Market Trends of Europe Pharmaceutical Contract Manufacturing Industry
The Active Pharmaceutical Ingredient (API) Segment Holds a Major Share in the Market
- The aging population and the rising prevalence of chronic diseases are driving the increased demand for drugs. Also, the focus on developing generic drugs and biosimilars is boosting the demand for active pharmaceutical ingredients (APIs). Furthermore, ongoing research and development in the pharmaceutical sector, coupled with rising healthcare expenditures, are further driving API demand across European countries.
- In response to the increasing demand for APIs, manufacturers are witnessing investment in the expansion of API manufacturing with more capacity. In June 2024, ESTEVE commenced the construction of a new manufacturing unit at its Celra plant in Girona, with an investment plan of EUR 100 million (USD 14.07 million) by 2026. This expansion aims to enhance the production capacity of active pharmaceutical ingredients (API) at ESTEVE's primary industrial hub. The project includes the construction of new production and service buildings and the installation of reaction volumes totaling up to 150 cubic meters. Consequently, ESTEVE's Celra production capacity will increase by 45%, contributing an additional 15% to the company's global capacity. This development at the Girona plant represents a significant advancement in ESTEVE's business of developing, manufacturing, and selling active ingredients for third-party clients (CMO).
- Companies are actively pursuing acquisition and expansion strategies to bolster API manufacturing, driving growth in the sector. For instance, in January 2023, an active pharmaceutical ingredient (API) production plant in Ringaskiddy, Ireland, was acquired by Sterling Pharma Solutions, a multinational contract development and manufacturing company from Novartis. Additionally, the deal includes an ongoing supply agreement with Novartis to continue to manufacture several APIs for cardiology, immunology, and oncology medications at Ringaskiddy. The facility will add capacity to Sterling's expanding API manufacturing capabilities. Financial information was kept private.
- The increasing revenue from APIs in Europe highlights the significant advancements made by pharmaceutical manufacturers. For instance, in FY2023, Cipla Limited generated approximately 39% of its revenue from APIs in European and global markets, underscoring the company's strategic focus on this segment.
Understand The Key Trends Shaping This Market
Download PDF
Germany is Projected to Drive the Market's Growth Rapidly
- Germany is likely to maintain its position as the premier pharmaceutical contract manufacturing market in Western Europe, both in capacity and market share. The region attracts pharmaceutical manufacturers due to its highly skilled and specialized workforce, which is essential for producing highly potent active pharmaceutical ingredients (HPAPIs).
- The country is renowned for its strong intellectual property protections and effective measures against organized crime. The steady annual growth rate is primarily due to the well-established expertise of German CMOs and the government's supportive policies for generics. Approximately 60% of Germany's pharmaceutical products are exported to major markets, including the United States, the United Kingdom, Belgium, the Netherlands, and Switzerland. Furthermore, high productivity levels and a competitive tax system significantly drive the pharmaceutical CMO market in Germany.
- Moreover, as part of their growth strategy, companies are increasingly targeting new regions. For instance, in October 2023, Vetter Pharma, a contract development and manufacturing organization, announced an investment of USD 243 million in a new production facility at its global headquarters in Ravensburg, Germany. This construction aims to enhance aseptic manufacturing capacity and introduce several new commercial filling lines. The initial cleanrooms are scheduled for installation by the end of 2024. Beyond the production facility, the investment includes expanding lab space for analytical services and increasing filling capacity with new commercial production lines at other EU locations.
- Leading German manufacturers and service providers, including BASF, B. Braun, Evonik, Vetter Pharma AG, Wacker, Corden Pharma, and Merck, are significantly enhancing CMO activities in the country's pharmaceutical sector, contributing to the market's growth during the forecast period.
Get Analysis on Important Geographic Markets
Download PDF
