Expected Surge in Revenue:
The pharmaceutical excipients market is projected to reach USD 10.6 billion by 2026 from USD 7.9 billion in 2021, at a CAGR of 5.8% during the forecast period.
Major Growth Boosting Factors:
The overall growth of the pharmaceutical excipients market is largely driven by the growing pharmaceuticals market, advancements in functional excipients, and the growing generics market. The rapidly growing biopharmaceuticals sector will also influence market growth for pharmaceutical excipients.
However, the increasing regulatory stringency regarding the approval of drugs and excipients along with the cost and time-intensive drug development process are expected to restrain the growth of this market during the forecast period.
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Restraint: Cost and time-intensive drug development process
According to the California Biomedical Research Association (CBRA), it takes an average of 12 years for a drug to travel from the research lab to the patient, including 1–6 years for toxicology studies alone. Also, only 5 in 5,000 drugs that begin preclinical testing ever make it to human testing. Of these, only one is approved for human usage.
Moreover, late-stage failures in the drug development process increase R&D costs and impact the profit margins of pharmaceutical companies. The intensifying regulations on the quality and safety of the excipients and drugs result in the need to upgrade current manufacturing and quality assurance practices, which adds to the overall manufacturing cost. Thus, although excipient and drug production have seen significant advances in recent years, the requirement of high capital investments is expected to hamper market growth during the forecast period.
Opportunity: Shifting focus of pharmaceutical manufacturing to emerging countries
The traditionally lucrative pharmaceuticals market is becoming challenging from a growth perspective due to the diminishing drug pipeline, government-induced pressures on healthcare cost, and the increasing regulations on innovative products. This is encouraging pharmaceutical manufacturers to move their manufacturing bases closer to high-growth emerging markets. Through this, manufacturers can take advantage of low-cost manufacturing and financial benefits in terms of attractive tax rates and lenient regulatory guidelines for manufacturing. Many major excipient manufacturers are either planning capacity expansions of their existing plants in emerging countries or setting up new manufacturing plants in emerging markets such as China and India.
The organic excipients segment is expected to grow at the highest CAGR during the forecast period
Based on the products, the pharmaceutical excipients market is segmented into organic and inorganic chemicals. Organic chemicals segment held significant share in 2021. The large share of this segment can be attributed to the use of these chemicals in a majority of pharmaceutical formulations. Moreover, rising global demand for pharmaceuticals has fueled the growth of drug production, thereby, positively influencing the segmental growth.
The oral formulations segment is expected to account for the largest share of the Pharmaceutical Excipients market
Based on formulation, the pharmaceutical excipients market is segmented into oral, topical, parenteral, and other formulations. In 2021, the oral formulations segment accounted for the largest share of the pharmaceutical excipients market, mainly because oral formulations are the most common drug delivery route.
The fillers & diluents segment is expected to have substantial market size during the forecast period.
Based on functionality, the pharmaceutical excipients market is segmented into fillers & diluents, binders, suspending & viscosity agents, flavoring agents & sweeteners, coating agents, colorants, disintegrants, lubricants & glidants, preservatives, emulsifying agents, and other functionalities. The fillers & diluents segment accounted for the largest share of the pharmaceutical excipients market in 2020. This can be attributed to the increased use of fillers and diluents in solid oral drug development and production.
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Asia Pacific is expected to account for the highest CAGR for players operating in the Pharmaceutical Excipients market
The Asia Pacific is the fastest-growing and most dynamic pharmerging market globally, poised to be the most attractive regional market due to its large base of generic drug manufacturers. Several factors, such as the growing Asian scientific base (due to the establishment of R&D centers and manufacturing facilities by major players in recent years); growth in the Asian pharmaceutical markets and pharmaceutica manufacturing capabilities; and the large patient pool are contributing to the growth of the pharmaceutical excipients market in the APAC.
The prominent players in this market are DuPont (US), Colorcon Inc. (US), BASF SE (Germany), Evonik Industries AG (Germany), Ashland Global Holdings Inc. (US), Kerry Group plc (Ireland), Roquette Freres (France), Eastman Chemical Company (US), Air Liquide S.A. (France), and Merck KGaA (Germany).