Report

The German Active Pharmaceutical Ingredients (API) market is expected to register a CAGR of 6% over the forecast period.

The COVID-19 pandemic negatively impacted the entire pharmaceutical supply chain, along with disrupting the supply of APIs from India and China. As per the Germany Trade and Commerce, in July 2021, Germany's Federal Minister of Health initiated consultations with European Union partners about the possibility of moving the production of certain active pharmaceutical ingredients (APIs) back to Germany. There was a sharp increase in the shortage risk for essential drugs, such as antibiotics and narcotics for surgery. Due to the shortages, the cost of various medicines and active substances like paracetamol increased, turning the manufacture of medications into a loss-making business. Due to unexpected and massively growing demand in the market, along with expanded delivery delays among the active ingredient manufacturers, various pharmaceutical companies, such as Ratiopharm, canceled orders of certain drugs for winter stockpiling. Such issues forced the government to import medicines based on Tamoxifen from other countries to reduce the shortages. However, with released restrictions and resumed import-export activities across the globe, the studied market is expected to grow over the forecast period.

Other factors, such as the rising prevalence of infectious, genetic, cardiovascular, and other chronic disorders, the rising prevalence of cancer with growing sophistication in oncology drugs research, and the growing adoption of biologics and biosimilars, are boosting the market growth.

The increasing burden of chronic diseases, such as diabetes, neurological disorders, and stroke, are the key factors driving the market growth. As stated by the Alzheimer's Association's 2022 report, more than 1.5 million people in Germany are suffering from Alzheimer's. This number is expected to double by 2050. Thus, the high number of people suffering from Alzheimer's will increase the demand for medicine, which is anticipated to augment the market growth over the forecast period.

Additionally, the rising incidences of infectious diseases in Germany is increasing the demand for APIs for drug and vaccine development. A study published in Clinical Infectious Diseases in October 2022 observed that Invasive Pneumococcal Disease (IPD) levels in children aged 0 to 4 years old began to rebound to baseline levels in April 2021. In addition, IPD cases in people 80 years and older, adults 15 to 34, and children 5 to 14 went above baseline levels in July 2021. Thus, the increasing burden of infectious diseases among the population in the country raises the demand for effective drugs, which further increases the demand for APIs for drug development. This is anticipated to fuel the market growth over the forecast period.

Furthermore, the increasing health expenditure in the country reflects the government and companies' focus on developing effective and safe drugs for treating various chronic as well as other diseases. For instance, according to the data published by OECD in June 2022, Germany's health spending rose sharply from 12.5% in 2020 to 12.8% in 2021 as a share of its GDP. This increase in expenditures is expected to boost the development of treatment drugs and APIs, positively impacting the market growth.

Moreover, the growing company initiatives in developing drugs and increasing adoption of various business strategies, such as collaboration and acquisitions, are also contributing to the market growth. For instance, in June 2022, Sandoz expanded its portfolio with the launch of the generic drug Dimethyl fumarate HEXAL, for the treatment of adults with relapsing-remitting multiple sclerosis (RRMS), in Germany. In November 2022, the Annual Highly Potent Active Pharmaceutical Ingredients Forum took place in Berlin, Germany on the 23rd and 24th of November. The forum addressed the biggest challenges the industry is facing in current conditions in occupational toxicology, like the regulatory landscape, determining toxicology limits, and assessing hazards.

Therefore, owing to the aforementioned factors, the studied market is expected to grow over the forecast period. However, the drug price control policies in the country, stringent regulations for drug approvals, and high competition between API manufacturers are expected to impede the growth of the active pharmaceutical ingredients market over the forecast period.

Germany Active Pharmaceutical Ingredients (API) Market Trends

Oncology Segment Expects to Register a High CAGR

The oncology segment is expected to witness significant growth in the Active Pharmaceutical Ingredients (API) industry in Germany over the forecast period. The factors attributing to the market growth are the rising burden of cancer cases among the population and increasing drug approvals.

Certain factors, such as increasing age, obesity, alcohol abuse, family history of cancer, history of radiation or chemical exposure, reproductive history (such as menarche age and the age of first pregnancy), viral infections (human papillomavirus (HPV)), tobacco use, postmenopausal hormone therapy, and others increase the risk of developing cancer. Rising cancer cases are expected to increase the need to develop effective and safe cancer drugs. This further increases the demand for APIs, such as abiraterone acetate, azacitidine, cabazitaxel, and cytarabine, used to manufacture oncology drugs.

