The Europe active pharmaceutical ingredients (API) market size was estimated at USD 42.85 billion in 2022 and is expected to hit around USD 75.02 billion by 2032, poised to reach at a notable CAGR of 5.76% during the forecast period 2023 to 2032.
The Europe Active Pharmaceutical Ingredients (API) market is a vital component of the pharmaceutical industry, serving as the foundation for the development and production of a wide array of medications. As one of the world's leading regions in pharmaceutical research and production, Europe plays a significant role in shaping the global pharmaceutical landscape. This overview delves into the key aspects and dynamics that define the Europe API market.
The Europe Active Pharmaceutical Ingredients (API) market is experiencing robust growth due to several key factors. Firstly, the region's aging population and increasing healthcare needs are driving the demand for a wide range of pharmaceutical products, creating a steady demand for APIs. Secondly, the pharmaceutical industry's continuous expansion and innovation, particularly in biopharmaceuticals, are boosting the requirement for specialized APIs. Thirdly, advancements in manufacturing technologies, including continuous processing and automation, are enhancing production efficiency, reducing costs, and increasing API output. Additionally, stringent regulatory standards enforced by European health authorities ensure the production of high-quality, compliant APIs, further bolstering market growth. Lastly, the trend of pharmaceutical companies outsourcing API production to specialized manufacturers, both within Europe and globally, is contributing to the market's expansion, ensuring a steady supply of critical pharmaceutical ingredients.
Europe Active Pharmaceutical Ingredients (API) Market Report Scope
|Market Size in 2023||USD 45.32 Billion|
|Market Size by 2032||USD 75.02 Billion|
|Growth Rate From 2023 to 2032||CAGR of 5.76%|
|Forecast Period||2023 to 2032|
|Segments Covered||Type of synthesis, type of manufacturer, type, type of drug, application, country|
|Market Analysis (Terms Used)||Value (US$ Million/Billion) or (Volume/Units)|
|Report Coverage||Revenue forecast, company ranking, competitive landscape, growth factors, and trends|
|Key Companies Profiled||Merck & Co., Inc.; AbbVie, Inc.; Bristol-Myers Squibb Company; Boehringer Ingelheim International GmbH, Cipla, Inc.; Teva Pharmaceutical Industries Ltd.; Albemarle Corporation; Viatris Inc.; Aurobindo Pharma; Sun Pharmaceutical Industries Ltd.|
Europe Active Pharmaceutical Ingredients (API) Market Dynamics
An aging population and rising healthcare demands across Europe are fueling the demand for a diverse range of pharmaceutical products, thereby driving the need for APIs.
The development of biologic drugs, including monoclonal antibodies and vaccines, is a major driver of the API market. These complex therapies require specialized biotechnological APIs.
The Europe API market operates within a highly regulated environment, with rigorous quality and safety standards set by authorities like the European Medicines Agency (EMA). Compliance with these standards can be resource-intensive and time-consuming for API manufacturers.
There is a growing demand for environmentally friendly API production methods as sustainability gains importance. Meeting these eco-friendly requirements necessitates investments in green technologies and practices, potentially adding to production costs.
The growing demand for biologic drugs, such as monoclonal antibodies and vaccines, presents a significant opportunity for specialized biotech API manufacturers to meet the needs of this expanding market segment.
As pharmaceutical companies continue to invest in research and development, there is a continuous demand for novel and specialized APIs to support innovative drug development programs, creating opportunities for API suppliers.
Adherence to complex and rigorous regulatory standards, such as those set by the European Medicines Agency (EMA), can be resource-intensive and time-consuming for API manufacturers.
The growing demand for environmentally friendly API production methods necessitates investments in green technologies and practices, potentially adding to production costs.
Type Of Synthesis Insights
The synthetic segment held the market with the largest revenue share of 70.19% in 2022. Compared to natural molecules, the segment's dominance is attributed to its ready availability. Synthetic molecules offer consistency in terms of quality, purity, and potency. The manufacturing process of synthetic molecules can be standardized, which ensures that every batch of active pharmaceutical ingredients produced is identical in composition and quality. Furthermore, they are cost-effective. This is because the manufacturing process for natural molecules can be complex and time-consuming, which makes them more expensive to produce. In addition, the rising demand for generic drugs further boosts the API market growth. APIs for generic drugs generate high revenue for chemical and synthetic API manufacturing companies.
On the other hand, Biotech is predicted to grow at the remarkable CAGR of 6.5% during the forecast period. The growth of the biotech API segment can be attributed to high investments in the biotechnology and biopharmaceutical sectors. This allows the innovation of new molecules that aid in the treatment of diseases such as cancer. Pharma companies are aiming to invest in biologics and scale up production capacities to meet the rising demand for biotech API-based products, which, in turn, is expected to drive the market.
Type Of Manufacture Insights
The captive API segment generated the maximum market share share of 51.09% in 2022. The dominance is attributed due to high investment by market players to develop high-end manufacturing facilities. Captive APIs are often used by the major and bigger players in the market that have significant resources to invest in their infrastructure and technology. These organizations can create highly customized APIs that are tailored to their specific needs and can integrate them seamlessly with their products, manufacturing systems, and processes. Furthermore, captive APIs offer greater control over the quality and supply chain of products allowing the companies with their own API manufacturing to integrate backward and reduce reliance on suppliers.
