Active Pharmaceutical Ingredient CDMO Market Analysis

Active Pharmaceutical Ingredient CDMO Market Analysis

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Based on the product, the global market is classified into chemical APIs, biological APIs, and high potent APIs. The chemical APIs segment dominated the market with revenue of USD 60 billion in 2023.
 

• The rise in the prevalence of chronic disease, growing number of research and development activities by pharmaceutical and biotechnology companies coupled with adoption of chemical synthetic APIs are some of the factors that boost the growth of the market.
   
• Moreover, the market demand is expected to be driven by the increasing tendency of major pharmaceutical companies outsourcing, especially in traditional contract development and manufacturing organizations (CDMO) for active pharmaceutical ingredients (API).
   

Based on the indication, the global active pharmaceutical ingredient CDMO market is classified into oncology, cardiovascular diseases, diabetes, hormonal disorders, infectious diseases, and other indications. The oncology segment dominated the market with market share of 28.3% in 2023.
 

• The increase in prevalence of cancer cases globally is the major factor that raises the demand for novel cancer drug therapies. Also, continuous advancements in oncology research and drug development lead to the discovery of new therapeutic targets and molecules. This creates opportunities for API CDMOs to collaborate with pharmaceutical companies in the development and manufacturing of these innovative oncology drugs.
   

Based on drug, the active pharmaceutical ingredient CDMO market is classified into branded and generic. The branded segment is expected to exhibit 6.9% CAGR between 2024 - 2032.
 

• The factors such as an increase in the number of U.S. FDA approvals for new molecular entities and an increased focus on research and development, are driving the growth of this segment.
   
• Also, the extensive research & development activities have resulted in a pipeline that will likely contain many distinct compounds and be introduced throughout the projection period. Thus, widespread usage of APIs in the pipeline will spur the market growth during the analysis period.
   

Based on workflow, the active pharmaceutical ingredient CDMO market is classified into clinical and commercial. The commercial segment is expected to reach 108.4 billion by 2032.
 

• The demand for CDMO operations producing active pharmaceutical ingredients (APIs) is rising globally due to rising rates of chronic disease and mortality. This continuous rise will advance in manufacturing technologies such as continuous manufacturing, process optimization, and automation to improve the efficiency and quality of API production, thereby driving the demand for CDMO services.
   
• Furthermore, it is expected that growing investments in research and development (R&D) aimed at improving API production techniques will fuel the growth of the market.
   

Based on application, the active pharmaceutical ingredient CDMO market is classified into human and veterinary applications. The human application segment is expected to exhibit 6.7% CAGR between 2024 to 2032.
 

• As the incidence of chronic diseases such as cancer, cardiovascular diseases, and diabetes continues to rise globally, there's a growing demand for APIs used in the treatment of these conditions. Also, pharmaceutical companies are diversifying their supply chains and seeking cost-effective manufacturing solutions globally. Therefore, CDMOs offering competitive pricing, high-quality products, and reliable delivery timelines are favored partners for human API production, thereby augmenting the market growth.
   

Based on end-use, the active pharmaceutical ingredient CDMO market is classified into pharmaceutical & biotech companies, and academic & research institutes. The pharmaceutical & biotech companies’ segment accounted for USD 69.5 billion in 2023 and is expected to reach USD 125.3 billion by end of 2032.
 

• Pharmaceutical companies are increasingly outsourcing their API manufacturing processes to specialized CDMOs to focus on their core competencies such as drug discovery and marketing.
   
• Moreover, the various advantages offered by CDMO services such as regulatory compliance, customization and flexibility and cost reduction are the major factors that most of the pharmaceutical companies preferred to outsource the active pharmaceutical ingredient manufacturing process. Such advantages associated with outsourcing APIs will propel the growth of the market.
   

The active pharmaceutical ingredient CDMO market in U.S. is expected to exhibit 6.8% CAGR to reach USD 65.9 billion by 2032.
 

• The rise in the demand for specialty & biologic drugs that often require complex manufacturing processes and expertise in API production, driving the need for specialized API CDMO services in U.S.
   
• Also, the pharmaceutical companies in the U.S. strive to optimize manufacturing costs and achieve operational excellence to remain competitive in the global market. Outsourcing API production to CDMOs can help companies access specialized expertise and infrastructure while reducing overhead costs associated with in-house manufacturing.
   
• Thus, aforementioned factors along with presence of prevalent population is expected to accelerate the market growth.
   

Germany to experience the highest growth rate in the market, outstripping other countries in Europe in the assessment period.
 

• Pharmaceutical companies in Germany increasingly outsource API manufacturing to CDMOs to optimize costs, mitigate risks, and focus on core competencies. This trend fuels the growth of the API CDMO market in Germany, as companies seek reliable and experienced partners for API development and production.
   

The Asia Pacific active pharmaceutical ingredient CDMO market is expected to grow with a significant CAGR of 6.9% during the forecast period.
 

• Asia Pacific boasts a large pool of skilled scientists, engineers, and technicians with expertise in chemical synthesis, process development, and analytical testing. Therefore, the availability of a skilled workforce enables API CDMOs to deliver high-quality services and innovative solutions to clients, thereby driving the regional market expansion.
   
• Further, the rise in technological advancement in country is one of the major factors that increase the demand for API CDMO services.
   
• Countries such as China, Japan and India have been investing in biotechnology research and development, particularly in areas such as biopharmaceuticals, biosimilars, and biologics. Hence, API CDMOs with expertise in bioprocess development and manufacturing are well-positioned to capitalize on the growing demand for biotechnology-based APIs in the Asian market.