Europe Active Pharmaceutical Ingredients (API) Market (By Type of Synthesis; By Type of Manufacturer; By Type; By Application; By Type of Drug) - Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2024-2033

The Europe active pharmaceutical ingredients (API) market was estimated at USD 45.43 billion in 2023 and it is expected to surpass around USD 79.69 billion by 2033, poised to grow at a CAGR of 5.78% from 2024 to 2033.

Key Pointers

• The synthetic segment dominated the market with the largest revenue share of 77% in 2023. 
• Biotech is expected to expand with the highest CAGR of 6.55% during the forecast period. 
• The captive API segment dominated the market with the largest revenue share of 53% in 2023. 
• The merchant API segment is anticipated to demonstrate the fastest growth rate over the forecast period, with a CAGR of 7.72%. 
• The generic API segment dominated the market, accounting for the largest revenue share of 58% in 2023. 
• The cardiology segment dominated the market in 2023 with a revenue share of 23% owing to the high prevalence of cardiovascular diseases and the increase in product availability. 
• The oncology segment is anticipated to expand with the fastest CAGR of 7.45% over the forecast period owing to the rising prevalence of cancer in Europe. 
• The prescription segment held the largest share of 80% in 2023. 
• The OTC segment is expected to expand with the fastest CAGR of 5.87% from 2024 to 2033.

Europe Active Pharmaceutical Ingredients (API) Market Overview

The European market for active pharmaceutical ingredients (API) holds significant importance within the global pharmaceutical industry. With a rich history of pharmaceutical innovation and stringent regulatory standards, Europe remains a key hub for API manufacturing and distribution. This overview delves into the dynamics, trends, and key factors shaping the API market landscape across Europe.

Europe Active Pharmaceutical Ingredients (API) Market Growth Factors

The growth of the active pharmaceutical ingredients (API) market in Europe is propelled by an increasing demand for generic drugs, fueled by the expiration of patents on branded medications. This creates opportunities for pharmaceutical companies to produce and distribute affordable generic versions of popular drugs, driving market expansion. Additionally, Europe's aging population and rising prevalence of chronic diseases contribute to the growing need for pharmaceuticals, driving demand for APIs. Moreover, the region's robust infrastructure, skilled workforce, and adherence to stringent regulatory standards enhance its attractiveness for API manufacturing and distribution.

Europe Active Pharmaceutical Ingredients (API) Market Trends:

• Emphasis on Biosimilars and Biotechnology-Derived APIs: Europe is witnessing a growing focus on the development and adoption of biosimilars and APIs derived from biotechnology. With expiring patents on biologic drugs, there is a surge in the production of biosimilars, offering cost-effective alternatives to expensive biologics. This trend is driven by regulatory support and the potential for significant cost savings in healthcare.
• Adoption of Continuous Manufacturing Processes: The European pharmaceutical industry is increasingly embracing continuous manufacturing processes for API production. Unlike traditional batch manufacturing, continuous processes offer greater efficiency, flexibility, and quality control. This trend is driven by the need for enhanced production scalability, reduced time-to-market, and improved resource utilization.
• Investments in Research and Development: Europe remains a hub for pharmaceutical innovation, with substantial investments in research and development (R&D) aimed at addressing unmet medical needs. Companies are focusing on the discovery and development of novel APIs targeting various therapeutic areas, including oncology, neurology, and rare diseases. This trend underscores Europe's commitment to advancing healthcare solutions and maintaining its competitive edge in the global pharmaceutical market.
• Regulatory Developments: Regulatory frameworks play a crucial role in shaping the API market in Europe. Recent developments, such as the implementation of the EU's Falsified Medicines Directive (FMD) and the introduction of new guidelines for API manufacturing and quality control, are influencing industry practices and standards. Compliance with these regulations is essential for companies operating in the European market, driving investments in quality assurance and regulatory affairs.

Type of Synthesis Insights

The synthetic segment dominated the market with the largest revenue share of 72% in 2023. Compared to natural molecules, the segment's dominance is attributed to its ready availability. Synthetic molecules offer consistency in terms of quality, purity, and potency. The manufacturing process of synthetic molecules can be standardized, which ensures that every batch of active pharmaceutical ingredients produced is identical in composition and quality. Furthermore, they are cost-effective. This is because the manufacturing process for natural molecules can be complex and time-consuming, which makes them more expensive to produce. In addition, the rising demand for generic drugs further boosts the API market growth. APIs for generic drugs generate high revenue for chemical and synthetic API manufacturing companies.

