Global Pharmaceutical Intermediates Industry - Key Growth Drivers and Recent Developments
The global pharmaceutical halfway industry has been witnessing steady growth over the past few years propelled by a rising geriatric population and increasing incidence of chronic diseases worldwide. Pharmaceutical halfway play a critical role in the drug development and manufacturing process as they are chemical compounds that are used to synthetically manufacture active pharmaceutical ingredients (APIs).
Rising Demand for Generic Drugs
The patent expiration of blockbuster drugs combined with increasing healthcare costs have prompted many countries and consumers to shift towards cheaper generic alternatives. Since pharmaceutical halfway account for a major portion of the total cost involved in generic drug manufacturing, their production has gained significant momentum globally. Moreover, with patents of several major drugs set to expire in the coming years, the demand for pharmaceutical halfway is expected to grow substantially to support generic drug manufacturing.
Increasing R&D Spending on Drug Discovery
A large portion of these funds is directed towards drug discovery and development activities which involve extensive screening and testing of various chemical compounds. This has amplified the need for a wide range of Global Pharmaceutical Intermediates that can act as starting materials or building blocks in synthesizing APIs. Additionally, the development of novel drug delivery systems and cell and gene therapies has also stimulated research requiring customized intermediates.
Rising Outsourcing of Drug Manufacturing
Owing to capacity constraints and high investment needs, many big pharmaceutical players are increasingly outsourcing drug manufacturing activities such as bulk production of APIs/intermediates to contract development and manufacturing organizations (CDMOs). These CDMOs depend entirely on external suppliers for procuring high-quality pharmaceutical halfway. The outsourcing trend has not only augmented demand from CDMOs but has also encouraged the establishment of dedicated intermediate manufacturing facilities worldwide. A growing number of companies are entering the market as pure-play contract manufacturers of pharmaceutical halfway to serve the burgeoning outsourcing industry.
Strategic Efforts to Strengthen Domestic Supply Chains
The COVID-19 pandemic brought to light vulnerabilities in over-reliant global API/intermediate supply chains. It caused severe shortages of critical drugs due to shutdowns in China and India, which together account for over 60% of global API production. Several countries like the US, EU member states, and India responded to the crisis by coming up with production-linked incentive (PLI) schemes and policies aimed at promoting domestic manufacturing of KSMs/intermediates. These initiatives are aimed at reducing import dependence, ensuring uninterrupted supplies, and strengthening national security of supply. Despite higher initial costs compared to imports, local sourcing is expected to pick up momentum in the long run supported by government subsidies and advantages of proximity.
Growing Adoption of Green Manufacturing Technologies
With rising environmental awareness and stringent regulatory norms, "green" manufacturing practices are gaining adherence within the pharmaceutical industry. Several companies have shifted to greener and more sustainable production techniques involving fewer toxic solvents, lower energy consumption, and natural/renewable starting materials when possible. These include enzymatic, selective, asymmetric, and multi-step synthesis methodologies. The adoption of such eco-friendly technologies requires specialized technologies and expertise to develop advanced pharmaceutical intermediates. This presents lucrative opportunities for developers of green chemistries catering to the developmental needs of drug makers.
Emerging Markets - Hotspots for Future Growth
Propelled by expanding healthcare budgets, growing generics markets, and heavy investments into pharmaceutical manufacturing capacities, many emerging countries have evolved as vital hubs for pharmaceutical halfway production over the past decade. Countries like India, China, Brazil, Russia, Turkey, and Mexico now represent leading global suppliers. Their advantages include low-cost skilled labor, lax environmental norms, supportive governments promoting the life sciences sector, and close proximity to key APIs markets. However, quality issues remain a concern. With improvements in quality systems, these developing markets are likely to make bigger strides and capture a significant share of global intermediate trade going forward.
The global pharmaceutical intermediates industry has been witnessing an upward trajectory driven by increasing chronic disease burden, patent expiries, outsourcing trends, efforts to strengthen domestic supply security, adoption of greener technologies, and opportunities emerging across developing pharmaceutical hubs. Barring unforeseen disruptions, market players can expect healthy growth prospects over the long term supported by the persistent need for cost-effective drug manufacturing.
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Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc. (https://www.linkedin.com/in/money-singh-590844163)
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