Introduction of new drugs for rare indications, rising prevalence of chronic diseases, and growing ageing population have increased the consumption of pharmaceuticals, which has boosted the pharmaceutical expenditure, globally. According to OECD, Global spending on pharmaceuticals was US$ 1,120.6 Bn in 2015 and is expected to increase at a CAGR of 7.1% during 2016 – 2030. Various pharmaceutical and biotechnology companies are focusing on expanding their geographical footprint to increase pharmaceutical production capacity. For instance, in January 2019, Fujifilm announced plans to invest approximately US$ 90Mn to boost its overall production capacity by expanding its production facility at North Carolina. Growing pharmaceutical production and increasing pharmaceutical spending are expected to propel growth of the global sterile active pharmaceutical ingredients market. By value, China held the largest share in 2018 accounting for ~79% of the market. By form, aqueous segment captured the largest share in terms of in 2029 and is projected to show an upward trend through 2029.
Rapid Shift from in-house Sterile Active Pharmaceutical Ingredients Production to Outsourced Production
Pharmaceutical companies are rapidly shifting from in-house manufacturing to outsourcing of manufacturing operations. North America shows balance in in-house to outsourcing production of sterile active pharmaceutical ingredients. Approximately, 50% of the big pharmaceutical companies prefer in-house production of patented API and outsourcing of dosage form manufacturing. However, companies do not rely on sole producers but partner with various CMOs for manufacturing of finished dosage forms. With a prolific rise in outsourcing of sterile active pharmaceutical ingredients, CMOs are expanding fill and finish capacity for sterile products. As can be evidenced in diagram below, North America on back of aforementioned factors held a major chunk of market share in 2019, closely followed by South Asia which is also poised to exhibit a staggering growth of ~8% through 2029. South Asia’s prolific growth can be attributed to presence of key API manufacturers in countries such as India. Additionally, the region will exhibit high growth on back of increased manufacturing of generic drugs.
Acquisition and Partnership Key Strategies in Sterile Active Pharmaceutical Ingredients Market
Manufacturers are focusing on expansion of product lines in the sterile active pharmaceutical ingredients segment owing to growing demand for parenteral drugs, biologics, and ophthalmic solutions. Key market stakeholders are adopting acquisition and merger strategies for expansion of production capabilities. For instance, in September 2018, Aurobindo Pharma USA Inc. acquired commercial operations and three manufacturing facilities in the U.S from Sandoz Inc., USA. Also, manufactures are centering towards a strategic partnership with contract manufacturing organization and pharmaceutical companies to access advance manufacturing technologies for sterile products. In February 2017, Sanofi and Lonza entered a strategic partnership to operate large-scale mammalian cell culture facility for monoclonal antibody production in Visp, Switzerland.
Increasing Research & Development Investments in Pharmaceutical Industry
The healthcare industry is heavily dependent on developing new treatment options for the treatment of various chronic diseases such as cancer, HIV, arthritis, cardiovascular diseases, etc. Increasing healthcare R&D expenditure, further improves the chances of possibility of breakthrough treatments. As per the data from European Federation of Pharmaceutical Industries and Associations (EFPIA) and (Pharmaceutical Research and Manufacturers of America) PhRMA, annual pharmaceutical R&D expenditures expanded at 2.5% p.a. in Europe as compared to 3.3% p.a. in the U.S. during 2011-2016. Rapidly growing pharmaceutical expenditure is anticipated to result in new molecule discovery that favors the demand for sterile active pharmaceutical ingredients.