Pharmaceutical excipients, a broad array of substances blended with active ingredients into desired finished dosage forms, have, in recent years, made significant gains in quantities used and revenue captured. The pharmaceutical industry has gradually recognized excipients are able to aid active pharmaceutical ingredients achieve better functionality and competitive advantage. The revolution from viewing excipients as inert agents to treating them as functional active components has infused vigorous energy into this industry. Meanwhile, the global pharmaceutical excipients market, valued at $6.1 billion in 2014, is projected to reach $8.4 billion by 2019 at a 5-year compound annual growth rate (CAGR) of 6.7% from 2014 to 2019 as estimated by Markets and Markets (2015).
The pharmaceutical excipients industry is driven by multifaceted demands. At the macro level, the rising global demand for pharmaceuticals has fueled the growth of drug production and thus excipient consumption. Within the pharmaceutical industry, the reduced R&D productivity, downward price pressure, and stringent regulation have forced drug makers to increasingly turn to excipients with the intent to develop value-adding and differentiated products at low cost without compromising quality. One example of enhanced micro level demand is the blooming of extended-release formulation, which is made possible through proper excipient application.
In 2014, Nice Insight conducted its first industry-wide study of pharmaceutical excipients to gain insights into the demand trends for various excipients (21 categories). In this study, Nice collected a broad spectrum of data from both pharmaceutical buyers (n=412) and excipient sellers/manufacturers (n=189). One focus was on information regarding respondent behavior in conducting excipient procurement and manufacture/sales. All of the survey respondents (n=601) work for a wide range of pharmaceutical and/or biotechnology companies. The majority of respondents were from Big Pharma (21 percent), Biotechnology/Biologics companies (25 percent), and Emerging, Niche or Start-ups (23 percent). Excipients manufacturers alone (n=189) exhibit a slightly different company composition pattern, in which a higher proportion of respondents (30 percent) work for Biotechnology/Biologics companies while the fraction for Big Pharma (19 percent) and Emerging, Niche or Start-ups (20 percent) are smaller. In addition, 71 percent of 586 respondents indicate that their companies’ product portfolio includes both branded and generic drugs. The rest is split between branded (15 percent) and generic drugs (14 percent).
An interesting point to note is that most of the excipient manufacturers are pharmaceutical makers as well. Their ability to produce excipients internally can be a great advantage enabling them to conduct inhouse formulation and production with less dependency on outside suppliers. At the same time, they have much more control over the safety and quality on excipients. Nevertheless, a pharmaceutical product contains a variety of excipients. Despite internal excipient production capability, a single pharmaceutical company is unlikely to be able to produce all of the excipients required for their entire product portfolio.
On the buyers’ side, 21 categories of excipients exhibit different levels of relevance to their pharmaceutical product formulations from as low as 19 percent (Glidants) up to 60 percent (Coatings). The top 5 most relevant categories of excipients are Coatings, Acids (57 percent), Solvents (51 percent), Binders (51 percent), and Emulsifiers (49 percent). Coatings and binders are commonly used in oral solid dosage forms (OSDF) (ie, tablets and capsules) while solvents, emulsifiers, and buffers are prevalent in topical products. Acids can be use in both oral and topical formulations. Accordingly, the 2 leading business-relevant finished dosage forms for buyers’ business are Oral (pills, tablets, capsules, specialty tablets such as orally-disintegrating) (84 percent) and Topical (cream, gel, eye drops, skin patch) (63 percent). Moreover, the data demonstrate that a wide range of excipients are used in producing various dosage forms of pharmaceuticals. Each company requires a unique set of excipients to fulfill its formulation and manufacture demands.
To further investigate the relevance of various excipients to buyers’ business, Nice Insight asked respondents in each category to specify the weight purchased in proportion to their total excipients procurement. For each category of excipients, 77 to 91 percent of the respondents claimed that their relative weight of purchase was within the range of 1 to 60 percent of gross excipients acquired. There are fewer (9 to 23 percent) respondents who stated that their purchase for a single category exceeded the relative weight of 61 percent. The most common excipient categories purchased at or above this level are Solvents (23 percent), Lubricants (22 percent), and Humectants (21 percent). All of these 3 types of excipients can be used for topical preparations. Additionally, lubricants are often used in oral formulations and solvents are also used in parenteral preparations.
On the sellers’ side, each category of excipient was manufactured by a different fraction of respondents, ranging from 15 to 40 percent of respondents per category. The 6 excipient categories that had the highest number of manufacturers are: Flavors (40 percent), Colors (39 percent), Coatings (38 percent), Acids (35 percent), Lubricants (35 percent), and Solvents (34 percent). All of them can be used for oral preparations. In contrast, the 6 categories of excipients with fewest number of manufacturers are: Glidants (15 percent), Humectants (16 percent), Surfactants (16 percent), Sorbents (19 percent), Anti-adherants (21 percent), and Disintegrants (21 percent). Fewer suppliers in these areas may indicate less intense competition, rendering sellers more leverage when negotiating with buyers. On the other hand, it may indicate a less profitable market that is less appealing to other suppliers.
