API also is known as an active pharmaceutical ingredient is a combination of substances that is used for the production of the drug. It is after being used in the drug production that these substances become an active ingredient in the drug. The growing demand for the generic drug is expected to play a major part in fueling the global API market. In addition to this, it is the patent expiration of innovative drug and making generic drugs readily available in the market that has further boosted the overall market demand.
Generic drug demand has also seen tremendous hike due to their lower and affordable manufacturing cost together with the production of quality medicines. Among the prescription drugs being distributed in the US, in 2013, generic drugs accounted for more than 70%, owing to their affordability (low price) to the healthcare system, payers, and to patients.
Global API (Active Pharmaceutical Ingredients) Market is driven by an increase in demand for rapid action, effective, and efficient drugs together with rising preferences for targeted therapy approach. In addition to this, the innovative drug manufacturing facilities have also contributed to the growth of the Global API (Active Pharmaceutical Ingredients) Market. However, the stringent regulatory frameworks for API manufacturing across the regions have acted as a major restraint for the growth of the Global API (Active Pharmaceutical Ingredients) Market.
Global API (Active Pharmaceutical Ingredients) Market is segmented into API type, drug type, therapy type, and geography. Among the drug type, innovative drug segment accounted for the largest share of the market in 2017, due to the high demand for innovative drugs for the treatment of terminal diseases such as Cancer. In addition to this, FDA approval for new molecules is also contributing to overall segment growth. Generic drug segment is expected to grow with the highest CAGR because of neutralization in the high cost of health care, along with governing bodies forcing for consumption of generic drugs over the branded ones.
On the basis of region, Global API (Active Pharmaceutical Ingredients) Market is divided into North America, Europe, Asia Pacific, Latin America and Middle East & Africa. In the year 2017, North America accounted for the largest share of the API market owing to increased consumption of API to maintain overall health.
Also, the presence of major manufacturers and their well-established network in the region have further helped in the overall growth. Asia Pacific region is expected to see massive growth in Global API (Active Pharmaceutical Ingredients) Market during the forecast period due to the low production and labour cost, and high availability of raw material required for the production of APIs. It is expected that Asia Pacific region will outpace the mature North America region owing to rise in healthcare spending, regulatory support, favourable tax policies and government encouragement for API manufacturing.
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