The Pharma industry plays a significant role in the healthcare sector. China and India are top players in manufacturing and exporting pharma products around the world. In the recent pandemic, India’s contribution in supplying the Covid-19 vaccine to neighboring countries was huge.

The pharma sector saw a steep rise in demand for raw materials and APIs this year. Even the micro, small-medium sector enterprises in the state were manufacturing more medicines than before. The primary factor is still the Covid-19, as the drugs for treating Coronavirus symptoms also rose in demand.

The recent challenges in the pharma industry have brought the requirement of API in Pharma even more. But, what is an API?

Pharma is a huge sector, but the value chain can be categorized into two categories.

  • API and finished formulation

API or Active Pharma Ingredient is the active component (biological) of a medicine/drug (cream, capsule, tablet, injunction) that produces the required effects.

The finished formulation is the process of mixing ingredients to produce a specific drug.

What does API in Pharma really mean?

API is the abbreviation of Active Pharmaceutical Ingredient. 

It is a raw material that is included in drugs. There is a slight difference between API and raw materials. 

API is a biologically active component used in drugs to produce intended outcomes. It is one of the two ingredients in drugs, and the other one is excipients. An excipient is a chemically inactive substance that delivers the effects of API.

API and raw material are sometimes confused with being the same by many. Raw materials are the base chemical components that are used to produce an API. Hence, the API producing companies procure raw materials to make this (API) active component. Then the API is sold to the pharma manufacturers who use it to create medicines/drugs.

The top API manufacturing companies are as follows:

  • Divis Laboratories
  • Aarti Drugs
  • Hikal
  • Neuland Labs
  • Solara Active Pharma Sciences

How are the APIs made?

The API market is a multi-billion-dollar market. These are manufactured in large production plants, and it involves complex chemical processes and various steps. Since the last few decades, several manufacturers have outsourced their API production process to Asia because of lower labor charges.

The major raw material suppliers and pharma manufactures are present in China and India. Both countries dominate in the production and export of pharmaceutical and medical equipment.

How is the Indian and global API market doing right now?

The price of APIs such as paracetamol was Rs 300 per Kg before the Covid impact, and now it has reached Rs 900-100 per Kg range. Some manufacturers also faced a lack of raw materials in mid-2021, and the demand for drugs is going up every day. Governments are taking measures to tackle these issues as soon as possible.

Another reason for the low supply of raw materials is the broken supply chain across the world. Logistics have registered an increase of 10-20% owing to the hike in prices of fuel and CNG. Overall, the industry requires a strong supply chain for raw materials.

The global active pharma ingredients market is expected to reach USD 248.3 billion by 2027 from USD 187.3 billion in 2020. And CAGR of 5.8% during the forecast period. The surge of Covid cases worldwide had a significant role in active pharma ingredient producers’ development over the forecast period. Also, read more article on Technos Daily.

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