Matej Mikulic
Research expert covering health, pharma & medtech
APIs and excipients - Statistics & Facts
The Food and Drug Administration reported recently that approximately 72 percent of essential active pharmaceutical ingredients (APIs) used in the U.S. market are produced outside the country. This fact highlights the global nature of the pharmaceutical supply chain, underscoring the critical role that both APIs and excipients play in drug formulation and delivery. As the pharmaceutical landscape evolves, understanding these two industries is essential for grasping the complexities of drug development.
The crucial role of active pharmaceutical ingredients
Active pharmaceutical ingredients are the key components in medications responsible for the actual therapeutic effect. The global API market is substantial, currently valued at around 250 billion U.S. dollars. Notably, about 22 percent of API production is concentrated in the hands of the top five companies. A significant portion of API production occurs in Asia, with China and India leading the charge; together, they account for 44 and 20 percent of global API production volume, respectively. This geographic concentration raises concerns regarding supply chains, as both the U.S. and Europe heavily depend on these two countries for their pharmaceutical needs. Western governments confirm the vulnerability of this reliance, particularly during events like the COVID-19 pandemic, when disruptions underscored the risks of outsourcing critical components of drug manufacturing. The current fragile global geopolitical situation and partly interrupted transportation routes just underline these concerns.The silent heroes in the background
Pharmaceutical excipients, on the other hand, are inactive ingredients in a medicine. Their role is to serve as carriers, or components of carriers, for the active ingredients in medications. While they may not contribute to the therapeutic effect, excipients play a crucial role in the drug formulation process, affecting stability, release rates, and overall efficacy. The global excipients market is valued at around eight billion U.S. dollars, with North America holding almost 40 percent. As the pharmaceutical industry advances, particularly with the rise of biotech-derived drugs and vaccines, the importance of excipients is increasing. These substances are becoming essential in ensuring the successful delivery and performance of complex biologics, making them indispensable in modern pharmacotherapy.Navigating the future of pharmaceuticals
As the pharmaceutical landscape evolves, the API and excipients sectors will increasingly influence the future of healthcare. Addressing supply chain vulnerabilities is essential, prompting a shift toward regional manufacturing and diversified sourcing strategies. At the same time, the excipients market is set to grow along with the demand for advanced therapeutics. For stakeholders, recognizing the interdependence of these industries will be key to ensuring a stable supply of safe and effective medications in a rapidly changing world.
