The Active Pharmaceutical Ingredient industry covers the process where active pharmaceutical ingredients are manufactured from raw materials. It’s one of the first steps in the Pharmaceutical Industry’s value chain and a very large market. And like so many other markets, Asia is having a pronounced effect on it.
The recent spurt in emerging markets has directly impacted the pharmaceutical industry. Rising affordability, enhanced life expectancy and improved standard of living are all providing impetus to the demand for pharmaceuticals. However, major regulatory changes in the United States and Europe along with rising labor costs in China are set to change the API landscape. As patterns in developed regions continue to remain flat and opportunities for growth shift from traditional markets, the API industry is expected to witness the rise of second wave emerging markets in countries such as Brazil, Mexico, South Korea and Taiwan.
Latin America’s regulatory oversight, investment in domestic specialty manufacturing capabilities, formation of a growing number of partnerships and infrastructure help this region to be an important area for sourcing low-cost, active pharmaceutical ingredients. On the other hand, Taiwanese API producers have gained recognition for high quality and international good manufacturing practices (GMP) compliance. For countries in Eastern Europe such as Ukraine, things started changing when GMP standards became obligatory for Ukrainian pharmaceutical producers in 2010. Ukraine’s regulatory improvements have also encouraged foreign pharmaceutical companies to increase their presence in the country, and an increasing number of collaborations are emerging between local Ukrainian manufacturers and foreign companies. Such developments are expected to provide a major impetus to the API space in Ukraine and other eastern European countries.
According to a new report, “Global API Market Outlook 2018”, in the wake of the above developments, the Global API industry is expected to grow at a CAGR of 9.4% from 2013-2018. The market has been divided into four major geographies which comprise Americas, Asia, Europe and the rest of the world. The top countries which will be responsible for the majority of API related activities include the likes of US, Italy, Japan, China, India and South Korea.
As the days of the blockbuster drugs start waning, more flexible manufacturing focused on personalized medicines can be seen as the future of the pharmaceutical business. Companies across Asia, particularly in China, India, South Korea and Japan are looking for new opportunities to supply a growing global business. Our understanding of these firms show that they are doing many of the right things. In the years ahead expect Asian API companies to emerge as lager, more dominant players.