Industry Overview
United States Active Pharmaceutical Ingredients (API) market is undergoing a dynamic phase, marked by high growth opportunities balanced with geopolitical and economic concerns. The U.S. API market stood at around $37.4 billion in 2024 and is anticipated to grow to $72.8 billion by 2035, at a 7.1% CAGR during the forecast period. The market is expected to see tremendous growth due to some key factors. The growing incidence of chronic diseases, such as cardiovascular diseases and cancer, fuels the demand for effective pharmaceuticals, hence boosting the demand for quality APIs. This is being complemented with a growing focus on new drug development and the use of innovative biopharmaceuticals.
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The other driver for growth is the transformation towards outsourcing API manufacturing. Most pharmaceutical firms find it convenient to outsource to contract manufacturing organizations (CMOs) to reduce costs and utilize specialized capabilities, which is mainly evident in the manufacturing of extremely potent APIs. Further, regulatory support for drug approvals and R&D investments drives the market. For instance, government investments and efforts in building the manufacturing capabilities, such as those by Millipore Sigma and Evonik, reflect the intent to improve API manufacturing capacities within the U.S.
Market Trends
Oncology Segment Anticipates Witnessing a High CAGR
The oncology segment is likely to see huge growth in the API market during the forecast period. This is due to numerous factors, including the growing incidence of various types of cancer, rising company activities in developing medicines such as biologics and biosimilars, and heightened awareness programs in the nation.
According to the American Cancer Society, anticipated diagnosis of more than 2 million new cancer cases are expected to be diagnosed in the United States in 2025. A total of 316,950 new invasive breast cancers and 59,080 new non-invasive (in situ) breast cancers were anticipated to be diagnosed in the United States in 2025. The increasing cancer case burden, cancer drugs are in greater demand, for which API is required for formulation. Therefore, the market is anticipating a strong influence during the forecast period.
Branded segment likely to possess the major share of the market
The branded segment will expand during the forecast period due to reasons such as the high prevalence of chronic diseases, rising awareness about branded drugs among the populace, as well as rising company activities in the development of drugs within the country. For instance, according to Parkinson’s Foundation, nearly 1.1 million individuals were living with Parkinson’s disease in the United States currently, and the same is expected to grow up to 1.2 million by the year 2030. Therefore, the high incidence of cardiovascular and Parkinson’s disease in the population is likely to increase the demand for effective drugs, which need APIs for drug development. This is projected to increase segment growth during the forecast period.
Production & Supply Volume
Domestic Production: The U.S. has expanded its domestic API manufacturing capacity, seeking to supply a major percentage of its pharmaceutical requirements internally.
International Production Capacity: In spite of growth, the U.S. continues to represent a smaller percentage of global API manufacturing, with countries such as China and India leading in volume.
Major Manufacturers: Firms such as Pfizer Inc., Merck & Co., Inc., and Eli Lilly and Company are increasing their U.S. manufacturing facilities to increase supply resiliency.
Production Process and Technological Developments
Continuous Manufacturing: Implementation of constant processes improves efficiency and decreases production time.
Process Analytical Technology (PAT): Real-time monitoring guarantees consistent quality and regulatory compliance.
Green Chemistry: Focus on environmentally sustainable processes minimizes waste and energy usage.
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Trade Analysis (Import & Export)
Key Exporting Nations: India and China continue to be major exporters of APIs to the U.S., although recent tariffs have affected volumes of trade.
Trade Volume and Value Statistics: In March 2025, the U.S. trade deficit hit an all-time high of $140.5 billion, partially due to increased imports ahead of tariff implementations.
Impact of Trade Regulations & Policies: Latest tariffs and trade policies have resulted in supply chain adjustments, with companies looking for alternative sources and investing in local production to minimize exposure to international trade risks.
Top U.S. Active Pharmaceutical Ingredient Companies
Source: OMR Global
Recent Developments
- In February 2025, Eli Lilly and Company announced plans to construct four new U.S. manufacturing facilities, three of which will be dedicated to API production, with total U.S. capital expansion commitments exceeding $50 billion since 2020.
- In October 2024, Pfizer partnered with the Ignition AI Accelerator to improve drug discovery and production processes through the use of artificial intelligence. This partnership is designed to boost the advancement of new treatments and increase operational efficiency within Pfizer’s R&D processes.
- In May 2024, Eli Lilly and Company raised investment to $9 billion at its Indiana facility to improve API production of Tirzepatide and other pipeline drugs. This expansion will improve Lilly’s capacity to manufacture API for Zepbound (tirzepatide) injection and Mounjaro (tirzepatide) injection so that many adults with chronic conditions such as obesity and type 2 diabetes can benefit from these valuable therapies.