The global market for bulk drugs has grown substantially over the last few years. This market also known as APIs (Active Pharmaceutical Ingredients) market acts as suppliers to broadly 3 kinds of segments namely prescription drugs which are branded, OTC (Over the Counter) drugs and general prescription drugs. Of late, the last category which is general prescription drugs have emerged as one of the drivers of the bulk drugs segment globally. There are several pharmaceutical bulk drugs manufacturers across the globe.
How’s the Bulk Drug Market Like?
The bulk drugs market is highly sparse with a variety of drug producers who can be broadly clubbed into three groups:
- Contract manufacturers – Generally the large players choose intermediaries to do all the intermediate stages of production while they finish the final stages. Quality and cost are two of the most important concerns with regards to the contract manufacturers market.
- Niche drug manufacturers – There are drug manufacturers who focus on specialty domains and niche areas such as synthesis of rare ingredients. A great degree of focus goes into the confidentiality and quality for these types of manufacturers as well.
- Commodity manufacturers – Historically, commodity bulk drug manufacturers served inputs to the generic drug producers. Cost remains to be the key driver in this segment.
Challenges of the Global Bulk Drug Market
The bulk drug market has been running on overcapacity with a lot of capacity getting generated in this segment which has outperformed the demand. This is considerably attributable to the failure of rapid new drug launches. Moreover, stiff competition has made US and UK drug producers a bit worried while the market in China and India due to low cost yet high quality have witnessed strong growth. Despite the challenges the industry has been facing, in recent times it has been coming up really well and this being still a growing market, has a lot of room for opportunity in the near future with demand picking up.
Future Outlook of this Industry
Although cost remains an important challenge in this industry, increased capacity consolidation is likely to blur the differences that exist between bulk drug manufactures and the generic ones. With increased scale and process efficiency, the challenges of this market are most likely to erode away if not in the immediate term, certainly over a larger frame of time. With developing countries scaling up their capacities, there is likely to be increased shift in value added products with the capacity utilization of US and Europe likely to relatively come down.
Despite some of the challenges that have overshadowed this industry, there have been a lot of improvements that have already started in the last few years which allows us to be optimistic about the future prospects of this highly capable and diversified industry. Moreover, with abundance of pharmaceutical bulk drug manufacturers across the globe, there is a lot of research and development that goes in to improve the efficiencies and operate on larger scale to cut down on the cost components.