Pharmaceutical Chemicals Market To Attain Revenue USD 205.6 Bn By 2032

Published Date : 28 Nov 2023

The global pharmaceutical chemicals market size reached USD 108 billion in 2022 and is projected to hit USD 205.6 billion by 2032, growing at a CAGR of 6.7% from 2023 to 2032.

Pharmaceutical Chemicals Market Size and Growth Rate 2023 To 2032

Chemicals are widely utilized in the manufacture of products including vaccines, medicines, infant milk formulations, ointments, and others. Several types of chemicals are used in the pharmaceutical sector such as acetone, acetic anhydride, hydrochloric acid, diethyl ether, benzyl chloride, and others. These can be used as active ingredients, solvents, or reagents. The continuous demand for pharmaceuticals is expected to drive the healthcare industry forward. Chemicals used in active pharmaceutical ingredients. Active Pharmaceutical Ingredients (APIs) must follow stringent regulations, safety, and performance expectations to achieve optimal efficacy. 

Specific types of chemicals are also used as preservatives and packaging materials for drugs such as water-soluble capsules. APIs are the active components in a pharmaceutical drug that produce the required effect and are responsible for treating a condition. Active pharmaceutical ingredients are medical substances that are responsible for the treatment of a condition. Active pharmaceutical ingredients are generally produced by processing chemical compounds. APIs are gaining momentum in the market due to the increasing prevalence of chronic diseases, including diabetes, asthma, cancer, heart diseases, and other infectious diseases. The pharmaceutical company follows stringent safety measures while producing drugs using chemicals.

Growth Factors

The global pharmaceutical chemicals market is driven by several factors including supportive government initiatives, rapid growth of the pharmaceutical sector, increasing investment in the healthcare sector, rising demand for advanced drugs, and increasing demand for effective treatment. Additionally, the increasing prevalence of chronic diseases such as cardiovascular diseases, stroke, cancer, diabetes, gastrointestinal diseases, musculoskeletal diseases, respiratory diseases, and other infectious diseases. Furthermore, the rising manufacturing of APIs in emerging markets toward favoring health concerns is expected to fuel the market’s expansion.

  • In September 2023, Gharda Chemicals announced the investment plan of Rs 600 Cr to set up a new facility in Gujarat for API production. The new chemical manufacturing facility will specialize in the production of Active Pharmaceutical Ingredients and agrochemicals-based formulations, which would strengthen the company’s commitment to delivering high-quality chemical products. 

Regional Insights

North America is expected to hold the largest market share of the market owing to the presence of sophisticated healthcare infrastructure, an increasing number of pharmaceutical companies, emerging applications of pharmaceutical chemicals, rising advancement in drug discovery & development, and increasing incidence of chronic diseases such as cardiovascular, neurological, gastrointestinal, cancer, metabolic disorders, diabetes, musculoskeletal diseases, and others. 

The United States is the largest contributor to the market in the region. Due to the increasing investment in the development of new pharmaceutical drugs, rising demand for personalized medications, and increasing prevalence of cancer. 

For instance, according to the American Cancer Society estimates the number of new cancer cases and deaths in the United States every year, 1,918,030 new cancer cases and 609,360 cancer deaths are expected to occur in the United States in 2022. In addition, as per the Centers for Disease Control and Prevention, 6 in 10 adults in the US have a chronic disease and 4 in 10 adults in the US have two or more chronic diseases. 

Furthermore, API production is highly sophisticated and APIs are of utmost importance in the pharmaceuticals sector. The researchers found that most API manufacturing for the US market is the other countries outside the US. The majority of large-scale manufacturing facilities are in India and China. According to secondary sources, the United States imports 75 to 80 percent of APIs from China and India. Only 14% of APIs are manufactured in the United States. Thus, this is expected to propel the pharmaceutical chemicals market growth in the region during the forecast period.

