Production of Azithromycin, Cefixime, Telmisartan, Diclofenac Sodium, Acecloflenac. Emerging Business Investment Opportunities in Active Pharma Ingredients (API) Industry.
The Active Pharmaceutical Ingredient (API) is the part of any drug that produces the intended effects. Some drugs, such as combination therapies, have multiple active ingredients to treat different symptoms or act in different ways.
Active pharmaceutical ingredient (API), is the term used to refer to the biologically active component of a drug product (e.g. tablet, capsule). Drug products are usually composed of several components. The aforementioned API is the primary ingredient. Other ingredients are commonly known as "excipients" and these substances are always required to be biologically safe, often making up a variable fraction of the drug product. The procedure for optimizing and compositing this mixture of components used in the drug is known as "formulation.
Related Project: - Active Pharma Ingredients • Azithromycin • Cefixime • Telmisartan • Diclofenac Sodium • Acecloflenac
Role of Government towards API
The coronavirus outbreak disrupting supply of active pharmaceutical ingredients (APIs) and medical devices from China to India, the government has come out with four schemes worth Rs 13,760 crore to encourage manufacturing of bulk drugs and medical devices in the country and their exports.
On March 21, the Union Cabinet under the chairmanship of Prime Minister Narendra Modi had approved an expenditure of Rs. 9,940 crore and Rs. 3,820 crore for APIs and medical devices, respectively.
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The Cabinet also approved a scheme on promotion of bulk drug parks for financing common infrastructure facilities in three bulk drug parks with financial implication of Rs. 3,000 crore for next five years. The government will give grants-in-aid to states with a maximum limit of Rs. 1,000 crore per bulk Drug Park. Parks will have common facilities such as solvent recovery plant, distillation plant, power and steam units, common effluent treatment plant etc.
The government further approved production linked incentive (PLI) scheme for promotion of domestic manufacturing of critical KSMs/drug intermediates and APIs in the country with financial implications of Rs. 6,940 crore for next eight years.
Financial incentive will be given to eligible manufacturers of identified 53 critical bulk drugs on their incremental sales over the base year (2019-20) for a period of 6 years.
Out of 53 identified bulk drugs, 26 are fermentation based bulk drugs and 27 are chemical synthesis based bulk drugs.
Rate of incentive will be 20 per cent (of incremental sales value) for fermentation based bulk drugs and 10 per cent for chemical synthesis based bulk drugs.
The PLI scheme will lead to expected incremental sales of Rs. 46,400 crore and significant additional employment generation over eight years.
The drug industry has welcomed the incentives offered by the government to promote API units in India.
Besides APIs, the Cabinet also approved the scheme for promotion of medical device parks in the country in partnership with the states. A maximum grant-in-aid of Rs. 100 crore per park will be provided to the states. It will have financial implications of Rs. 400 crore.
The PLI scheme for promoting domestic manufacturing of medical devices will have financial implications of Rs. 3,420 crore for next five years.
Medical device is a growing sector and its potential for growth is the highest among all sectors in the healthcare market. It is valued at Rs. 50,026 crore for 2018-19 and is expected to reach to Rs. 86,840 crore by 2021-22. India depends on imports up to an extent of 85 per cent of total domestic demand of medical devices.
Union Cabinet scheme on Promotion of Bulk Drug Parks
• The scheme on Promotion of Bulk Drug Parks for financing Common Infrastructure Facilities in 3 Bulk Drug Parks with financial implication of Rs. 3,000 crore for next five years.
• Production Linked Incentive (PLI) Scheme for promotion of domestic manufacturing of critical KSMs/DrugIntermediates and APIs in the country with financial implications of Rs6,940 crore for next eight years.
Details:
Promotion of Bulk Drug Parks
• Decision is to develop 3 mega Bulk Drug parks in India in partnership with States.
• Government of India will give Grants-in-Aid to States with a maximum limit of Rs. 1000 Crore per Bulk Drug Park.
• Parks will have common facilities such as solvent recovery plant, distillation plant, power & steam units, common effluent treatment plant etc.
• A sum of Rs. 3,000 crore has been approved for this scheme for next 5 years.
Production Linked Incentive Scheme
• Financial incentive will be given to eligible manufacturers of identified 53 critical bulk drugs on their incremental sales over the base year (2019-20) for a period of 6 years.
• Out of 53 identified bulk drugs, 26 are fermentation based bulk drugs and 27 are chemical synthesis based bulk drugs.
• Rate of incentive will be 20 % (of incremental sales value) for fermentation based bulk drugs and 10% for chemicalsynthesis based bulk drugs.
• A sum of Rs. 6,940 crore has been approved for next 8 years.
Market Outlook
The global active pharmaceutical ingredient market size is expected to reach a value of USD 286.6 billion by 2027, registering a CAGR of 6.7% over the forecast period. Factors, such as increasing preference for outsourcing APIs and growing prevalence of various target diseases such as cancer and Cardiovascular Diseases (CVDs) are expected to drive the market growth.
