The leading players in the global high potency active pharmaceutical ingredient market are Sigma-Aldrich Corporation, Cambrex Corporation, Dr. Reddy’s Laboratories Ltd., Novasep, Lonza Group, Novartis AG, Pfizer, Inc., and WuXi AppTec, states Transparency Market Research (TMR) in a new report. The individual revenue shares of these players range between 3% and 4% of the overall market, which has made the competitive landscape exceptionally fragmented, says TMR.
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“Companies operating in the global HPAPI market must focus on cost containment to maintain their profit margins,” recommends the lead author of this research report. To reach out to the mass markets, the time is now ripe to focus on bridging the gap between technical expertise and outsourcing, the author adds. To gain the first-mover advantage and to remain a significant occupant in the market, players are increasingly building strategic partnerships.
Outsourcing Turns Focus on Drug Development and Commercialization
Increasing outsourcing of manufacturing activities by the HPAPI companies have drastically brought down the cost of drugs. It has also translated into the expansion of geographical spread of the market, thereby pushing HPAPI revenues upward. This change in strategy and supportive regulatory framework to safeguard patent infringement has also allowed pharmaceutical companies to focus on commercialization of drugs and drug development, thus allowing the companies to strengthen their pipelines. The noteworthy reduction in financial burden is expected to be an impactful market driver.
Development of drugs that are aimed at specific results has also substantiated the demand for HPAPI drugs. Furthermore, the biggest advantage of minimal or no side effects of these drugs is making them a preferred therapy option in the healthcare sector. A key market driver in the global HPAPI market is the patent expiry of patented drugs, which is paving the way for generic drug producers. This trend is expected to make the market exceptionally competitive and thus resulting in a sharp decline of prices.
However, despite the impending patent expirations of high revenue generating blockbuster drugs, the market for branded HPAPIs will remain larger than its non-branded counterpart thanks to the high cost of branded drugs.
Lack of Skilled Labor Prevents Market from Reaching Larger Consumer Base
The capital intensive nature of high potency API manufacturing activities has been the major barrier for the market. Furthermore, the need to hire exceptionally skilled labor for drug development and production is also acting as a restraint for the overall market. Moreover, the lack of universality in establishing norms regarding occupational, health, and environmental safety while researching and manufacturing high potency APIs is also threatening the growth of this market.
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Asia Pacific to be the Fastest-growing Segment as Contract Manufacturing Picks Up
According to TMR, the global high potency active pharmaceutical ingredient (HPAPI) market will represent an opportunity worth US$25.11 bn by 2023 as compared to US$2.64 bn in 2014. The market is expected to exhibit a CAGR of 7.8% between 2015 and 2023. The HPAPI market will be driven by the oncology drugs segment, which is projected rise at a CAGR of 8.3% over the forecast period as contract manufacturing gains importance. The report states that Asia Pacific will be the fastest-growing geographical segment at a robust CAGR of 10.1% from 2015 and 2023.
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