Expanding Opportunities for Specialty Excipients

China creates a potential outlet for specialty excipients as its pharmaceutical market grows.
Apr 02, 2007
Volume 31, Issue 4

The specialty excipient market is a tale of two markets. Growth prospects in the established markets in the United States and Western Europe are moderate, but strong potential is projected for emerging markets such as China as that country's pharmaceutical market and supplier base grows. On a product-development basis, excipient manufacturers are responding to demand by pharmaceutical companies for improved performance and multifunctionality.

Market outlook

The market for specialty excipients used in oral solid-dosage form (OSDF) pharmaceuticals in the United States, Western Europe, and China is nearly $800 million on a value basis and 225,000 metric tons on a volume basis, based on 2005 estimates, according to Kline & Company, Inc. (Little Falls, NJ) (1). Kline classifies specialty excipients as binders and fillers, disintegrants, and lubricants.

Figure 1
On a volume basis, consumption of specialty excipients in the United States and Western Europe is projected to increase at an average annual rate of 2.3% and 2.6%, respectively, through 2010. In China, annual average growth is estimated at roughly 8% (see Figure 1) (1).

"If we look at this business on a global basis, future demands on excipient technology will continue to be driven by drug industry developments such as new production methods, outsourcing, globalization, and reduced timelines to launch new products," said Eric Vogelsbeg, senior vice-president and head of Kline and Company's materials consulting practice, in commenting on its recent study. "At the same time, you have growing demand for excipients in emerging markets and imports of low-cost generic excipients into mature markets. All of these forces need to be considered to formulate an effective strategy for the global market."

In the established markets in the United States and Western Europe, drug companies are turning to excipient suppliers for innovation and technology developments. Driven by advancements in drug delivery and strategies to improve manufacturing economics, excipient suppliers increasingly are seeking multifunctionality and enhanced performance for their products, says Kline and Company (1).

In China, however, the specialty excipients market for OSDF pharmaceuticals is still evolving based on the country's production methods for OSDFpharmaceuticals, a developing position for GMP-certified excipients, and the role of traditional Chinese medicines in the country's pharmaceutical market.

"The current dominance of wet-granulation production techniques in China is a particular hindrance to multinational firms whose product portfolios are more suited to direct compression techniques," said Gillian Morris, industry manager at Kline and Company, in commenting on the study.

Figure 2
Wet granulation accounts for more than 90% of tablet production in China. In contrast, in the United States, wet-granulation is the least-preferred production technology. Instead, direct compression is the preferred production method. Chinese pharmaceutical makers have been slow to adopt the direct- compression method because of an abundance of inexpensive labor, notes the Kline analysis (1).

Figure 3
China's preference for wet granulation drives its specialty excipient product mix toward locally produced starches and other products. Production technology, the nature of the pharmaceutical products, and manufacturing economics are drivers in the various product mixes in the US, European, and Chinese markets for specialty excipients (see Figure 2 and 3) (1).

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