With respect to the sales (by weight), on average, each category of excipient accounts for about 44 to 57 percent of total weight sold in each respondent’s business. The 5 categories of excipients with highest average relative weight value are: Fillers/Diluents (57 percent), Lubricants (55 percent), Colors (54.8 percent), Preservatives (54 percent), and Coatings (53.6 percent). Once again, each of these excipients can be used in oral dosage forms. Preservatives are also widely used in parenteral formulations. Based on the survey, it is apparent that excipient manufacturers have different skill sets in producing various excipients, though their capacity tends to overlap with each other around the excipient categories for oral formulations, especially OSDFs.
Besides exploring the excipient buyers’ current purchasing trends, Nice Insight also inquired as to their current projection in excipient demand for next year (2015). In each category of excipient, the predominant prediction for usage is “About the Same” (+/- 1 to 3 percent change) with the votes ranging from 46 to 64 percent of the respondents. Comparing the number of respondents who are expecting shrinkage (4 percent or greater) to those expecting growth (4 percent or greater), more respondents are expecting an increase in demand for each category except acids. For example, 37 percent of the respondents predict growth in Sorbents usage and 13 percent expect to use less. As for acids, the number of respondents was the same for growth and shrinkage. Since pharmaceutical companies constantly adjust their excipient demands according to their production needs, business strategy, and marketing environments, it is not surprising to see fluctuations in their demands. A mild decline in excipient demand from a few drug makers may not make a significant impact on the entire market. After all, more respondents expressed positive view on their excipient demands. Overall, the demand for all of the categories of excipients surveyed will likely experience a moderate increase in 2015.
The survey results also revealed a strong connection between excipients used for oral formulations and their importance to business. This trend is more evident on the sellers’ side as the top 5 categories of the most manufactured excipients are all involved in oral formulations. Among buyers, oral dosage forms are not only the leading (largest category) finished dosage forms, but also receive the most “Very Important” classifications (84 percent of the respondents rated the Oral dosage forms “Very Important”). Due in part to the ease of administration and affordable price, the demand for oral pharmaceuticals, especially OSDFs, is growing robustly. This increased demand, in turn, stimulates the consumption of OSDF excipients. According to Kline & Company, the market for OSDF excipients is expected to grow at 7.4 percent per year until 2018. Among OSDF excipients, those that contribute to instant-release, controlled-release (ie, delayed- or sustained-release), and improved absorptions are most likely to harvest larger gains.
Another rising demand is for excipients used in parenteral preparations, which is mainly driven by the expansion of the biological therapeutics. The biologics markets is growing at a CAGR of 30 percent since 2008 (Visiongain, 2014) and is projected to gain about 20 percent of the global pharmaceutical market share by 2017 (IMS Health, 2013). As a result, increased biologics/parenteral output will boost the growth of parenteral excipients such as solvents, suspending agents, surfactants, and preservatives. In the survey, parenteral preparations are less widely manufactured than oral and topical forms. Only 35 percent of the respondents’ business involved with this type of finished dosage form. It is foreseeable, however, that more biologics will be approved in the coming years and more companies will plunge into this sector.
One more trend in the global excipients market is the increasing importance of the emerging markets. In this study, the respondents are predominantly from North American or European companies (97 percent). However, stronger growth is expected in the emerging markets, led by India and China in Asia-Pacific region. It should be recognized that there is a significant demand difference comparing developed economies against emerging markets. High-quality and functional excipients are preferred in developed markets while emerging markets tend to utilize cheaper alternatives.
Undoubtedly, the global pharmaceutical excipient market will continue to grow in the near future and the growth pattern will vary among different categories of excipients. The excipient industry will evolve closely along with the progress of the pharmaceutical industry as new active pharmaceutical ingredients are developed and novel technologies are adopted (ie, novel drug delivery system). Following this trend, more innovative, multifunctional excipients, or specialty blends can be expected to arrive at the market in the upcoming years.
References
- 2015 Excipients Survey, Nice Insight, January 2015 http://www.niceinsight.com
- NEXT-GENERATION BIOLOGICS R&D, INDUSTRY AND MARKET 2014-2024, Visiongain, February 2014https://www.visiongain.com/Report/1235/Next-Generation-Biologics-RD-Industry-and-Market-2014-2024
If you want to learn more about the report or about how to participate, please contact Guy Tiene guy@thatsnice.com orNigelWalkernigel@thatsnice.com