Active Pharmaceutical Ingredients are chemically and biologically active components of drugs with direct effect in cure, mitigation, treatment and prevention of diseases. The global API market has witnessed tremendous growth over the last few decades owing to the increased use of drugs and biologics in the treatment of diseases. The increasing adoption of quality standards in API manufacturing such as Good Manufacturing Practices (GMP), current GMP (cGMP), and the global adoption of International Conference on Harmonisation (ICH) guidelines, have helped improve the safety standards. On the other hand, the API industry is facing the challenges such as, shortening the development time, reducing the cost of development, improving the process design and meeting the quality standard without compromising on the profitability. The global API market is likely to be impacted by a large number of innovative drugs going off patent in the recent years. There is an impending need for technological innovations to maintain the profitability in high volume and a low value environment. The major factors driving the market growth are, rising incidences of oncology, cardiovascular, diabetes and lifestyle diseases, rising number of hospitals and diagnostic centers, rising geriatric population in developing countries, increasing healthcare expenditure, increasing disease awareness and education. However, a lack of skilled workforce and limited accessibility of drugs in the developing countries are likely to restrict the market growth.
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Active Pharmaceutical Ingredient Market Regional Analysis –
North America is expected to dominate the Active Pharmaceutical Ingredient market with the potential rate as presence of pharmaceutical companies for new drug discovery using advanced technology in this region. According to the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), the U.S. holds 45% global market share for pharmaceutical companies including new drug discovery using the Active Pharmaceutical Ingredient with spending has been increased from USD 461.7 billion in 2016 to USD 645-675 billion in 2021, while the European share of pharmaceutical drug development spending will grow from USD 151.8 billion to USD 170-200 billion from 2016 to 2021 year. Europe is the second-largest region for dominating the growth of Active Pharmaceutical Ingredient due to rise of infectious diseases like Corona virus, HIV, etc.
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The Asia Pacific is expected to emerge as the fastest-growing regional market due to rapidly increasing the prevalence of therapeutic and chronic diseases i.e., diabetes, cancer etc. with rising population in this region. According to WHO, around 65% of all cancer deaths occur in developing countries and the number of global cancer deaths is projected to increase by 45 percent from 2007 to 2030 with from 7.9 million to 11.5 million deaths influenced by rise in consumption of tobacco use, unhealthy diet, insufficient physical activity and the harmful use of alcohol in this region.
Focus on healthcare to drive the active pharmaceutical ingredients market
The spending on healthcare has grown at a rapid pace in recent years and it increased at a CAGR of 6.92% between the years 2003 and 2013. The healthcare spending growth was significantly higher than the population growth rate that grew at a CAGR of 1.22% for the same period. The per capita healthcare spending rose from just under US$ 600 in 2003 to above US$ 1000 in 2013, at an average CAGR of 5.62%. The focus on healthcare spending was observed to be a global phenomenon and this directly benefited the active pharmaceutical ingredients market.
Drivers and Key Restraints
The active pharmaceutical ingredients market gets a major boost from the growing prevalence of cardiovascular conditions, infectious diseases, and various other chronic disorders. Other than these, the rise in various genetic disorders has driven the use of biologicals and biosimilars, the world over. In many instances, biosimilars are the most preferred owing to them being low-cost. Biosimilars have the potential of creating a highly sustainable healthcare system which makes way for innovation, allowing more patients to receive the optimum care.
The growth of active pharmaceutical ingredients market is marked by the huge demand for drugs like analgesics, anti-infectives and diabetes, and pain management drugs. But with the rising trend of increasing research and development (R&D) activities, the demand is experiencing a shift towards the advancement of complex APIs that find use in novel formulations, thereby targeting niche therapeutic areas.
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At present, a huge number of drugs are in the pipeline for the development of treatments for autoimmune disorders, metabolic diseases, and cancer. On account of the hike in the number of cancer cases, numerous manufacturers are now proceeding towards developing highly potent APIs as well as specialty APIs, in a bid to meet with the accelerated demand for such products. These factors are expected to have a remarkable effect on the market growth in the subsequent years.
Key Players:-
Alpha Remedies Ltd.
Ankur Drugs & Pharma Ltd.
Aurobindo Pharma Ltd.
Cian Healthcare Ltd
Cipla Ltd.
Dr. Reddy'S Laboratories Ltd.
Farmson Pharmaceutical Gujarat Pvt. Ltd.
Glaxosmithkline Pharmaceuticals Ltd.
Indoco Remedies Ltd.
Pan Drugs Ltd.
Piramal Enterprises Ltd.
Sanofi India Ltd.
Sri Krishna Pharmaceuticals Ltd.
Teva Pharmaceutical & Chemical Inds. India Pvt. Ltd.
Triton Laboratories Ltd.
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