Pharmaceutical API and Formulation Market

Pharmaceutical API and Formulation Market Overview

The global Pharmaceutical API and Formulation Market size was valued at USD 217.24 billion in 2024 and is predicted to reach USD 326.12 billion by 2030 with a CAGR of 7.0% from 2025-2030.

Some of the factors that drives the pharmaceutical API and formulation industry is the global rise in healthcare expenditure followed by boosting aging population and growing chronic disease world-wide. The market is retarded by complex regulatory compliance but at the same time, the use of artificial intelligence (AI) in pharmaceutical API synthesis presents bright future. Moreover, numerous notable players such as Axplora Group GmbH, Sterling Pharma Solutions Limited, and Pfizer Inc. are embracing various business tactics such as expansion and collaboration to maintain their dominance in the market.

Global Growth in Healthcare Spendings Fuels the Market Growth

The global pharmaceutical API industry is driven by the growing healthcare spending as increasing healthcare spendings enhances access to medical services and equipment boosting demand of wider scope of pharmaceutical products. The U.K. spending on healthcare totalled USD 371 billion during 2023, an increase of 5.6% from 2022, as per the U.K. Office for National Statistics. On the contrary, according to CIHI report in Canada, healthcare expenditure summed USD 372 billion or USD 9,054 per Canadian in 2024 reflecting a 5.7% growth. Increasing health spendings encourage pharma companies to spend on research and development to develop new drug that fuels the market growth.

Boosting Aging Population Drives the Market Growth

The industry is driven by the growing aging population that acts as a catalyst for the age-related conditions requiring the utilization of pharmaceuticals to treat health related conditions. According to the World Population Prospect issued in 2022, the population proportion aged 65 years or above is expected to grow from 10% in 2022 to 16% in 2050. With increase in aging population, there is proportionate increase in age related diseases such as cardiovascular diseases, diabetes and neurodegenerative conditions requiring drug APIs thereby promoting market growth.

Growing Chronic Diseases Fuels the Market Growth

The industry is spurred by growing chronic disease conditions such as cancer, osteoarthritis and osteoporosis around the world as it increases demand for proper treatment against the surged number of patients. According to the World Health Organization (WHO), 20 million new cases of cancer occurred in 2022 and is forecasted to reach 35 million by the year 2050 representing an increase of 77% within the period of three decades. The growing patient base prompts pharmaceutical companies to invest in the development of new APIs and advanced formulations for chronic disease management leading to boost in the market.

Complex Compliance and Trials Hinder Market Growth

Regulatory bodies impose strict clinical trials, stability testing, post market surveillance and approval requirements to assure safety of the drug formulation that leads to delay of the new API product entering the market ultimately hindering the market growth.

Integration of AI in Pharmaceutical API Synthesis Creates Opportunities

Integration of AI in pharmaceutical API synthesis is anticipated to create significant future opportunities in the industry. The integration shortens the drug development life cycle by improving gene-sequencing work and by predicting drug efficacy along with side effects. For instance, in April 2024, a team of professor at ETH Zurich demonstrated the development of an algorithm that uses AI to design new APIs from protein structure. The project demonstrated the potential of AI in the pharmaceutical industry showcasing its bright future along with reduced side effects of the finished product.

Market Segmentations and Scope of the Study 

The pharmaceutical API and formulation market report is divided on the basis of synthesis, type of drug, manufacturers type, brand, potency, application, end-user and region. On the basis of synthesis, the market is segmented into biotech and synthetic. Biotech is further divided on the basis of type and product. Based on type, biotech is further segmented into generic APIs and Innovative APIs. Based on product, biotech is further segregated into monoclonal antibodies, hormones, cytokines, recombinant proteins, therapeutic enzymes, vaccines, and blood factors. Synthetic is further divided on the basis of type and on the basis of type, synthetics is classified as generic APIs and synthetic APIs. 

On the basis of type of drug, the market is segmented into prescription and OTC. On the basis of manufacturers type, the market is grouped into captive APIs and merchant APIs. On the basis of brand, the market is classified into patented/innovative APIs and generic APIs. On the basis of potency, the market is segregated into non-potent API and highly potent API. On the basis of application, the market is grouped into cardiology, pulmonology, oncology, ophthalmology, neurology, endocrinology, gastroenterology, nephrology, orthopaedic, and others. 

On the basis of end-users, the market is segmented into pharmaceutical and biotechnological industry, contract research organisations, contract manufacturing organisations, and others. The regional breakdown and analysis of each of the aforesaid segments include regions consisting of North America, Europe, Asia-Pacific, and RoW. 

Geographical Analysis

North America region accounts for the highest pharmaceutical API and formulation market share and is projected to maintain the leadership within the region in the coming years as ageing population pushes the use of pharmaceuticals as a means for health-disease management. According to the Pan American Health Organisation 2022, 15.12 million populations of aged 60 plus lived in Mexico in 2022, and is projected to grow to 31.50 million by the year 2050, marking a growth rate of 108%. The surge in the aging population leads drug companies to focus on the introduction of new APIs and sophisticated formulae resulting in the surge of the market growth. 

Additionally, the market’s growth is also observed due to the growing burden of chronic disease that increases the pharmaceutical API and formulation market demand for good treatment leading to the use of pharmaceuticals. According to the National Cancer Institute 2024 report, as of 2022, 18.1 million cancer patients existed in the U.S. and is expected to increase and reach 26 million by the year 2040 at the rate of 43.6%. The growing chronic conditions boost the pharmaceutical industry prompting pharma manufacturers to develop new drug formulation leading to boost in the market growth. 

