United States Active Pharmaceutical Ingredients (API) Market Size (2024 - 2029)

US Active Pharmaceutical Ingredients (API) Market Analysis

The United States Active Pharmaceutical Ingredients (API) market is expected to register a CAGR of 9.5% over the forecast period.

The COVID-19 pandemic impacted the entire pharmaceutical supply chain, along with disrupting the supply of APIs from India and China. As per the FDA in August 2021, the United States has less than 5% API sites. More than 80% of the APIs are used in critical therapeutic areas, and vital medications were imported from China and India. As per the same source, a vast scarcity of active pharmaceuticals was reported in the country as the Government of India temporarily banned the export of 26 medicines, including acetaminophen and several antibiotics. More than 40 Chinese manufacturers were placed under national restrictions too. This impacted the market growth during the pandemic in the United States. However, the United States government is engaged in making policies to set up API manufacturing sites in the country, which might take a long time. Thus, with released restrictions and resumed import-export activities United States continues to import essential medicines, as well as API for drug manufacturing from other countries to combat the shortage of drug supplies. Thus the studied market is expected to grow over the forecast period.

Certain factors propelling the market growth are the increasing prevalence of infectious, genetic, cardiovascular, and other chronic disorders, the growing adoption of biologics and biosimilars, and the rising prevalence of cancer, along with growing sophistication in oncology drug research.

The increasing prevalence and burden of chronic diseases, infectious diseases, and genetic disorders are driving the demand for effective and safe drugs. Due to this factor, the demand for active pharmaceutical ingredients is increasing, which is further anticipated to fuel market growth. For instance, as per the data published by CDC, in April 2022, an estimated 58.5 million United States adults have arthritis with an estimated 25.7 million adults limited in their usual activities. This number is expected to reach 35 million by 2040. Also, as per the 2022 statistics published by IDF, about 32 million people were suffering from diabetes in 2021 in the United States, and this number is estimated to reach 34.7 million and 36.2 million by 2030 and 2045, respectively. Thus, the high diabetic population in the country raises the company's focus on developing advanced and safe drugs which require a large amount of API, hence propelling the market growth.

The increasing development and clinical trials of biosimilar and biologics drugs as well as rising approvals for new therapeutic classes, are expected to increase their adoption by the physician and patients, which, in turn, is anticipated to raise the demand for APIs, thereby propelling the market growth. For instance, as per the data published by the United States Food and Drug Administration, in October 2022, 10 biologic drugs approved in 2022, namely Skysona (neurologic dysfunction), Zynteglo (ß-thalassemia), Alintity (Hepatitis C Virus), Priorix (measles, mumps, and rubella), Carvykti (relapsed or refractory multiple myeloma), Spikevax (COVID-19), and Anti-C3d ( IgG and C3d) products.

Various biosimilar utilization management programs were initiated to encourage the use and adoption of biosimilars which is expected to increase the demand for active pharmaceutical ingredients for fulfilling the high demand for biosimilars. For instance, Providence St Joseph Health, a United States nonprofit health system, has introduced a biosimilar utilization management program that encouraged using lower-cost biosimilars instead of the higher-cost bio-originators. With this program, the United States saved USD 26.9 million (2019-2020) in spending on prescription drugs. With the implementation of this program, the biosimilar adoption rate reached 62% in November 2020. Such initiatives are expected to boost market growth over the forecast period.

Furthermore, the rising activities in expanding manufacturing facility for APIs is contributing to market growth. For instance, in August 2021, Curia announced plans to expand its commercial manufacturing capacity at its Rensselaer, New York facility. This expansion increased the capability to flexibly manufacture complex Active Pharmaceutical Ingredients (APIs) and further strengthened Curia's ability to partner with customers, meeting small-scale to large-volume requirements with reliable delivery.

Therefore, owing to the aforementioned factors, the studied market is expected to grow over the forecast period. However, the drug price control policies in the country, stringent regulations for drug approvals, and high competition between API manufacturers are expected to impede the growth of the active pharmaceutical ingredients market over the forecast period.

US Active Pharmaceutical Ingredients (API) Industry Segmentation

An Active Pharmaceutical Ingredient (API) is a part of any drug that produces its effects. Some drugs, such as combination therapies, have multiple active ingredients to treat different symptoms or act in different ways. They are produced using highly technological industrial processes during research and development and the commercial production phase. 

The United States Active Pharmaceutical Ingredients (API) Market is Segmented by Business Mode (Captive API and Merchant API), Synthesis Type (Synthetic and Biotech), Drug Type (Generic and Branded), and Application (Cardiology, Oncology, Pulmonology, Neurology, Orthopedic, Ophthalmology, and Other Applications). The report offers the value (in USD billion) for the above segments.