton Pump Inhibitors (PPI) for managing general conditions such as heartburn has reached a plateau due to various adverse effects, the prescription rate of Histamine-2 Receptor Antagonists (H2RA) has been impacted differently. In the oncology segment, prescription drugs reign supreme as cancer treatment primarily involves modalities like chemotherapy, targeted therapy, immunotherapy, and hormonal therapy. Additionally, the utilization of biologics is on the rise. The increasing efficacy of novel targeted therapies has led to a surge in prescriptions for these treatments, prompting major players to launch innovative targeted therapies into the market.
On the other hand, the Over-the-Counter (OTC) segment is poised to exhibit the fastest growth over the forecast period. OTC products enjoy widespread accessibility among the population and are significantly influenced by shifts in consumer behavior. Consumer preferences are evolving, transitioning from the use of antacids for heartburn towards prioritizing gut health through the consumption of probiotics. This paradigm shift presents ample opportunities for preventive products such as health supplements, nutraceuticals, and probiotics, while simultaneously impeding the growth of existing products.
In 2023, North America emerged as the leader in API market revenue, capturing the largest share of 39%. This achievement is fueled by the rising prevalence of cardiovascular, genetic, and other chronic diseases, coupled with significant advancements in drug development research within the region. North America boasts high-value manufacturing hubs specializing in complex and high-potency APIs, gene therapies, and biologicals, which are expected to drive further growth.
Within North America, the United States led the market with a commanding share of 92% in 2023. The presence of key industry players such as AbbVie Inc., Curia, Pfizer Inc. (Pfizer Center One), Viatris Inc., and Fresenius Kabi AG has positively influenced market growth. For instance, in February 2022, Viatris received FDA approval for Generic Restasis, a cyclosporine ophthalmic emulsion used in the treatment of dry eye disease.
Meanwhile, Canada is projected to exhibit the fastest growth rate over the forecast period. The growing interest of key market players in entering the Canadian market presents lucrative opportunities for market expansion. For example, in March 2022, Viatris Inc., in collaboration with Biocon, introduced the oncology biosimilar Abevmy in Canada. Furthermore, in July 2021, MediPharm Labs obtained a license from Health Canada for the manufacturing and sale of cannabis API in Canada.
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