The incidence and prevalence of various types of cancer are growing rapidly due to lifestyle changes. As per the GLOBOCAN 2020 factsheet, in Germany, breast and colorectum cancers were more prevalent in females, while prostate and lung cancers were more prevalent in men. Per the same source, about 69,697 new breast cancer cases were reported in Germany in 2020. This number is projected to reach 71,245 by 2040. Such increasing prevalence of cancer conditions among the German population has led to the rise in demand for cancer drugs, thereby contributing to the growth of the APIs market over the studied period.

Furthermore, the rising company activities and increasing drug approvals in the country are expected to boost market growth. For instance, in January 2021, AstraZeneca and Daiichi Sankyo Company received conditional approval in the European Union (EU) for Enhertu as a monotherapy for the treatment of adult patients with unresectable or metastatic HER2-positive breast cancer who have received two or more prior anti-HER2-based regimens.

Therefore, owing to the factors such as the high burden of cancer among the population and growing healthcare expenditure in the country, the studied segment is anticipated to witness growth over the forecast period.

Branded Segment Expected to Own Significant Market Share

The branded segment is expected to grow over the forecast period owing to various factors, such as the high burden of chronic diseases, growing awareness regarding branded drugs, and increasing company activities in drug development. The statistics published by IDF stated that, in 2021, about 6.1 million people were suffering from diabetes in Germany. This number is projected to double by 2050. High blood sugar caused by diabetes can damage the nerves that control the heart and blood vessels, leading to various cardiovascular diseases. These diseases, such as coronary artery disease and stroke, can narrow the arteries and necessitate the administration of drugs, thereby propelling the growth of the API market.

Additionally, an article published in Neurological Research and Practice in March 2022 stated that 68.9% of German and 50% of international patients had advanced Parkinson's disease. Such a high number of patients diagnosed with the disease is expected to propel the demand for treatment therapies and drugs. This is anticipated to fuel the demand for APIs for drug development, driving the market's growth.

The rising branded drug development in the country is also expected to increase the demand for APIs. For instance, in August 2022, Janssen received conditional approval from EMA for its hemato-oncology drug Tecvalifor for treating multiple myeloma in Germany. In December 2021, the European Union authorized GlaxoSmithKline's Xevudy, a SARS-CoV-2 neutralizing monoclonal antibody, in Germany. Sotrovimab (trade name Xevudy), an additional COVID-19 treatment option, became available in Germany at the end of January 2022.

Similarly, in September 2021, Amarin Corp. launched Vazkepa (icosapent ethyl) in Germany to reduce the risk of cardiovascular events, such as heart attack, stroke, and other problems caused by blocked blood circulation in adults.

Moreover, the rising company activities in facility and business expansions, such as collaboration, partnerships, etc., are also contributing to the market growth. In August 2022, Evonik announced the development of a new cGMP facility in Hanau, Germany, to produce lipids for clinical development and launch innovative medicines. It provides customers with smaller batch sizes of lipids as needed for clinical development. The launch of the new facility further expands Evonik's integrated portfolio of System Solutions for advanced drug delivery of mRNA and nucleic acid therapies, including siRNA, oligonucleotides, and gene delivery. Also, the types of lipids produced at the kilogram scale in this facility will serve a broad range of mRNA and gene therapies, such as infectious disease control, cancer immunotherapy, protein replacement, and gene therapy.

Therefore, owing to the factors such as the high burden of diabetes and Parkinson's diseases, increasing product launches as well as rising company expansion activities, the studied segment is expected to grow over the forecast period.

Germany Active Pharmaceutical Ingredients (API) Market Competitor Analysis

Germany's Active Pharmaceutical Ingredients (API) market is fairly fragmented, with the presence of several key players in the market. Several companies are adopting various business strategies, such as collaboration, facility expansion, partnerships, and product launches, to withhold their market position. Some of the key players in the market are Aurobindo Pharma, Teva Pharmaceutical Industries Ltd, Pfizer Inc., Novartis AG, BASF SE, and Merck KGaA, among others.

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