Due to patent expiry of blockbuster drugs and growing trend in pharmaceutical outsourcing, the global highly potent active pharmaceutical ingredients (HPAPIs) market is likely to reach nearly US$ 18.5 billion in 2020, at a CAGR of 6.2 per cent from 2016 to 2020, according to a report by iHealthcareAnalyst, Inc., a global healthcare market research and consulting company.
HPAPIs represent a significant change in the way pharmaceutical innovators are using small molecules to deliver new patient therapies. The shift toward highly potent APIs has not only led to a pipeline of more effective medicines that require lower doses and lead to fewer side effects, but also to new manufacturing challenges.
Growing demand
During the last decade, the demand for HPAPIs has grown rapidly, mainly as a result of advances in clinical pharmacology and oncology research. HPAPIs drug manufacturing, storage and packaging is subject to Current Good Manufacturing Process (cGMP) regulations enforced by the U.S. FDA, EMEA and other international regulatory agencies. Contract manufacturing of HPAPI has been preferred over captive production due to high degree of competition and reduced profitability, geographical advantage and cost-effectiveness.
According to an analysis, they account for about 12 per cent of the total pharmaceutical market, and is set to rise strongly. Although this emerging market is attractive, it presents a significant challenge for pharmaceutical manufacturers to upgrade existing facilities that are set up to handle only non-potent APIs—the challenge being the major cost associated with the specialised containment needed to ensure that employees and their environment are protected from exposure.
Many contract manufacturers are also building new facilities that are designed specifically for the manufacture of HPAPIs, which require an investment of millions of dollars beyond typical GMP (good manufacturing practices) production facilities.
Increasing outsourcing
According to an earlier report by Transparency Market Research (TMR) , increasing outsourcing of manufacturing activities by the HPAPI companies have drastically brought down the cost of drugs. It has also translated into the expansion of geographical spread of the market, thereby pushing HPAPI revenues upward. This change in strategy and supportive regulatory framework to safeguard patent infringement has also allowed pharmaceutical companies to focus on commercialization of drugs and drug development, thus allowing the companies to strengthen their pipelines. The noteworthy reduction in financial burden is expected to be an impactful market driver.
Development of drugs that are aimed at specific results has also substantiated the demand for HPAPI drugs. Furthermore, the biggest advantage of minimal or no side effects of these drugs is making them a preferred therapy option in the healthcare sector. A key market driver in the global HPAPI market is the patent expiry of patented drugs, which is paving the way for generic drug producers. This trend is expected to make the market exceptionally competitive and thus resulting in a sharp decline of prices.
However, despite the impending patent expirations of high revenue generating blockbuster drugs, the market for branded HPAPIs will remain larger than its non-branded counterpart thanks to the high cost of branded drugs.
The capital intensive nature of high potency API manufacturing activities has been the major barrier for the market. Furthermore, the need to hire exceptionally skilled labour for drug development and production is also acting as a restraint for the overall market. Moreover, the lack of universality in establishing norms regarding occupational, health, and environmental safety while researching and manufacturing high potency APIs is also threatening the growth of this market.
The leading players in the global high potency active pharmaceutical ingredient market are Sigma-Aldrich Corporation, Cambrex Corporation, Dr. Reddy’s Laboratories Ltd., Novasep, Lonza Group, Novartis AG, Pfizer, Inc., and WuXi AppTec, states Transparency Market Research (TMR) in a new report. The individual revenue shares of these players range between three and four per cent of the overall market, which has made the competitive landscape exceptionally fragmented, says TMR.
“Companies operating in the global HPAPI market must focus on cost containment to maintain their profit margins,” recommends the lead author of this research report. To reach out to the mass markets, the time is now ripe to focus on bridging the gap between technical expertise and outsourcing, the author adds. To gain the first-mover advantage and to remain a significant occupant in the market, players are increasingly building strategic partnerships.
According to TMR, the global HPAPI market will represent an opportunity worth US$25.11 billion n by 2023 as compared to US$2.64 billion in 2014. The market is expected to exhibit a CAGR of 7.8 per cent between 2015 and 2023. The HPAPI market will be driven by the oncology drugs segment, which is projected rise at a CAGR of 8.3 per cent over the forecast period as contract manufacturing gains importance. The report states that Asia Pacific will be the fastest-growing geographical segment at a robust CAGR of 10.1per cent from 2015 and 2023.
Increasing opportunities
Highly active chemical substances or drugs are one of the fastest growing segments of pharmaceutical industry. Handling, containment, manufacturing, facility design, machinery and regulatory requirements of these compounds are more stringent and different from conventional APIs. There is great demand for HPAPIs since the last 17 years. Advancements in clinical pharmacology and oncology, AIDS research has resulted in emergence of HPAPIs in market. Large numbers of HPAPIs are currently undergoing clinical trials and will soon reach commercialisation.
According to experts ,due to the potent nature of HPAPIs, there must be a keen eye on the evaluation of these compounds for toxicity. Also for manufacturing pharma products, safety and containment issues must be monitored. In addition, with factors such as fewer FDA drug approvals, over-supply and stiff competition from Asia-Pacific producers putting pressure on profitability and margins in the ‘traditional’ API sector, the rapidly growing HPAPI segment has an annual double digit growth rate and has become something of a ‘promised land’ for CMOs.
While the high potency market undoubtedly offers major opportunities for CMOs and research organisations in the pharmaceutical sector, the barriers to market are significant and cannot be undertaken lightly. Neither can compromises be made or shortcuts taken. The fact that there are still relatively few companies producing HPAPIs at the commercial scale is testament to the levels of investment, expertise, infrastructure and technology that are required to achieve sustainable market share.
Highly potent active ingredients are substances that take full effect even in extremely small doses. HPAPIs are highly effective and often highly selective substances that have been developed to treat life-threatening diseases. The therapeutic doses of such active ingredients are often only one-hundredth of the dosage of conventional headache pills. “Improved optimisation processes and state-of-the-art screening technologies enable us today to find and develop drug candidates that are significantly more effective and selective and thus take effect already at a low dose. Medical researchers are therefore increasingly turning their attention to HPAPIs for cancer treatments but also some cardiovascular drugs, and this segment of the drug market is growing continuously.
During the last decade, the demand for HPAPIs has grown rapidly, particular interest in HPAPI–antibody conjugate technology, which uses monoclonal antibodies to selectively deliver HPAPIs to specific cancer tumours. When conjugated to the antibody, the HPAPI targets cancer cells specifically and thereby spare non-target cells many of the toxic effects. gemtuzumab ozogamicin is an example of such a drug. It is commercialised for treating acute myeloid leukaemia, and numerous other antibody drug conjugates are in preclinical or Clinical Trials.