Outsourcing in Asia to Shrink Japan's Revenue Share

Monday 19 November 2012, Amsterdam

Pharma’s interest in outsourcing, combined with rising industrialization in India and China, will mark a drop in Japan’s share of the continent’s revenue, says a new report from pharmaceutical industry experts.

The latest report predicts Japan’s Active Pharmaceutical Ingredients (API) Asia-Pacific revenue share to drop from a dominant 51% in 2011 to 34% by 2017, while less economically mature markets across the region expand their own.

Japan’s API market revenue grew from $9.9 bn in 2006 to $15.6 bn last year, but analysis expect this growth to slow substantially in the future, reaching $17.2 bn in 2017, at a modest Compound Annual Growth Rate (CAGR) of just 1.7% from 2011.

By comparison, China’s API market revenue will increase from the $6.6 bn posted last year to $17 bn by the end of 2017, representing a CAGR of 17.2% during the same time period. Similarly, the API industry in India is expected to expand in value, from $2 bn in 2011 to $5.2 bn in 2017, at a CAGR of 17.4%.

A major contributor to this disparity in growth is the growing popularity of outsourcing pharmaceutical processes to Contract Manufacturing Organizations (CMO) in developing countries where skilled workforces are readily available and labor costs can be as much as 12 times lower.

The CMO market for the Asia-Pacific region is expected to jump in value in the near future. From combined revenues of $6.6 bn last year, GBI Research forecasts the sector to reach $16.5 bn by just 2017 at a healthy CAGR of 16.4%.

This report presents detailed analysis and forecasts of the major economic and market trends affecting the API markets in the Asia-Pacific region.

This report was built using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by a team of industry experts.