Europe Active Pharmaceutical Ingredients (API) Market Size and Growth, Statistics 2024 to 2033

According to Latest Study, the Europe active pharmaceutical ingredients (API) market size was estimated at USD 45.43 billion in 2023 and it is expected to grow at a CAGR of 5.78% from 2024 to 2033, to reach around USD 79.69 billion by 2033.

Introduction to Active Pharmaceutical Ingredients (APIs)

In the pharmaceuticals, Active Pharmaceutical Ingredients (APIs) are the crucial components responsible for the therapeutic effects of medications. These are biologically active substances that exert pharmacological effects in the human body, providing the desired therapeutic outcome. APIs serve as the core ingredient in pharmaceutical formulations, ranging from tablets and capsules to injectables and topical creams. Without APIs, medications would be inert and ineffective.

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Overview of Europe’s Pharmaceutical Industry

Europe boasts a robust pharmaceutical industry, renowned for its innovation, quality, and regulatory standards. The region hosts numerous pharmaceutical companies, both large-scale manufacturers and specialized niche players. APIs play a pivotal role in driving the European pharmaceutical sector, serving as the foundation for the development and production of a diverse range of medications.

Report Highlights:

• The synthetic segment held the largest market share in 2023, accounting for 77% of the total revenue.
• Biotech is projected to experience the highest compound annual growth rate (CAGR) of 6.55% during the forecast period.
• Captive API emerged as the dominant segment in 2023, capturing 53% of the market revenue.
• The merchant API segment is poised to exhibit the most rapid growth rate throughout the forecast period, with a CAGR of 7.72%.
• Generic API led the market in 2023, comprising 58% of the total revenue.
• Cardiology stood out as the dominant segment in 2023, accounting for 23% of the revenue due to the high prevalence of cardiovascular diseases and increased product availability.
• Oncology is expected to witness the fastest CAGR of 7.45% over the forecast period, driven by the rising incidence of cancer in Europe.
• The prescription segment held the largest market share in 2023, capturing 80% of the total.
• Over the period from 2024 to 2033, the over-the-counter (OTC) segment is forecasted to experience the highest CAGR of 5.87%.

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Europe Active Pharmaceutical Ingredients (API) Market Top Trends:

• Increased Outsourcing: Pharmaceutical companies in Europe are increasingly outsourcing API manufacturing to specialized contract manufacturing organizations (CMOs) to reduce costs and focus on core competencies. This trend is fueled by the need for flexibility, scalability, and access to specialized expertise.
• Growing Biopharmaceuticals Segment: The demand for biopharmaceutical APIs, including monoclonal antibodies, recombinant proteins, and vaccines, is on the rise in Europe. Biologics offer targeted therapies for various diseases and present significant opportunities for innovation and market growth.
• Emphasis on Quality and Compliance: Stringent regulatory requirements, such as Good Manufacturing Practices (GMP) and International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH) guidelines, are driving pharmaceutical companies to prioritize quality and compliance in API manufacturing. This includes implementing robust quality management systems and investing in advanced manufacturing technologies.
• Digitalization and Industry 4.0: The adoption of digital technologies, automation, and data analytics is transforming the API manufacturing landscape in Europe. Industry 4.0 initiatives, such as smart manufacturing, predictive maintenance, and real-time monitoring, are enhancing operational efficiency, reducing downtime, and improving product quality.
• Focus on Personalized Medicine: Personalized medicine, driven by advances in genomics, biomarkers, and precision therapies, is gaining traction in Europe. APIs tailored to individual patient profiles offer targeted treatment options with improved efficacy and fewer side effects, leading to better patient outcomes.
• Rising Demand for Generic Drugs: The increasing prevalence of chronic diseases, aging populations, and healthcare cost containment measures are driving the demand for generic drugs in Europe. Generic APIs offer affordable alternatives to branded medications, promoting accessibility and affordability of healthcare services.
• Focus on Rare Diseases and Orphan Drugs: There is a growing focus on addressing unmet medical needs for rare diseases and orphan drugs in Europe. APIs for rare diseases represent a niche market opportunity, supported by regulatory incentives, orphan drug designations, and patient advocacy efforts.
• Globalization and Market Expansion: European API manufacturers are increasingly expanding their global footprint through strategic acquisitions, partnerships, and market collaborations. International market expansion allows companies to access new markets, diversify revenue streams, and mitigate risks associated with regional market fluctuations.

Type of Synthesis Insights

The synthetic segment commanded the market with the largest revenue share of 72% in 2023. This dominance is credited to the readily available nature of synthetic molecules. They offer consistency in quality, purity, and potency, as their manufacturing process can be standardized. This ensures uniformity across batches of active pharmaceutical ingredients. Additionally, synthetic molecules are cost-effective compared to natural ones, which often involve complex and time-consuming manufacturing processes. The growing demand for generic drugs further fuels the expansion of the API market, generating substantial revenue for chemical and synthetic API manufacturers.

Conversely, the Biotech segment is poised to exhibit the highest compound annual growth rate (CAGR) of 6.55% during the forecast period. This growth is fueled by significant investments in biotechnology and biopharmaceutical sectors, fostering innovation in new molecules for disease treatment. Pharmaceutical companies are channeling investments towards biologics to meet the increasing demand for biotech API-based products, thereby propelling market growth.

