Pharmaceutical
Intermediates Market: Driving Growth in the Global Drug Development Industry

The growing demand for generic drugs from both
developed and developing countries has significantly boosted the market for
medicinal intermediates over the past decade. Generic drugs are able to
penetrate the market once patents expire on originator drugs, lowering
healthcare costs substantially. As many blockbuster drugs are expected to go
off-patent in the coming years, their generic versions will drive the need for medicinal
intermediates that serve as the building blocks in drug manufacturing.



India and China Dominate Global Supply
of Pharmaceutical Intermediates Market



India and China have emerged as the dominant producers and exporters of Pharmaceutical
Intermediates Market worldwide. Factors such as a large talent pool of
skilled chemistry professionals, low manufacturing costs, and a supportive
regulatory environment have helped the pharmaceutical industries in these
nations compete effectively in the global market. Indian companies alone
accounted for nearly 30% of global pharmaceutical exports, valued at $20
billion, in 2020. With well-established production facilities and process
knowledge, Indian and Chinese firms now routinely supply medicinal
intermediates to drug makers across Europe, North America, and other markets.
Their robust supply chains have enabled consistent supply continuity even
during the COVID-19 pandemic.



Rising Environmental Regulation Pushes
Intermediate Production Towards Green Chemistry



stringent environmental norms by regulatory agencies in both developed and
emerging markets are nudging pharmaceutical companies to adopt more sustainable
production practices. There is a growing emphasis on developing green chemistry
techniques and 'eco-friendly' synthetic routes that minimize waste and
eliminate hazardous reactants in manufacturing intermediates. For example, many
suppliers are replacing petrochemical feedstocks with bio-based raw materials
and shifting to novel catalytic systems that require less solvent and energy.
Water treatment technology is also being upgraded to achieve zero liquid
discharge objectives. These initiatives aim to make intermediate manufacturing
more cost-competitive over the long term while meeting stringent regulations on
environment, health, and safety.



Key Intermediates in High Demand for
Antiviral, Antidiabetic, and Cardiovascular Drug Markets



Certain classes of medicinal intermediates are witnessing higher growth than others based
on the therapy areas driving global drug markets. Intermediates for antiviral
drugs saw elevated demand during the COVID-19 pandemic and are likely to remain
in high demand for new infections. The prominent antiviral intermediates
include ribavirin, acyclovir, ganciclovir, oseltamivir, etc. For the large and
increasing population suffering from diabetes, the demand for antidiabetic drug
intermediates such as glimepiride, sitagliptin, vildagliptin, and pioglitazone
remains robust. Cardiovascular drug intermediates for treating hypertension,
heart disease, and chronic blood pressure are also core segments given the
growing prevalence of these conditions worldwide. The key players make
significant investments in expanding capacities for high-growth intermediate
categories.



Outsourcing and Contract Manufacturing
Models Drive Pharmaceutical Intermediate Industry



Over the past two decades, pharmaceutical companies have increasingly relied on
outsourcing models and third-party contract manufacturers for their active
pharmaceutical ingredient (API) and intermediate requirements. This trend
allows core pharmaceutical businesses to focus on drug discovery, clinical
research and marketing while tapping global supply chain expertise. Using
contract manufacturers located in emerging markets also helps bring down
production costs substantially. India has established itself as the preferred
outsourcing hub and many foreign drug firms now outsource over 80% of their intermediate
needs to reliable Indian suppliers through long-term partnerships. These
manufacturing contracts are a major factor fuelling global medicinal
intermediates demand across regions.



Stiff Competition and Pricing Pressures
Remain a Challenge for Suppliers



The Medicinal Intermediates has grown highly price-competitive in recent times
with the large-scale entry of generic drug suppliers from India, China and
other low-cost Asian countries. Rising commoditization of older drug molecules
adds to the pricing woes. However, leading intermediates players with strong
integrated capabilities continue to invest in developing technology-intensive,
value-added processes and complex synthetic routes involving difficult
chemistry. This helps them sustain premium pricing and command a greater market
share. Supply chain integration through backward linkages also enhances
bargaining power with customers. Nevertheless, with entry barriers low for many
simple intermediates, product substitution remains a threat for suppliers.



The global Medicinal Intermediates is projected to sustain healthy growth due
to increasing accessibility of generic drugs worldwide. Key demand drivers will
include patent expiries of blockbuster drugs, rising prevalence of chronic
ailments, and growing reliance on contract manufacturing models. However, price
pressures and regulatory strictness may compel manufacturers to adopt green
chemistry techniques for long term competitiveness. Companies developing complex
intermediates through innovative processes are better positioned to tap
opportunities across geographies. Asian nations, especially India and China,
will probably consolidate their leadership in this integral segment of the
global pharmaceutical supply chain.

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About
Author-

Alice Mutum is a seasoned senior content editor at Coherent
Market Insights, leveraging extensive expertise gained from her previous role
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