Pharmaceutical Manufacturing Market to Surpass USD 2,301.6 Billion By 2032 | Generic Prescription Drugs to Remain at Top with Over 61% Contribution Says Astute Analytica

The pharmaceutical manufacturing market is experiencing a surge in demand for affordable generic drugs, fueled by patent expirations, cost pressures, and aging populations. India leads in generic production, while technological advancements and personalized medicine drive innovation overall. Challenges remain in complex regulations, R&D costs, and maintaining stable global supply chains.

New Delhi, April 16, 2024 (GLOBE NEWSWIRE) — The Global Pharmaceutical Manufacturing Market is projected to reach a size of US$ 2,346.33 billion by 2032, up from US$ 859.5 billion in 2023, at a CAGR of 11.56% during the forecast period 2024–2032.

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As per Astute Analytica’s recently published report, the pharmaceutical manufacturing market is characterized by extensive investment in research and development (R&D).  In 2022 alone, the industry spent approximately $244 billion on R&D, with projections indicating that spending could exceed $300 billion by 2028.  Major players typically dedicate around 20% of their revenues towards R&D, with companies like AstraZeneca exceeding that benchmark by spending over 22% of prescription drug revenues.  Industry giants Johnson & Johnson and Merck invested $82.6 billion and 28.3% of their revenue respectively, into R&D endeavors.  The United States stands as the dominant global pharmaceutical market, followed by other developed countries and emerging markets. This sector is a cornerstone of the global economy, generating over $1.48 trillion in sales during 2022, with approximately 46% of those sales originating in the United States.  Traditionally, large pharmaceutical companies have led the market due to significant investments in R&D and marketing strategies.

Digitalization and automation trends are transforming the landscape of pharmaceutical manufacturing market, resulting in greater efficiency and cost savings. Furthermore, drug manufacturers are increasingly outsourcing parts of their R&D to clinical research organizations (CROs) as a cost-reduction strategy.  The application of big data in clinical research is another significant development within the pharmaceutical R&D sphere. The projections indicate that top global biopharma drugs could achieve lifetime sales of up to $28 billion by 2028. However, pharmaceutical companies face patent expiration risks between 2023-2028, with estimated revenue losses ranging from $23-28 billion.

The global active pharmaceutical ingredients (API) market continues to grow, reaching a value of $238.47 billion in 2023. This market is expected to expand at a CAGR of 6.6% from 2024 to 2032, with the Asia-Pacific region holding the largest share in 2023.  China maintains its position as the largest producer and exporter of APIs worldwide. Contract manufacturing organizations (CMOs) are vital components of the pharmaceutical industry.  The global pharmaceutical contract manufacturing market was valued at $172.8 billion in 2023, projected to grow at a CAGR of 7.7% from 2024 to 2032.  Pharmaceutical companies benefit from outsourcing to CMOs, reducing costs, enhancing efficiency, and allowing them to focus on core competencies.

The United States holds the highest pharmaceutical spending per capita globally, reaching $1,310 in 2022. Germany and Japan follow with per capita spending of $883 and $864 respectively. These figures underscore the substantial role pharmaceutical spending plays in the overall healthcare expenditures of many nations.

Key Findings in Global Pharmaceutical Manufacturing Market

Market Forecast (2032) US$ 2,301.6 billion
CAGR 11.56%
Largest Region (2023) North America (45.9%)
By Drug Type Generic Prescription Drug (61.7%)
By Formulation Tablets (31.7%)
By Route of Administration Oral (66.3%)
By Therapeutic Application Pain (32.7%)
By Manufacturing Facility In-House Facility (55.5%)
By Distribution Channel Retail Channel (71.7%)
Top Trends
  • Rise of Biologics and Biosimilars
  • Shift Towards Personalized Medicine
  • Adoption of Digital Technologies: Data analytics, AI, and automation transforming manufacturing processes.
Top Drivers
  • Aging Population and Chronic Diseases: Increasing demand for treatments for age-related conditions.
  • Government Policies & Incentives: Regulations and R&D funding shaping innovation and market access.
  • Globalization and Outsourcing: Complex supply chains and reliance on external partners for specialized production.
Top Challenges
  • High R&D Costs and Risks: Significant investment with uncertain returns on drug development.
  • Stringent Regulatory Requirements: Lengthy approval processes and ensuring quality and safety standards.
  • Drug Pricing and Reimbursement: Pressures to balance affordability with incentives for innovation.