The merchant API segment is is expected to grow at the fastest CAGR of 7.67% during the forecast period Captive production of APIs is expensive; pharmaceutical manufacturing companies have initiated outsourcing of active pharmaceutical ingredients production to minimize expenses and eliminate the need for investing in expensive equipment and sophisticated infrastructure. The outsourcing trend is a major factor influencing the growth of regional contract manufacturers, such as Seqens.
The generic API segment dominated the market, registered the maximum market share of 56.29% in 2022. The market is expected to grow at the fastest CAGR of 7.39% during the forecast period , attributable to the cost-effectiveness of generic APIs when compared to branded APIs, and thus aids in the reduction of cost for developing and manufacturing pharmaceutical products. Moreover, the patent expiry of branded molecules is a key factor that can be attributed to the lucrative growth of generic API-based drugs. As per European Fine Chemicals Group, Europe's major generic API manufacturing countries are Spain and Italy, with over 350 small- and large-scale companies in the region. These factors has helped to drive the growth of the generic API market in the region.
The innovative API segment is projected to show lucrative growth over the forecast period. These molecules are developed through a lengthy process that involves extensive research, testing, and clinical trials to determine their safety and effectiveness. Factors such as increasing demand for new and more effective treatments, advancements in technology and research, and growing investments in research and development by pharmaceutical companies drive the growth of innovative APIs.
The cardiology segment registered the maximum market share of 21.45% in 2022. owing to the high prevalence of cardiovascular diseases and the increase in product availability. The prevalence of cardiovascular disorders is increasing due to several factors, such as lifestyle changes, obesity, and excessive alcohol use. Thus, early detection and effective treatment are crucial to reduce mortality. Europe has a highly advanced healthcare infrastructure, with well-equipped hospitals and clinics. This has led to increased adoption of advanced cardiovascular disease treatments, which has driven the demand for APIs and pharmaceuticals used in these treatments.
The oncology segment is accounting to expand with the fastest CAGR of 7.42% over the forecast period owing to the rising prevalence of cancer in Europe. According to the ESMO report, 1.2 million people worldwide are projected to die from cancer in 2023. Several companies have been investing heavily in R&D to create medications that are tailored to novel biomarkers. The presence of various APIs in the marketplace for different types of cancer is expected to drive the segment growth further. Some oncology active pharmaceutical ingredients are Imatinib by Novartis AG and Trastuzumab, Bevacizumab, & Rituximab by F. Hoffmann-La Roche Ltd.
Type Of Drug Insights
The prescription segment dominated the largest share of 78.45% in 2022. The dominance of this segment can be attributed to Europe’s stringent regulations for pharmaceuticals, including APIs. Prescription drugs require higher regulation and oversight levels than over-the-counter (OTC) drugs. These regulations ensure that the drugs are safe and effective, which helps to build trust among healthcare providers and patients.
Moreover, prescription drugs dominate the market in the oncology segment. Cancer is primarily treated using chemotherapy, immunotherapy, targeted therapy, and hormonal therapy. The number of prescriptions generated for targeted therapies is increasing rapidly, owing to the higher efficacy of novel targeted therapies. Major players are launching novel targeted therapies. For instance, in March 2021, Novartis announced the approval of ofatumumab in Europe, a unique product used to treat multiple sclerosis and can be self-administered.
The OTC segment is expected to grow at the fastest CAGR of 5.85% during the forecast period. The OTC segment is expected to continue growing in the coming years as more consumers seek self-care solutions for their health needs. However, consumers need to consult their healthcare provider before taking any OTC medication to ensure that it is safe and effective for their specific health conditions.
Germany led the Europe API market with the largest market share of 18.34% in 2022. Germany's robust and well-established pharmaceutical industry has been operating for many years. The country has many pharmaceutical companies that manufacture APIs, with a strong reputation for producing high-quality active pharmaceutical ingredients. The presence of key market players in Germany and an increasing focus on geographic expansion with product launches drive the API market in Germany. For instance, in May 2020, Evonik invested approximately USD 30 million to expand the capacity of its German API facility to meet the region's future API demands. Germany is considered a leader in API production in Europe. However, the country relies on Asia for 63% of its API raw material requirements. In February 2021, BioNTech announced its new production facility for mRNA, which is used as an API in COVID-19 vaccines in Marburg, Germany.
Spain is anticipated to grow with the fastest CAGR of 7.04% over the forecast period. Spain’s pharmaceutical sector has continued to receive major investments, which is anticipated to influence the API market positively. Moreover, in May 2021, Sandoz invested USD 150 million to expand its production site in Palafolls, Spain.
Some of the prominent players in the Europe Active Pharmaceutical Ingredients (API) Market include:
Segments Covered in the Report
This report forecasts revenue growth at country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2020 to 2032. For this study, Nova one advisor, Inc. has segmented the Europe Active Pharmaceutical Ingredients (API) market.
By Type of Synthesis
By Type of Manufacturer
By Type of Drug