Despite boasting the globe’s third-largest pharmaceutical industry by volume and leading the production of generic drugs worldwide, India remains significantly reliant on China for sourcing raw materials, Key Starting Materials (KSMs), and Active Pharmaceutical Ingredients (APIs). With India producing approximately 60,000 generic brands across 60 therapeutic fields and over 500 distinct APIs, the statistics are impressive.
Nonetheless, roughly 70% of India’s API imports hail from China, a cost-effective alternative to local production. India was notably reliant on China for 58 APIs, with complete dependency on 45 of these APIs. Of these, half are generated through chemical synthesis, while the other half result from fermentation processes.
The Indian API industry has been navigating a tough terrain due to its heavy dependence on Chinese imports, which forms a substantial part of the overall import figure. This reliance has led to unpredictable API prices, with increases surpassing 100% in some instances.
A substantial dependency on a singular source poses notable risks, particularly in crisis situations. It’s critical for India to rejuvenate its local API sector, which has been drastically impacted by regulations like the stringent enforcement of pollution controls, the Consequences Monitoring Program 2013, and lower import fees.
Looking forward, Indian API enterprises are encouraged to pursue emerging business avenues as part of their strategic growth initiatives:
Future API Segments
Fermentation-Based Production
The pharmaceutical sector is well-versed in fermentation practices. Synthetic biology has facilitated both biologic and chemical API production for decades. Fermentation processes, which offer sustainability and novel structures, are especially appealing for small molecule production.
Key Advantages of Fermentation
While cell culture is often reserved for biologic production, like proteins and antibodies, it is usually more costly and intricate. In contrast, microbial fermentation is more straightforward and scalable.
Furthermore, fermentation transforms inexpensive and abundant resources (such as sugar) into valuable products efficiently. Companies benefit from improved safety conditions and steer clear of hazardous material issues. Moreover, establishing and equipping fermentation facilities can be less expensive.
Synthetic biology may also occasionally allow access to molecules unattainable via traditional methods. Similarly, some plant-derived chemicals, not easily extractable, can be produced through fermentation. Extensive research and manufacturing success bolster interest in synthetic biology and fermentation for chemical APIs.
High Potency APIs (HPAPIs)
An API is deemed high potency if its exposure limit is below 10 micrograms per cubic meter. HPAPIs excel at targeting diseased cells with enhanced specificity, showing superior efficiency in lower doses.
HPAPIs are potent pharmaceutical ingredients that offer effective action at minimal doses. Moreover, they focus on targeting specific disease cells, making them integral in potent drug formulations. Predominantly used in hormonal medications for breast cancer, HPAPIs also play a role in treating glaucoma, cardiovascular, central nervous system, and musculoskeletal ailments.
The global HPAPI market was valued at about US$ 21.2 billion in 2023 and is projected to escalate to around US$ 39.5 billion by 2032, with a Compound Annual Growth Rate (CAGR) of 7.2%.
Market growth is especially driven by rising cancer and hormonal disorder cases where HPAPIs are pivotal in treatment plans. The emphasis on tailored therapies is boosting demand for HPAPIs, thanks to their action’s potency and precision.
A driving force for market growth is the growing incidence of chronic diseases, such as cancer. The advancement of novel HPAPIs has notably enhanced therapy effectiveness and minimized side effects, witnessing high acceptance in current medical practices. Technological progress in manufacturing has bolstered production efficiency and quality, thus reducing costs and improving drug accessibility.
Several contracts and manufacturers, e.g., CDMO, CMO, are erecting new advantageously designed facilities for potent API production. These investments in facilities enable HPAPI-antibody conjugations requiring specialized conditions.
Another critical growth driver is pharmaceutical companies’ escalating R&D investments, resulting in novel and efficient HPAPIs. Companies are advancing their portfolio with innovative HPAPIs addressing unmet needs, notably in oncology and hormonal disorders.
Outsourcing HPAPI manufacturing to seasoned contract organizations (CMOs) contributes to market expansion, allowing pharmaceutical firms to focus on core strengths while maintaining quality production.
Recognizing the significant demand, leading pharmaceutical entities are heavily investing in HPAPI manufacturing capabilities and R&D to amplify their HPAPI product lines, potentially experiencing growth surpassing the traditional API market.