API Manufacturing Market in Europe

Europe Active Pharmaceuticals Manufacturing Industry is changing drastically since Covid-19 Pandemic. A robust pharmaceutical industry is bound to create a huge requirement for active pharmaceutical ingredients in the region. The demand for API in the region is rising and pharmaceutical companies and contract manufacturers are expanding their production capacity to meet their demand. In comparison to other regions, the reliance of Europe on foreign markets for their API needs is lesser.  Around 65% of the APIs consumed in Europe are manufactured in the home market while the remaining is sourced from other countries such as China and India.  Switzerland and Germany exhibit the highest demand for API in the Europe region, accounting for 38% regional demand. Europe is also an exporter of active pharmaceutical ingredients to the United States, India and other parts of the world. In 2021, around 30% of the APIs consumed in the United States was imported from Europe while the region accounted for 16% of the total API imports by the Asia Pacific countries.

We surveyed 12 pharmaceutical manufacturers in the Europe region out of which five agreed that they have a high dependence on China for their API needs. The remaining 7 companies feel they can meet most of their API requirements from their home country suppliers and self-production.

“We know that there is huge demand for APIs across the globe. We have plans to expand our production capacity by the end of 2020. We are already supplying active pharmaceutical ingredients to a number of drug manufacturers in Europe. Our aim is to scale our production and capitalize upon the opportunities in the export market”. – executive from a European API manufacturing company

Europe region is the largest pharmaceutical manufacturer as well as exporter. The region is home for top pharmaceutical companies who supply drugs to the global market. In Europe, countries such as Germany, Switzerland, Belgium, Italy and Ireland are among the largest exporters of pharmaceutical products. In 2021, the total value of exported medicines from Europe to other parts of the world stood at $315 billion which accounts for approximately 76% of the global medicine exports in terms of value. Switzerland is the largest producer of pharmaceutical products and generated a revenue of $47.2 billion in 2021 while Germany remained at the second position with a revenue contribution of $32 billion.

15 out of the 20 countries globally with highest healthcare spend are European. Europe is also a big consumer of pharmaceutical products. We estimate that the region holds a revenue share of 27% in terms of pharmaceutical consumption. The region is characterized by an advanced healthcare system and high healthcare spend. The Europe pharmaceutical demand is expected to grow at a CAGR of 3.5% during the next six years. Ageing population and rising health problems are the major driving factors for the European pharmaceutical industry.                                  

Recent developments in the Europe API manufacturing Industry:

• In February 2020, Sanofi announced that it would start a new API manufacturing company to meet the API requirements of the home market as well as abroad. The company has a sales target of 1 billion Euro by the end of the end of 2020. This would help the company mitigate its supply chain risks and reduce its dependence upon other countries such as China and India.
• In May 2020, Evonik announced that it will scale production of API in its German facilities to match with the rising market demand. The Company will invest $27 million in the initial stage of its expansion project focused towards production of APIs for specialized drugs.