China Active Pharmaceutical Ingredients (API) Market Size (2024 - 2029)

China Active Pharmaceutical Ingredients (API) Market Analysis

The Chinese Active Pharmaceutical Ingredients (API) market is expected to register a CAGR of 9.1% over the forecast period.

The COVID-19 pandemic has not only impacted the entire pharmaceutical supply chain but, more specifically, disrupted the supply of APIs. The restrictions imposed by the government to avoid the spread of coronavirus among the population restricted more than 40 Chinese manufacturers from supplying APIs to various countries. As per an article published in the International Journal of Pharmacy and Pharmaceutical Sciences in October 2020, the supply of active pharmaceutical ingredients like cephalosporins, azithromycin, and penicillin was restricted due to the high risk of contamination which has led to the shortage of certain kinds of medicines. The scarcity of many drugs and APIs in several countries due to the pandemic allowed Chinese manufacturers to boost API prices. For instance, as per PHARMEXCIL, the cost of API Penicillin increased to USD 8.69 per unit in July 2020 from USD 6.49 per unit in January 2020. Thus, the high prices and shortages of medicines impacted the market growth in China. However, with released restrictions and resumed import-export activities, the export of various APIs and drugs to different countries, such as the United States, is expected to increase market growth over the forecast period.

Other factors, such as the rising prevalence of chronic, infectious, and genetic diseases, along with the increasing prevalence of cancer, growing sophistication in oncology drug research, and the growing geriatric population, are boosting the market growth.

China is one of the few significant countries which produces and supplies active pharmaceutical ingredients (APIs) to other areas of demand. Several resources state that China is a major source country that supplies a heavy number of APIs to the United States. Thus, to address the rising demands from other parts of the world, China is focusing on improving API production in the country. This is expected to boost the growth of the API market in China.

The increase in the number of people affected by various infectious, genetic, cardiovascular, and other chronic diseases is expected to increase the demand for API production in the country. For instance, according to the 2022 statistics published by WHO, 6.40% of the population (i.e., 1,425,887,337 people) is obese in China in 2022. Also, according to 2022 statistics published by IDF, 140.8 million people were living with diabetes in China in 2021. As per the same source, this number is projected to be 174.4 million by 2050 in China. The high diabetic and obese population in the country raises the company's focus on developing advanced and safe drugs, which require a large amount of API, hence propelling the market growth.

Additionally, the rising geriatric population, more prone to develop chronic diseases, such as neurological and cardiovascular diseases, is also expected to increase the market growth. A study published in February 2021 observed that the prevalence rate of Parkinson's disease in the Han population in China was 3.9% in people aged 50 years and above. It is estimated that the number of Chinese patients with Parkinson's disease will increase to 4.94 million by 2030. As per the same source, tremors (54.5%), pain (22.9%), and rigidity (22.1%) were the most frequently reported symptoms in Parkinson's patients. Thus, the expected increase in Parkinson's disease in China is expected to increase the demand for new-generation anti-Parkinson's disease medication. This is anticipated to fuel the demand for APIs, thereby bolstering market growth.

Furthermore, the rising company activities in adopting various business strategies, such as agreements and collaborations, as well as rising product approvals in the country, are contributing to market growth. For instance, in July 2022, Athenex Inc. agreed to sell all its equity interests in its China subsidiaries to TiHe Capital (Beijing) Co., Ltd. Athenex Inc. is primarily engaged in Active Pharmaceutical Ingredient (API) manufacturing operations.

Moreover, the increasing expansion and construction of API manufacturing facilities in the country are also contributing to market growth. In June 2022, WuXi STA opened another high-potency active pharmaceutical ingredient (HPAPI) plant at its Changzhou site in Jiangsu, China, to the growing demand for high-potency API process R&D and manufacturing services. Also, in April 2022, Asychem Inc. completed the construction of two new API production sites, a new 500 cubic meter batch capacity building in its production site in Dunhua, China, and an expansion at the company's Tianjin site, with a batch capacity of 160 cubic meters.

Therefore, owing to the aforementioned factors, the studied market is expected to grow over the forecast period. However, the country's stringent regulations for drug approvals and drug price policies are expected to hinder market growth over the forecast period.

China Active Pharmaceutical Ingredients (API) Industry Segmentation

An Active Pharmaceutical Ingredient (API) is a part of any drug that produces its effects. Some drugs, such as combination therapies, have multiple active ingredients to treat different symptoms or act in different ways. They are produced using highly-technological industrial processes during the R&D and commercial production phases.

The China Active Pharmaceutical Ingredients (API) Market is Segmented by Business Mode (Captive API and Merchant API), Synthesis Type (Synthetic and Biotech), Drug Type (Generic and Branded), and Application (Cardiology, Oncology, Pulmonology, Neurology, Orthopedic, Ophthalmology, and Other Applications). The report offers the value (in USD billion) for the above segments.