A Shifting Landscape for the Global API Market - Pharmaceutical Technology

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A Shifting Landscape for the Global API Market
API demand and supply reflect broader pharma trends.


Pharmaceutical Technology
pp. s16-s20

Captive versus merchant markets. During 2008-2012, the global captive API market grew at a slightly higher rate comparated to the global merchant market and is larger on an absolute basis. In 2008, the global captive API market was valued at $55 billion and rose to $69 billion in 2012, representing average annual growth of 5.8%, according to the CPA analysis. The global merchant API market was valued at $36 billion in 2008 and increased to $44 billion in 2012 (1).

Generic versus branded, innovator APIs. Within the global merchant API market, the generic API market is outpacing the branded, innovator API market. The global generic API merchant market was valued at $17 billion in 2008 and rose to $22.5 billion in 2012, representing average annual growth of 7.3%. In 2012, the global branded, innovator API merchant market was valued at $21.5 billion, slightly less than the generic market. Annual average growth in the global branded, innovator API merchant market between 2008 and 2012 was 3.1%, less than half of growth in the generic API merchant market.

The strength of the generic API merchant market is expected to continue. Overall, the generic API merchant is expected to increase at an average annual rate of 7.7% from $22.5 billion in 2012 to $30.6 billion in 2016. The market in Asia Pacific is projected to increase at 10.8% during the next four years, making it the fastest growing region in the generic API merchant market. By 2016, China is expected to account for 27.7% of the global generic API merchant market, making it the largest market and surpassing the US, which will be the second largest global market with a 18.2% share. India will remain as the third largest merchant market for generic APIs with a projected 7.2% by 2016, according to the CPA report (1). Ten emerging markets are projected to experience double-digit growth of 10% to 14% in the generic API market. These countries are Brazil, China, Egypt, India, Jordan, Pakistan, South Africa, Thailand, Turkey, and Vietnam (1).

Supply fundamentals
Western Europe. Western Europe ranks second behind Asia Pacific in the supply of generic APIs on a global basis, but its market share declined from 16.7% in 2008 to 14.2% in 2012. Italy remains the largest producer of generic APIs in Western Europe, accounting for 58.3% of the region’s total, followed by Spain at 21%. Italy is also the largest supplier of generic APIs to the US market. Italian API producers accounted for 31.2% of the supply to the US generic API market in 2012, and their growth in supplying the US increased at an annual average growth of 5.2% between 2008 and 2012. India is the second largest supplier of generic APIs to the US market with a 24.4% share, according to the CPA report. India is also increasing its supply to Western Europe, accounting for 19.2% of the supply to the region (1).

Asia Pacific. In Asia Pacific, China is the largest generic API producer, with its domestic market representing its strength. Between 2008 and 2012, overall API production in China increased at an average annual rate of 7% from $6.43 billion in 2008 to $8.44 billion in 2012. During this period, sales to China’s domestic increased at an average annual rate of 11% while export growth increased only 5.8%. Sales to emerging markets represented the largest target for China’s API export sales, accounting for 63.1% of production. China’s export sales to developed markets (North America, Western Europe, and Japan) accounted for 36.9% of overall export sales and 24.7% of total API production, according to the CPA report (1). Overall, China ranks as the largest producer of generic APIs in the world and the largest exporter of APIs, followed by India.

But unlike China, whose domestic market is the largest target for its API production, India relies heavily on export sales. India’s API production was valued at $4.70 billion in 2012, up from $2.27 billion in 2008. India’s supply to the US market increased at an average annual rate of 44% between 2008 and 2012, increasing from $255 million in 2008 to $1.12 billion in 2012 (1).

Reference
1. Chemical Pharmaceutical Generic Association (CPA), The World API Market (Milan, March 2013), www.cpa-italy.org/en/indexen.php, accessed July 15, 2013.


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