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| The European Active Pharmaceutical Ingredients Market and Outsourcing Trends |
| Date：2014-1-22 Hits：2031 From：顶点医药化工集团 |
Manufacturers Struggle to Differentiate their Capabilities
The large number of manufacturers crowding the fragmented European active pharmaceutical ingredients (API) market is creating a distinct lack of capability differentiation. Most participants have similar production capabilities and technology portfolios, and follow equally efficient chemical processes. Given that they use common multi-purpose kits to cater to numerous and varied customer requests, there is little scope for differentiation in terms of service. Manufacturers thus have to concentrate on building strong relationship with pharmaceutical customers in order to secure steady business from them. Additionally, enhancing their production capabilities and improving service portfolios will help them achieve sustainable competitive advantage.
This research provides a comprehensive analysis of the European API market, segmented on the basis of types of customer and therapeutic categories. It analyses the revenue potential for each segment, outlining the dynamics in terms of market drivers and restraints and industry challenges. The research also provides strategic recommendations and analyses the existing competitive structure of the market.
Supplier Base Suffering from Overcapacity and Diminishing Profitability
Overcapacity is another significant problem affecting the supplier base. Outsourcing of API manufacturing has reduced considerably due to a paucity of new drugs and the unexpected high-profile failures of several late-stage drugs. This has caused overcapacity in the market as many current Good Manufacturing Practice (cGMP) manufacturers had made huge investments in anticipation of strong growth in the custom manufacturing business.
Faced with scant differentiation and considerable overcapacity, suppliers are evaluating new growth opportunities in niche segments and in biopharmaceuticals. With greater focus on R&D, the industry can look forward to the introduction of new products that are of better quality, cheaper and more suited to customer requirements, observes the analyst of this research. Small suppliers that have good technological capabilities are expected to benefit from niche market applications such as those for high potency APIs.
Manufacturers Face Increasing Competition from Low-cost Asian Competitors
Frost & Sullivan believes that European API manufacturers are facing their biggest challenge from low-cost manufacturers in Asia, with countries such as India and China having a high impact on global API manufacturing outsourcing trends, says the analyst. This challenge is likely to affect the market over the next three to four years. Continuous price reductions of active ingredients and other basic chemicals as well as the significantly lower production costs in Asia are posing a strong threat to companies in Europe.
While current capabilities allow Asian manufacturers to target only the generic sector, they are expected to be able to win over pharmaceutical customers in the western world as they develop manufacturing capacity. This trend is at present being seen in large pharmaceutical companies sourcing an increasing number of advanced intermediates from Asia.
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