June 18, 2024

Active Pharmaceutical Ingredients: Enabling Healthcare Innovation and Access

The active pharmaceutical ingredient or API is the part of any medicine or drug that produces the intended effects. APIs are essential components in modern healthcare and play a key role in enabling innovation as well as access to affordable medicines. In this article, we explore the role of APIs, recent trends, challenges and opportunities in this important industry.

What are APIs?
An API refers to any substance or compound that is intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease or to affect the structure and function of the body. APIs are the main or active components of pharmaceutical drugs that make the drugs biologically active against specific target sites in the body to diagnose, cure, treat, or prevent disease. Other inactive substances called excipients are also combined with APIs in drug formulation to provide proper dosing and drug delivery.

Major Types of APIs
APIs can be small molecules, biologics or biosimilars. Small molecule APIs are chemically synthesized compounds processed through organic synthesis. They account for the majority of currently available drugs. Biologic APIs are produced from living cells through biotechnology processes like fermentation. Biosimilars are highly similar versions of approved biologic drugs. The global API market is dominated by small molecule APIs presently, but biologics and biosimilars segments are growing rapidly.

API Manufacturing Processes
API production involves multiple processing steps like manufacturing, purification, isolation and formulation. Small molecule APIs are synthesized through organic synthesis while large molecule biologic APIs undergo natural cellular/fermentation processes. Common production methods for small molecule APIs include chemical synthesis, extraction from natural sources, semi-synthesis using precursors from natural sources or microbial fermentation. Ensuring product purity, quality and stability is crucial in API manufacturing as even minor impurities can impact drug efficacy and safety.

API industry trends
The global API market was estimated at over $200 billion in 2020 and is projected to grow steadily at around 5-6% annually through 2028. The major drivers include rising demand for generic and biosimilar drugs, patent expirations of blockbuster drugs, increasing use of APIs in diagnostic tests, and growing need for active pharmaceutical ingredient production outsourcing by big pharma companies.

Changing Regulations and Compliance
API manufacturers must comply with stringent regulations and guidelines set by regulatory authorities like the US FDA, EMA, WHO and other national drug regulators. Regulations govern all aspects of API manufacturing from facility and process validation to quality control testing and change control management. Recent key regulatory trends affecting the API industry include implementation of ICH Q7 Good Manufacturing Practices, product quality control harmonization initiatives like the International Consortium for Innovation and Quality in Pharmaceutical Development and increasing focus on environmental and energy efficiency in manufacturing facilities. Ensuring compliance with changing regulations is critical but also increases costs and complexities for API producers.

Outsourcing Trends
Due to rising costs of in-house production, complex regulatory requirements and need to reduce product development timelines, many pharmaceutical companies are increasingly outsourcing non-core or commoditized API manufacturing activities to contract development and manufacturing organizations (CDMOs). An estimated 60-70% of global API production is handled by CDMOs presently. Major outsourcing regions attracting pharmaceutical API business include India, China, Eastern Europe and Latin America due to availability of large capacitated facilities, experienced workforce and relatively lower costs. However, regulatory compliance, intellectual property protection and stability of supply chains remain key challenges for outsourced API production.

Challenges and Opportunities
Some of the major challenges presently faced by the API industry include escalating costs of research, development and compliance, stringent environmental regulations, greater reliance on offshore outsourcing partners, lack of skilled workforce and disruptive market influences like China’s dominance. At the same time, emerging opportunities lie in increased biologics and biosimilars demand, utilization of advanced manufacturing technologies like continuous processing, sustained growth of generics and development of complex drug molecules. Adopting new strategies around process intensification, data driven quality management and collaborations could help API producers better navigate challenges and better capture opportunities in the future.

Ensuring access to high quality and affordable essential APIs will be critical to enable greater access to healthcare globally. With appropriate policy support and innovation, the API industry can play a pivotal role in meeting this objective and positively influencing public health outcomes worldwide. Manufacturers will need to continuously enhance capabilities in areas like complex API development, problem-solving skills, responsiveness and sustainability to stay competitive in the evolving API industry landscape.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it