On the other hand, Biotech is expected to expand with the highest CAGR of 6.55% during the forecast period. The growth of the biotech API segment can be attributed to high investments in the biotechnology and biopharmaceutical sectors. This allows the innovation of new molecules that aid in the treatment of diseases such as cancer. Pharma companies are aiming to invest in biologics and scale up production capacities to meet the rising demand for biotech API-based products, which, in turn, is expected to drive the market.

Type of Manufacture Insights

The captive API segment dominated the market with the largest revenue share of 53% in 2023. The dominance is attributed due to high investment by market players to develop high-end manufacturing facilities. Captive APIs are often used by the major and bigger players in the market that have significant resources to invest in their infrastructure and technology. These organizations can create highly customized APIs that are tailored to their specific needs and can integrate them seamlessly with their products, manufacturing systems, and processes. Furthermore, captive APIs offer greater control over the quality and supply chain of products allowing the companies with their own API manufacturing to integrate backward and reduce reliance on suppliers.

The merchant API segment is anticipated to demonstrate the fastest growth rate over the forecast period, with a CAGR of 7.72%. Captive production of APIs is expensive; pharmaceutical manufacturing companies have initiated outsourcing of active pharmaceutical ingredients production to minimize expenses and eliminate the need for investing in expensive equipment and sophisticated infrastructure. The outsourcing trend is a major factor influencing the growth of regional contract manufacturers, such as Seqens.

Type Insights

The generic API segment dominated the market, accounting for the largest revenue share of 58% in 2023. The market is anticipated to expand at the fastest CAGR of 7.4% over the forecast period, attributable to the cost-effectiveness of generic APIs when compared to branded APIs, and thus aids in the reduction of cost for developing and manufacturing pharmaceutical products. Moreover, the patent expiry of branded molecules is a key factor that can be attributed to the lucrative growth of generic API-based drugs. As per European Fine Chemicals Group, Europe's major generic API manufacturing countries are Spain and Italy, with over 350 small- and large-scale companies in the region. These factors has helped to drive the growth of the generic API market in the region.

The innovative API segment is projected to show lucrative growth over the forecast period. These molecules are developed through a lengthy process that involves extensive research, testing, and clinical trials to determine their safety and effectiveness. Factors such as increasing demand for new and more effective treatments, advancements in technology and research, and growing investments in research and development by pharmaceutical companies drive the growth of innovative APIs.

Application Insights

The cardiology segment dominated the market in 2023 with a revenue share of 23% owing to the high prevalence of cardiovascular diseases and the increase in product availability. The prevalence of cardiovascular disorders is increasing due to several factors, such as lifestyle changes, obesity, and excessive alcohol use. Thus, early detection and effective treatment are crucial to reduce mortality. Europe has a highly advanced healthcare infrastructure, with well-equipped hospitals and clinics. This has led to increased adoption of advanced cardiovascular disease treatments, which has driven the demand for APIs and pharmaceuticals used in these treatments.

The oncology segment is anticipated to expand with the fastest CAGR of 7.45% over the forecast period owing to the rising prevalence of cancer in Europe. According to the ESMO report, 1.2 million people worldwide are projected to die from cancer in 2023. Several companies have been investing heavily in R&D to create medications that are tailored to novel biomarkers. The presence of various APIs in the marketplace for different types of cancer is expected to drive the segment growth further. Some oncology active pharmaceutical ingredients are Imatinib by Novartis AG and Trastuzumab, Bevacizumab, & Rituximab by F. Hoffmann-La Roche Ltd.

Type of Drug Insights

The prescription segment held the largest share of 80% in 2023. The dominance of this segment can be attributed to Europe’s stringent regulations for pharmaceuticals, including APIs. Prescription drugs require higher regulation and oversight levels than over-the-counter (OTC) drugs. These regulations ensure that the drugs are safe and effective, which helps to build trust among healthcare providers and patients.

Moreover, prescription drugs dominate the market in the oncology segment. Cancer is primarily treated using chemotherapy, immunotherapy, targeted therapy, and hormonal therapy. The number of prescriptions generated for targeted therapies is increasing rapidly, owing to the higher efficacy of novel targeted therapies. Major players are launching novel targeted therapies. For instance, in March 2021, Novartis announced the approval of ofatumumab in Europe, a unique product used to treat multiple sclerosis and can be self-administered.

The OTC segment is expected to expand with the fastest CAGR of 5.87% over the forecast period. The OTC segment is expected to continue growing in the coming years as more consumers seek self-care solutions for their health needs. However, consumers need to consult their healthcare provider before taking any OTC medication to ensure that it is safe and effective for their specific health conditions.

Europe Active Pharmaceutical Ingredients (API) Market Key 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