Pharmaceutical Manufacturing Market: US Continues to Rely Heavily on Foreign API Sources

The US Food and Drug Administration (FDA) initially highlighted concerns about the heavy US reliance on foreign active pharmaceutical ingredient (API) manufacturing in 2019. At that time, a significant 72% of API facilities supplying the US were overseas, and China accounted for 13% of these sources. While investment into the domestic API manufacturing sector has been a focus in recent years, reliance on foreign suppliers persists. To provide further insight into this situation, the USP (US Pharmacopeia) employed the Medicine Supply Map tool. This system uses machine learning and data from the FDA and other global regulatory agencies to map manufacturing locations for approximately 90% of active API Drug Master Files (DMFs) worldwide. This analysis provides a snapshot of the US reliance on foreign API sources as of the end of 2021.

The USP Medicine Supply Map analysis highlights that India currently accounts for 48% of active API DMFs in the US pharmaceutical manufacturing market, with China following at 13%, and the US trailing at only 10%. Examining trends over time reveals India’s dominance has grown significantly, contributing 62% of active API DMFs filed in 2021, compared to just 20% in 2000. In contrast, Europe’s contribution has fallen from 49% in 2000 to only 7% in 2021. While China’s contribution has increased, the US’s share of new API DMF filings remains low at 4% in both 2019 and 2021.

Pain Therapeutics are Leading the Pharmaceutical Manufacturing Market, Control Over 32.7% Market Revenue

Chronic pain is a widespread and debilitating health issue with far-reaching consequences. Globally, an estimated 1.5 billion individuals – a staggering one in five people – suffer from chronic pain, with prevalence increasing as people age. In the United States alone, roughly 50 million adults are affected, resulting in an annual cost to society of $560-$635 billion.  Studies indicate that over 30% of the Chinese population experiences chronic pain, and the issue is particularly pronounced in middle- and low-income countries, reaching up to 56% among the elderly.  Worldwide, the percentage of adults suffering from pain stands at 20%, with 10% receiving a new chronic pain diagnosis annually.

Leading causes of chronic pain include arthritis, nerve damage, and cancer pain. Conditions like low back pain, neck pain, and osteoarthritis are among the top contributors to years lived with disability (YLD) on a global scale. Osteoarthritis alone impacts 15% of the world’s population over 30, with projections estimating nearly 1 billion sufferers by 2050, adding more fuel to the demand for pain medicine in pharmaceutical manufacturing market. Opioids, while effective in some cases, carry a high risk of addiction.  In 2023, a quarter of a billion opioid prescriptions were written in the US.  Commonly prescribed pain medications include hydrocodone-acetaminophen (the most prescribed), ibuprofen, and tramadol.  Alongside medications, treatment often involves physical therapy and off-label use of antidepressants and anti-seizure drugs.

Chronic pain’s impact extends beyond the individual, contributing significantly to disability while disrupting lives through sleep problems, depression, and fatigue.  Disadvantaged socioeconomic groups often face the highest burden of pain while having limited access to effective treatment options. It’s essential to remember that medications carry risks – acetaminophen can cause liver damage, and NSAID overdoses, while often asymptomatic, can lead to complications.

Advanced Analytics: Driving Efficiency and Innovation in Pharma Manufacturing

Advanced analytics offer immense potential for pharmaceutical companies, with studies citing possible EBITDA improvements in the range of 15-30% within 5 years, and potentially reaching 45-70% over a decade. Companies in the pharmaceutical manufacturing market harnessing analytics for data-driven decision-making will gain a decisive competitive edge in the near future. In manufacturing, even small efficiency gains can lead to significant savings. Automation of OEE (Overall Equipment Effectiveness) tracking unlocks million-dollar opportunities, while visualization tools offer transparency and empower informed decision-making at all levels. Continuous monitoring and sensor analytics allow for real-time process optimization and early deviation detection. By analyzing machine settings, operator training, and raw materials with analytics, pharma companies can boost output quality and yield.

Beyond production, advanced analytics can accelerate drug discovery and personalize treatments. It has the potential to reduce both the cost and time-to-market for new medicines. Industry leaders like Moderna and AstraZeneca are already leveraging AI and analytics to elevate clinical trials and streamline manufacturing processes. As larger pharma companies in the pharmaceutical manufacturing market embrace these technologies, mid-tier and smaller manufacturers must adapt quickly to remain competitive. Hybrid or outsourced analytics models can accelerate adoption. AI-powered automation and predictive insights hold the key to transforming strategic decision-making, optimizing supply chains, and enhancing PKPD studies in the pharmaceutical industry.