Pharmaceutical Chemicals Market Scope

Report Highlights Details
Market Size in 2023 USD 114.7 Billion
Market Size by 2032 USD 205.6 Billion
Growth Rate from 2023 to 2032 CAGR of 6.7%
Largest Market North America
Base Year 2022
Forecast Period 2023 to 2032
Regions Covered North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa

Market Dynamics

Drivers

Increasing investment in API production

The increasing demand for APIs for various therapeutic applications and APIs has major significance in drug manufacturing. The increasing investment in API production is anticipated to propel the market’s growth. For instance, In June 2023, Novo Nordisk announced an investment worth $2.3 billion to boost its manufacture of active pharmaceutical ingredients for its "future clinical late-phase product portfolio" at its site in Hillerod, Denmark. The company is constructing a new 700,000-square-foot facility at its complex in Hillerod, which is expected to produce APIs by 2029.

Increasing prevalence of chronic diseases

The rapid rise in the cases of chronic diseases is expected to drive the growth of the pharmaceutical chemicals market during the forecast period. Pharmaceutical chemicals play a crucial role in the manufacturing of innovative drugs for the treatment of various chronic diseases including heart disease, diabetes, neurological disorders, respiratory diseases, and cancer. For instance, according to the European Commission’s estimates published in the European Cancer Information System (ECIS), New cancer cases rose by 2.3 percent in comparison with 2020, to reach 2.74 million in 2022. Similarly, cancer deaths also rose by 2.4 percent compared to 2020. Cancer affects men more than women, it has witnessed 53 percent of new cancer cases, and in which 55 percent of cancer deaths occur in men. Therefore, with increasing cases of cancer, the demand for pharmaceutical chemicals increases for the treatment of various types of cancers and is anticipated to fuel the growth of the market in the coming years.

Restraint

High cost

During the projected period, the pharmaceutical chemicals market’s expansion is anticipated to be constrained by the high cost of healthcare facilities. The middle- and lower-income families are discouraged to spend on advanced pharmaceuticals drugs due to the budget constrained. Thus, this is expected to hamper the market growth over the forecast period.   

Opportunities

Rising healthcare expenditure and ongoing research & development activities

The rise in healthcare expenditure coupled with Government support for research and development activities is projected to create significant opportunities for the market’s growth during the forecast period. For instance, according to the Commonwealth Fund report published in January 2023, the United States spends roughly 18 percent of GDP on health care. The U.S. spends 3 to 4 times more on health care than South Korea, New Zealand, and Japan. Thus, the increasing healthcare investments are expected to drive market growth during the forecast period. Moreover, the key players operating in the market are also constantly increasing healthcare expenditures in order to gain a competitive edge in the global market.

Partnership among key players

Collaborations or partnerships adopted by key players as effective business strategies are expected to fuel the expansion of the pharmaceutical chemicals market. Partnerships facilitate shared efforts toward sustainability. Pharmaceutical and chemical companies can collaborate on eco-friendly manufacturing processes, waste reduction, and environmentally conscious practices, contributing to the overall sustainability of the pharmaceutical chemicals industry.

Recent Developments

  • In August 2023, Calyx Chemicals and Pharmaceuticals expressed its interest in investing in the pharmaceutical sector at Kilinto Industrial Park. The company supplies ingredients to the world’s largest drug manufacturers. Calyx Chemicals and Pharmaceuticals produces 60% of the world’s ingredients used for malaria and tuberculosis drug production. 
  • In October 2023, Haldia Petrochemicals Ltd announced its plans to invest rupees $360m to set up a new phenol/acetone plant in West Bengal. The facility will have the capacity to produce 300,000 tonnes per year of phenol and 185,000 tonnes per year of acetone, which is estimated to be completed by the first quarter of calendar year 2026.

Pharmaceutical Chemicals Market Players

  • BASF
  • Lonza
  • Porton Fine Chemicals
  • Dishman
  • Lanxess
  • Johnson Matthey
  • Vertellus Holdings
  • Jubilant Life Sciences
  • Hikal
  • Abbott

Major Market Segments Covered:

By Product

  • Basic building blocks
  • Advanced intermediates
  • Active ingredients

By Application

  • Cardiovascular
  • Neurology
  • Oncology
  • Infectious diseases
  • Metabolic system
  • Diabetes
  • Respiratory diseases
  • Gastrointestinal diseases
  • Musculoskeletal diseases
  • Other

By Geography

  • North America
  • Europe
  • Asia-Pacific
  • Latin America
  • Middle East and Africa

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