May 18, 2024

Global Pharmaceutical Intermediates Market Expected to Grow Owing to Increasing Adoption of Contract Manufacturing

Pharmaceutical intermediates are chemical compounds or molecules produced during the process of developing an active pharmaceutical ingredient (API). They help streamline the API manufacturing process, reduce costs, and improve yields. Some key advantages of pharmaceutical intermediates include improved safety, quality control, and regulatory compliance. The growing need to develop high-potency APIs at competitive prices is driving the demand for contract manufacturing of pharmaceutical intermediates.

The Global Pharmaceutical Intermediates Market is estimated to be valued at US$ 43.67 Bn in 2024 and is expected to exhibit a CAGR of 8.1% over the forecast period 2024 to 2031.

Key Takeaways

Key players operating in the Global Pharmaceutical Intermediates are Evonik, Borregaard AS, Sudarshan Pharma, A.R. Life Science, Actylis, Saurav Chemicals Ltd., Lianhetech, Midas Pharma GmbH, Sanofi , BASF SE, Chiracon GmbH, Lonza, Chemcon Speciality Chemicals Limited., Modepro India Pvt. Ltd., Lifechem Pharma, Sarex, and LANXESS.

Key opportunities in the market include expanding contract manufacturing capabilities and capacity expansion through strategic partnerships. Various pharmaceutical companies are outsourcing manufacturing of intermediates to specialized contract manufacturers to reduce costs.

Technological advancements such as flow chemistry, intensified batch processing, and continuous manufacturing are helping improve reaction efficiencies and yields. They are also reducing manufacturing timelines. Continuous manufacturing of intermediates helps enhance process understanding and quality assurance.

Market drivers
Increasing demand for generic drugs due to patent expiries is a key driver for the Global Pharmaceutical Intermediates Market Size . India and China are expected to witness high growth owing to availability of skilled labor and cost-competitive manufacturing environments. Growing investments of pharmaceutical companies in contract manufacturing and expanding outsourcing activities will further fuel market growth over the forecast period.

Challenges in the Global Pharmaceutical Intermediates Market
The pharmaceutical intermediates market is facing numerous challenges currently. Regulatory compliance is a major headache for manufacturers as the regulatory landscape keeps evolving. Obtaining requisite approvals and permits is a lengthy and expensive process. Raw material price volatility is another key issue affecting profits and demand-supply dynamics. Sourcing high-quality raw materials at optimal costs remains challenging. Additionally, increasing cost pressures on pharma companies and pricing controls in certain countries make it difficult to pass on increased costs to customers. Intense competition further compresses margins. Technology obsolescence is another area of concern as newer, more efficient production technologies keep emerging. Existing plants need regular upgrades to improve yields and optimize processes.

SWOT Analysis

Strengths: Strong demand from the pharma industry for producing active pharmaceutical ingredients (APIs). Manufacturers have vertically integrated facilities and technical expertise.

Weaknesses: Regulatory hurdles and compliance issues add to production costs. Dependence on China and India for key starting materials.

Opportunities: Growth in generics market and contract manufacturing. Scope for achieving economies of scale through expanding capacities and backward integration.

Threats: Vulnerability to economic cycles and slowdowns. Rising trade barriers and geo-political tensions affecting global supply chains. Stringent environmental norms necessitate investments in pollution control technologies.

Geographical Regions
In terms of value, North America and Europe constitute the largest market for pharmaceutical intermediates currently, collectively accounting for over 50% share. This is attributed to well-developed pharmaceutical industries in countries like the US, Germany, France and UK. However, Asia Pacific region is growing at the fastest pace led by China and India – the major global suppliers of pharmaceutical intermediates and APIs. Their cost competitiveness and expertise in bulk drug production have made them top export hubs.

Fastest Growing Region

The Asia Pacific region holds maximum potential for pharmaceutical intermediates market and is projected to be the fastest growing regional market during the forecast period. This is owing to expanding pharmaceutical manufacturing activity, rising healthcare spending, and proactive government efforts to strengthen domestic drug production in countries like China, India and South Korea. Growing generics market, presence of regional branded formulations manufacturing bases, and attempts by international players to leverage the low-cost manufacturing environment are fueling demand growth in Asia Pacific.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it