Small molecule API market to value $284.7 billion by 2032

A report from Market Research Biz has illustrated that the small molecule active pharmaceutical ingredient (API) market is expected value around $284.7 billion by 2032.

This is a rise from $162.8 billion in 2022. A compound annual growth rate (CAGR) growth of 5.9 percent during the forecast period from 2023 to 2032 is predicted.

The small molecule API market is influenced by several factors, including heightened R&D within the pharmaceutical sector, a growing prevalence of chronic illnesses and rising demand for generic medicines. Advancements in manufacturing technology, plus availability of cost-effective treatment options are also influencing the sector.

Challenges for growth of the small molecule API market

Intellectual property (IP)

IP can be a significant barrier to entry into the small molecule API market, the authors noted. Securing IP rights can be challenging due to competitors creating similar APIs or identify patent gaps. This can restrict a manufacturer’s capacity to make income.

Other molecule types

Small molecule API manufacturers are in fierce competition with medicines such as biologics, the report stated. For example, monoclonal antibodies are gaining prevalence in the pharmaceutical market. Complex compounds offer targeted, effective medicines and typically outperform small molecule APIs. The authors highlighted this can be an obstacle for players in the small molecule sector.

As global regulators have streamlined the approval process for generic drugs. Their low cost and availability has made them more accessible to patients and is therefore growing the generic drug market. According to the report, higher competition has therefore increased demand.

Opportunities within the small molecule API market

To help overcome these challenges, expansion into emerging markets is a key opportunity for the small molecule API market. Rising demand for affordable and accessible drugs in regions like Asia-Pacific, Latin America, and Africa can offer potential for manufacturers in this sector to become established in these markets and work on their drug development. This opportunity can lead to higher production and revenue, the research reported.

Disease areas

Development of APIs for niche sectors such as rare or uncommon diseases offers new markets and can give small molecule API companies “an edge”, stated the report. According to the authors, the rise in diseases such as diabetes, cardiovascular disease and cancer driving the high demand for pharmaceutical drugs.

Technology

Investing in advanced technology and infrastructure for develop high-potency APIs (HPAPIs) can offer a growth solution for players in the small molecule market, the authors suggested. One reason given was that HPAPI production frequently has better margins.

Advancements in manufacturing techniques and technologies has enabled large-scale production of high-quality APIs. These innovations have improved manufacturing efficiency and reduced costs. In turn, this has made pharmaceutical drugs more less expensive and more accessible to more patients.

In the market report, continuous manufacturing was described as an approach that could offer a dramatic growth opportunity for the small molecule API market. By integrating automation, real-time monitoring, and advanced analytics, drug development manufacturers may boost production and cut costs, leading to increased market competitiveness.

Other areas of growth potential for the small molecule API market include green chemistry for sustainable manufacturing, artificial intelligence (AI), and machine learning for efficient drug development, and new drug delivery technologies.

The research highlighted that major players within the small molecule API market include Lonza, Cambrex Corporation, Dr Reddy’s Laboratories Ltd, GSK plc, Merck KGaA, Novartis AG, Pfizer Inc., Teva Pharmaceutical Industries Ltd and Gilead Sciences Inc.

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