As per one of the recently held studies in 2024, the Europe Active Pharmaceutical Ingredients- API market size happened to be anticipated at $45.43 billion in 2023, and with an expected CAGR of 5.78% right from 2024 to 2033, it is expected to reach $79.69 billion in the forecast period.
Some of the key findings in the research were that:
- Captive API went on to emerge as a major segment in 2023, thereby capturing 53% of the overall market revenue.
- The merchant API segment is set to exhibit the fastest growth rate all across the forecast period- 2024 to 2033, with a CAGR of 7.72%.
- Generic APIs led the market in 2023 and comprised 58% of the overall revenue.
- The synthetic segment went on to hold the highest market share in 2023, with 77% of the total revenue.
It is worth noting that Europe happens to boast a strong pharma sector that is renowned for its quality, innovation, and also regulatory benchmarks. The region has several pharma companies, be they big or small, as well as specialized niche players.
APIs happen to play a critical role when it comes to driving the pharma sector and hence serve as the very base for the development as well as production of a range of medicine that’s diverse.
Fastest growth rate expectations with merchant API segment
The merchant API segment is anticipated to offer the fastest growth rate across the forecast period, with a CAGR of 7.72%. So as to reduce expenses and also avoid heavy investment when it comes to equipment and infrastructure, pharma manufacturers happen to be increasingly outsourcing API production. Due to this trend, there is a spurt in the regional contract manufacturers growth.
Surge of Captive API
The captive API segment went on to dominate the market due to its largest revenue share with 53% in 2023. This dominance is due to substantial investments by market players when it comes to developing sophisticated manufacturing setups. The fact remains that captive APIs happen to be favored by prominent players, helping them to personalize the APIs as per their needs and integrate seamlessly within products as well as manufacturing processes. Furthermore, captive APIs go on to offer better control over supply chains and quality, enabling companies to integrate backward and also decreasing dependence on external suppliers.
Synthetic Segment: The largest revenue share
This segment had a market share comprising the largest revenue share of 72% in 2023. This dominance is due to the readily available nature when it comes to synthetic molecules, which offer consistency when it comes to purity, quality, and potency as the manufacturing process can be standardized. All this goes on to ensure uniformity throughout all the batches of APIs. Moreover, synthetic molecules happen to be cost effective compared to the natural ones, which, by the way, happen to have time-consuming and intricate manufacturing processes. The rising demand when it comes to generic drugs has indeed throttled the expansion of the API segment, thereby generating a substantial amount of revenue for both, chemical and synthetic API manufacturers.
The dominance of generic APIs
The generic API segment went on to dominate the market, thereby capturing the largest revenue share of 58% in 2023. It is expected to expand at the fastest CAGR of 7.4% across the forecast period due to the cost-effectiveness of generic API-based drugs.
Europe, especially, Spain and Italy, happen to host more than 350 small and large-scale companies, pushing the growth of the generic API market within the region.
Also, the innovation API segment is anticipated to see profitable progress because of the rising demand for both novel and effective treatments, rising investments when it comes to R&D, and also tech advancements by pharma companies.