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Generic Prescription Drugs Captures Over 61% Market Share: Market Booms as Branded Patents Expire

India plays a pivotal role in the global pharmaceutical manufacturing market, standing as the largest provider of generic medicines by volume and fulfilling a significant 40% of the US demand for generics. The country boasts a remarkable production capacity, manufacturing over 60,000 generic drugs across numerous therapeutic areas, with a thriving API market valued at $11.8 billion and projected to grow substantially. Generic medications are vital for reducing healthcare costs. After a branded drug’s patent expires, generics typically see a 60-70% price reduction. While this promotes affordability, price hikes due to a lack of competition remain a concern. However, with a large number of branded drug patents set to expire in the coming years, the generic drug market is positioned for significant expansion. The FDA’s approval of approximately 90 generic patents in 2023 (in the US alone) underscores increasing access to these cost-effective options.

North America, with its developed economies, leads in generic drug demand and will contribute significantly to the expected market growth. Meanwhile, the Asia Pacific region holds immense potential, with China forecast to emerge as the revenue leader within this sector. Cardiovascular drugs represent the largest share of the generic drug market, with other major therapeutic areas including CNS, infectious diseases, musculoskeletal, respiratory, and oncology. Simple generic drugs remain a substantial market segment in the overall landscape of the industry.

The impact of generic medications on healthcare spending across the global pharmaceutical manufacturing market is undeniable. In the US, generics comprise a staggering 90% of prescriptions while accounting for only 17.5% of drug costs. This translates to massive cost savings for patients, with copays for generics averaging far lower than brand-name equivalents. Over a decade, estimated generic savings in the US approach $2 trillion. The FDA maintains strict standards for generic drug approvals, with over 10,000 FDA-approved generics currently available. Rigorous testing ensures they contain the same active ingredient, strength, and dosage as their brand-name counterparts.

Global Pharmaceutical Manufacturing Market Key Players

  • Abbott Laboratories
  • AbbVie Inc.
  • ACADIA Pharma
  • Aenova Group
  • Amgen Inc
  • AstraZeneca plc
  • Bayer AG
  • Biogen Inc
  • Boehringer Ingelheim International GmbH
  • Eli Lilly and Company
  • F. Hoffmann-La Roche AGjapan
  • GSK plc
  • Merck KGaA
  • Novartis AG
  • Novo Nordisk A/S
  • Pfizer Inc
  • Sanofi SA
  • Other Prominent Players

Key Segmentation:

By Drug Type

  • Branded Prescription Drugs
  • Generic Prescription Drugs
  • Over-The Counter Drugs (OTC)

 By Formulation

  • Tablets
  • Capsules
  • Injectables
  • Sprays
  • Suspensions
  • Powder
  • Other Formulations

By Route of Administration

  • Oral Medicine
  • Topical Medicine
  • Parenteral Medicine
  • Inhalations
  • Other Routes of Administration

By Therapeutic Application

  • Cardiovascular Disease
  • Pain
  • Disease
  • Cancer
  • Respiratory Diseases
  • Neurological Diseases
  • Orthopedics
  • Other Therapeutic Application

 By Manufacturing Facility

  • In- House Facility
  • Outsourced facility

By Distribution Channel

  • Retail Channel
  • Non-retail
  • Online Channel

By Region

  • North America
  • Europe
  • Asia Pacific
  • Middle East & Africa (MEA)
  • South America

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About Astute Analytica

Astute Analytica is a global analytics and advisory company which has built a solid reputation in a short period, thanks to the tangible outcomes we have delivered to our clients. We pride ourselves in generating unparalleled, in depth and uncannily accurate estimates and projections for our very demanding clients spread across different verticals. We have a long list of satisfied and repeat clients from a wide spectrum including technology, healthcare, chemicals, semiconductors, FMCG, and many more. These happy customers come to us from all across the Globe. They are able to make well calibrated decisions and leverage highly lucrative opportunities while surmounting the fierce challenges all because we analyze for them the complex business environment, segment wise existing and emerging possibilities, technology formations, growth estimates, and even the strategic choices available. In short, a complete package. All this is possible because we have a highly qualified, competent, and experienced team of professionals comprising of business analysts, economists, consultants, and technology experts. In our list of priorities, you-our patron-come at the top. You can be sure of best cost-effective, value-added package from us, should you decide to engage with us.

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