Type of Manufacture Insights

The captive API segment dominated the market with the largest revenue share of 53% in 2023. This dominance stems from substantial investments by market players in developing sophisticated manufacturing facilities. Captive APIs are favored by major players with ample resources, enabling them to customize APIs according to their needs and seamlessly integrate them into their products and manufacturing processes. Moreover, captive APIs offer greater control over quality and supply chain, allowing companies to integrate backward and reduce reliance on external suppliers.

In contrast, the merchant API segment is forecasted to demonstrate the fastest growth rate over the forecast period, with a CAGR of 7.72%. To minimize expenses and avoid heavy investments in equipment and infrastructure, pharmaceutical manufacturers are increasingly outsourcing active pharmaceutical ingredient production. This trend has spurred the growth of regional contract manufacturers like Seqens.

Type Insights

The generic API segment dominated the market, capturing the largest revenue share of 58% in 2023. It is anticipated to expand at the fastest CAGR of 7.4% over the forecast period, driven by the cost-effectiveness of generic APIs compared to branded ones. Moreover, the expiry of patents on branded molecules contributes to the growth of generic API-based drugs. Europe, particularly Spain and Italy, hosts over 350 small- and large-scale companies, fostering the growth of the generic API market in the region.

Meanwhile, the innovative API segment is expected to witness lucrative growth due to increasing demand for novel and more effective treatments, technological advancements, and rising investments in research and development by pharmaceutical companies.

Application Insights

The cardiology segment dominated the market in 2023 with a revenue share of 23%, driven by the high prevalence of cardiovascular diseases and increased product availability. The advanced healthcare infrastructure in Europe has facilitated the adoption of advanced cardiovascular treatments, boosting the demand for APIs and pharmaceuticals in this segment.

The oncology segment is projected to expand with the fastest CAGR of 7.45% over the forecast period, attributed to the rising prevalence of cancer in Europe. Increasing investments in R&D for novel medications tailored to specific biomarkers are driving segment growth.

Type of Drug Insights

The prescription segment held the largest share of 80% in 2023, reflecting Europe’s stringent regulations for pharmaceuticals, including APIs. Prescription drugs undergo rigorous regulation to ensure safety and efficacy, building trust among healthcare providers and patients. In the oncology segment, targeted therapies are witnessing increased prescriptions due to their higher efficacy.

Conversely, the over-the-counter (OTC) segment is expected to expand with the fastest CAGR of 5.87% over the forecast period. The growing trend of self-care solutions for health needs is driving the growth of OTC medications, although consumers are advised to consult healthcare providers for safety and effectiveness.

Recent Market News

• In 2020, AbbVie Inc. completed the acquisition of Allergan, a leading global pharmaceutical company renowned for its focus on neuroscience, urology, and other medical fields. This strategic move significantly expanded AbbVie’s therapeutic portfolio and bolstered its financial standing, thereby accelerating its research and development endeavors.
• Furthermore, in 2019, AbbVie Inc. forged a partnership with Scripps Research to expedite the discovery of new drugs targeting a diverse range of diseases, including oncology and immunology, among others. Under the terms of this collaboration, Scripps Research undertook pre-clinical research activities aimed at the development of innovative therapies. This collaboration proved instrumental in the creation of novel medicines aimed at addressing unmet medical needs, consequently driving an increase in the company’s revenue streams.

Impact of COVID-19 on Europe’s API Market

The COVID-19 pandemic has had a profound impact on the global pharmaceutical industry, including Europe’s API market. Supply chain disruptions, production delays, and increased demand for certain medications have reshaped the dynamics of the API sector. Pharmaceutical companies have had to adapt swiftly to mitigate the impact of the pandemic while ensuring the continued supply of essential medications to patients.

Europe Active Pharmaceutical Ingredients (API) Market Top Companies

• Cipla, Inc.
• Merck & Co., Inc.
• Boehringer Ingelheim International GmbH
• Sun Pharmaceutical Industries Ltd.
• AbbVie, Inc.
• Bristol-Myers Squibb Company
• Teva Pharmaceutical Industries Ltd.
• Albemarle Corporation
• Aurobindo Pharma
• Viatris Inc.

Europe Active Pharmaceutical Ingredients (API) Market Segmentations:

By Type of Synthesis

• Biotech
  
  • Biotech APIs Market, By Type
    • Generic API
    • Innovative API
  • Biotech APIs Market, By Product
    • Monoclonal Antibodies
    • Hormones
    • Cytokines
    • Recombinant Proteins
    • Therapeutic Enzymes
    • Vaccines
    • Blood Factors
• Synthetic
  
  • Synthetic APIs Market, By Type
    • Generic API
    • Innovative API

By Type of Manufacturer

• Captive APIs
• Merchant APIs
  • Merchant APIs Market, By Type
    • Generic API
    • Innovative API
  • Merchant APIs Market, By Type of Synthesis
    • Biotech
    • Synthetic

By Type

• Generic API
• Innovative API

By Type of Drug

• Prescription Drugs
• Over-the-counter (OTC) Drugs

By Application

• Cardiovascular Diseases
• Oncology
• CNS and Neurology
• Orthopedic
• Endocrinology
• Pulmonology
• Gastroenterology
• Nephrology
• Ophthalmology
• Others

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