Asia-Pacific is the most rapidly growing region globally and is expected to retain its position in the future years because of the region's boosting pharma sector. Indian pharma industry aggregated USD 65 billion in 2024 and is projected to reach USD 130 billion in 2030, a growth of 100% according to the Ministry of Commerce and Industry. The boosting pharmaceutical sector prompts the manufacturers to innovate and develop new drugs that leads to growth in the market. 

Moreover, the market growth in the region is also witnessed due to the growing health care spendings that facilitates demand of broader range of pharmaceutical products driving innovation and research. As per the 2023 report released by Bain and Company, Asia-Pacific is projected to be the fastest growing region in healthcare spending globally equating 20% of total spending by the year 2030. Pharma companies invest more in research and development with rise in healthcare spendings and this leads to development of new drugs and formulations that boost the pharmaceutical API and formulation market growth.

Competitive Landscape

Various key players operating in the pharmaceutical API and formulation industry are Pfizer Inc., Cipla Ltd., Lupin Pharmaceuticals Inc., Sanofi Winthrop Industrie, BASF SE, Merck KGaA, GlaxoSmithKline plc, Novartis AG, Cambrex Corporation, Sterling Pharma Solutions Limited, Dr. Reddy’s Laboratories Ltd., Corden Pharma International GmbH, Axplora Group GmbH, AbbVie Inc., Saurav Chemicals Ltd., and others. These companies are adopting various strategies such as expansion and partnership to maintain their dominance in market.

For instance, in February 2025, Axplora Group GmbH announced the investment of USD 52 million to expand its API small molecule and ADC manufacturing capabilities in France. The investment is expected to upgrade company’s infrastructure and enhance its peptide purification capabilities in European region. 

Furthermore, in October 2024, Sterling Pharma Solutions Limited partnered with Soligenix to manufacture a GMP-quality synthetic hypericin for its oncology drug. The partnerships show the company’s vision of continuous research and development in the domain of pharmaceuticals. 

In addition, in July 2024, Pfizer Inc. announced extending its automated active pharmaceutical ingredient (API) factory in Singapore. The expansion demonstrates the company's determination to diversify its global product portfolio.

Key Benefits

• The report provides quantitative analysis and estimations of the pharmaceutical API and formulation market from 2025 to 2030, which assists in identifying the prevailing market opportunities.

• The study comprises a deep-dive analysis of the current and future pharmaceutical API and formulation market trends to depict prevalent investment pockets in the industry.

• Information related to key drivers, restraints, and opportunities and their impact on the pharmaceutical API and formulation market is provided in the report. 

• Competitive analysis of the players, along with their market share is provided in the report.

• SWOT analysis and Porters Five Forces model is elaborated in the study.

• Value chain analysis in the market study provides a clear picture of roles of stakeholders.

Pharmaceutical API and Formulation Market Key Segments

By Synthesis

• Biotech

  • By Type

    • Generic APIs

    • Innovative APIs

  • By Product

    • Monoclonal Antibodies

    • Hormones

    • Cytokines

    • Recombinant Proteins

    • Therapeutic Enzymes

    • Vaccines

    • Blood Factors

• Synthetic

  • By Type

    • Generic APIs

    • Synthetic APIs

By Type of Drug

• Prescription 

• OTC

By Manufacturers Type

• Captive APIs

• Merchant APIs

By Brand

• Patented/Innovative API

• Generic API

By Potency

• Non-Potent API

• Highly Potent API

By Application

• Cardiology

• Pulmonology

• Oncology

• Ophthalmology

• Neurology

• Endocrinology

• Gastroenterology

• Nephrology

• Orthopaedic

• Others

By End-User

• Pharmaceutical and Biotechnological Industry

• Contract Research Organisations

• Contract Manufacturing Organisations

• Others

By Region

• North America

  • The U.S.

  • Canada

  • Mexico

• Europe

  • The U.K.

  • Germany

  • France        

  • Italy        

  • Spain        

  • Denmark        

  • Netherlands        

  • Finland        

  • Sweden        

  • Norway        

  • Russia

  • Rest of Europe

• Asia-Pacific

  • China

  • Japan

  • India

  • South Korea

  • Australia

  • Indonesia

  • Singapore

  • Taiwan

  • Thailand

  • Rest of Asia-Pacific 

• RoW

  • Latin America

  • Middle East

  • Africa

Key Players

• Pfizer Inc.

• Cipla Ltd.

• Lupin Pharmaceuticals Inc.

• Sanofi Winthrop Industrie

• BASF SE

• Merck KGaA

• GlaxoSmithKline plc

• Novartis AG

• Cambrex Corporation

• Sterling Pharma Solutions Limited

• Dr. Reddy’s Laboratories Ltd.

• Corden Pharma International GmbH

• Axplora Group GmbH

• AbbVie Inc.

• Saurav Chemicals Ltd. 

REPORT SCOPE AND SEGMENTATION:

Parameters	Details
Market Size in 2024	USD 217.24 Billion
Revenue Forecast in 2030	USD 326.12 Billion
Growth Rate	CAGR of 7.0% from 2025 to 2030
Analysis Period	2024–2030
Base Year Considered	2024
Forecast Period	2025–2030
Market Size Estimation	Billion (USD)
Growth Factors	Rising aging population drives the industry. Growing incidence of chronic diseases boosts the market. The rising healthcare expenditure drives the growth of the market.
Countries Covered	28
Companies Profiled	15
Market Share	Available for 10 companies
Customization Scope	Free customization (equivalent to up to 80 working hours of analysts) after purchase. Addition or alteration to country, regional, and segment scope.
Pricing and Purchase Options	Avail customized purchase options to meet your exact research needs.