Increasing demand for pharmaceuticals as a consequence of growing global geriatric population base and the introduction of innovative products are expected to drive global excipient demand over the next six years. Moreover, the presence of a large amount of untapped opportunities in emerging markets such as India, China and Brazil, in terms of unmet medical needs and low cost manufacturing options is also expected to fuel market demand.Thus the global market for excipients is expected to reach US$ 5,226.1 million by 2020, according to a new study by Grand View Research, Inc.
China, India, and Japan are likely to drive the growth of the Asian market. A majority of the growth in these markets is driven by increase in outsourcing to these locations mainly due to low labour costs. These are also some of the most lucrative markets for manufacturing of generic drugs for the global market.
While the key factors driving growth in major markets like the United States and Europe include the aging populations and high demand for pharmaceuticals, in the emerging Indian and Chinese markets, growth in consumption of excipients is driven by rising incomes and willingness to spend more on healthcare.
The global market is mainly driven by the increasing demand for functional excipients from the pharmaceutical industry. The rapid increase in the generics market due to patent expiration of many blockbuster drugs is expected to drive the sales of excipients . However, increasing quality compliance and regulatory requirements for excipient manufacturers in order to ensure more transparency in supply chain may inhibit the growth of the market to a certain extent.
North America contributes the largest share to the global market, followed by Europe, Asia-Pacific, and the Rest of the World. Developed geographies like North America and Europe are likely to grow at lower CAGRs as compared to the Asian market. The shift of focus of the pharmaceutical industries towards Asia and the high import of generics from emerging markets are hindering the growth of these geographies.
According to a study from The Freedonia Group, Inc, a Cleveland-based industry market research firm, the demand for pharmaceutical excipients in the US is projected to rise 4.3 per cent per year to $ two billion in 2018. In volume terms, demand is expected to grow 1.9 per cent annually to 900 million pounds over the same period,
According to analyst Emily Park, “The best growth prospects are expected for products that offer a good balance among performance, compatibility with other excipients, and overall cost.” Excipients for use in parenteral preparations will offer good opportunities as output of these formulations is expected to rise at a healthy pace going forward. Excipients in oral formulations such as tablets and capsules will also see strong growth as shipments of oral preparations are expected to accelerate.
Product versatility will be a key factor impacting product mix in excipient demand going forward, especially as specialty excipient blends play an increasingly important role in pharmaceutical formulation. Polymers -- including cellulose derivatives, povidone, starch, polyethylene glycol, acrylic polymers, and natural gums -- are expected to especially benefit from this trend as many of these products can function in multiple applications and are easily formulated with other excipients. These favorable characteristics will serve to offset the higher prices associated with some polymers.
Trends in pharmaceutical output by dosage formulation will also have a strong influence on excipient demand by application. Output of parenteral preparations is expected to rise at an especially strong pace through 2018, supporting demand for suspension agents and preservatives. Solvents are also projected to benefit from increased shipments of parenteral drugs, although gains in dollar terms will be limited by the continued decline in glycerin prices due to oversupply. Oral preparations are the largest category of pharmaceutical dosage formulations, and oral pharmaceuticals tend to require more excipients than other types of drugs; as a result, trends in oral pharmaceutical output have a significant impact on excipient demand. Shipments of oral pharmaceuticals are forecast to rise at a faster pace than in the 2008-2013 period, supporting accelerated gains in demand for fillers, binders, coatings, flavoring agents, capsules, and disintegrants. Oral formulations such as delayed- or extended-release tablets and capsules or orally-dissolving tablets are expected to increase their market share, further boosting demand for excipients such as binders and disintegrants.
The global market is segmented by product, functionality, and geography. By product, the pharmaceutical excipients market is broadly classified into organic chemicals, inorganic chemicals, and others. The organic chemicals market is further segmented as carbohydrates, proteins, oleochemicals and petrochemicals, and other organic chemicals. The inorganic chemicals market covers calcium products, halites, metal oxides, and other inorganic materials. The other products mainly include the USP water for pharmaceutical use. By functionality, the pharmaceutical excipients market is classified into fillers and diluents, binders, suspension and viscosity agents, coatings, flavoring agents, disintegrants, colorants, lubricants and glidants, preservatives, and other applications.
At the same time the robustly growing oral solid dosage form (OSDF) excipients market is valued at nearly $ 2.3 billion in the United States, Europe, India, and China, according to a recent analysis by the worldwide consulting and research firm Kline & Company.
“Due to this growing demand, the major markets will continue to flourish; however, it is worth noting that emerging markets will outpace major markets. Driven by the Indian and Chinese markets, the consumption of OSDF excipients is expected to grow at a healthy pace of 7.4 per cent per year until 2018”, says Nikola Matic, Industry Manager at Kline’s Chemicals & Materials practice
Although the major markets of Europe and the United States have similar volume to the emerging markets of India and China, which currently stand at approximately 100,000 tons per region, the market values are very different from one region to another. This is due to the different types of excipients used based on the geography. While mature markets are dominated by functional and usually more expensive excipients, emerging markets are looking to use cheaper alternatives, such as native starches.
“The added properties of some excipients allow more functional finished products, for instance, offering sustained-release of the active ingredient. Excipients vary greatly in price from $ one to $40 per kilo, and emerging markets are dominated by cheaper alternatives. However, prices are not the only factor affecting the excipients market, as the consumption of OSDF excipients is driven by three different levels of drivers and restraints,” explains Nikola Matic.
The consumption of excipients is primarily driven by the global growth of the pharmaceutical industry itself. This is the first of the three levels, and its key drivers include aging populations in mature markets and economic growth in emerging markets. These macro drivers are continuing to drive demand for pharmaceuticals.
The second level consists of the factors affecting OSDFs in particular. For their easy use and manufacturing, OSDFs are favored over other dosage forms, which again positively affect the market of OSDF excipients.
The third level affecting growth consists of the trends shaping the OSDF excipients market internally. It notably includes the larger growth of excipients used in tablets due to the increased instances where tablets are preferred to capsules.Another example is the expansion of orally disintegrating tablets (ODTs),a successful sub-segment within OSDFs, which also benefit specific excipients.
Finally, the growth of functional excipients which allow controlled-release and sustained-release of active ingredients within a pharmaceutical product is also a micro-factor reshaping the consumption of excipients in both, mature and emerging market.
The major players in the pharmaceutical excipients market include Ashland, Inc. (U.S.), BASF (Germany), Dow Chemical Company (U.S.), Roquette (France), FMC Corporation (U.S.), Evonik (Germany), ABF (U.K.), ADM (U.S.), Lubrizol (U.S.), and Croda (U.K.). Some of the players that have strong market shares in particular segments are JRS Pharma (Germany), DFE Fonterra (Germany), Meggle (Germany), Colorcon (U.S.), Aventor (U.S.), Cargill (U.S.), and Budenheim (Germany).