Demanding excipients: forecasts from the Freedonia Group suggest that the demand for excipients will increase steadily during the next few years.

US demand for excipients is likely to advance 4.5 per cent annually to $2.9 billion in 2011 (Table I) but the gains will lag behind increases in pharmaceutical shipments because virtually all excipients are commodity substances with limited pricing flexibility. Growth opportunities will extend to a broad range of compounds and applications, and based on advances in material quality and processing safety, gelatin will remain the leading compound for drug encapsulation, warding off challenges from more expensive cellulosic ethers and carrageenan derivatives. However, due to the breadth of existing and potential applications in drug formulations and delivery systems, cellulose derivatives will eventually evolve into the top-selling group of pharmaceutical excipients, with these compounds commanding especially strong growth opportunities as fillers, controlled release agents and enteric coatings.

Ongoing efforts to improve the bioavailability and safety of parenteral and inhalation drugs will boost demand for specialty polymer excipients, especially compounds with sustained-release and targeting properties. In addition, multifunctional synthetic polymers, such as povidone and methacrylates, will broaden applications in high value-added oral medicines, including disintegrating tablets and sustained-release drug delivery systems. Through 2011, minerals will command the fastest growth among major groups of pharmaceutical excipients based on a favourable mix of cost and performance properties. Calcium phosphate and calcium carbonate as tablet fillers, titanium dioxide as a tablet-coating ingredient, and petrolatum and mineral oils in topical drug suspensions will fare particularly well in the marketplace.

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Cost and Quality

Cost and quality advantages will extend market opportunities for starch-based pharmaceutical excipients, with pregelatinized starch fillers and binders and sodium starch glycolate disintegrants realizing the best sales growth. Based on ease of processing advantages and good compacting and compression properties, lactose will retain widespread usage as a tablet filler and diluent. Sorbitol and mannitol will see the strongest demand growth among polyol excipients, the former from uses as a liquid drug diluent, the latter from applications as a diluent in parenteral preparations.

Among other pharmaceutical excipients, sterile water, surfactants and FD&C (Food, Drug and Cosmetic) colours will amass the largest sales. Demand for sterile water will increase with upward trends in the development and production of parenteral drugs, especially recombinant DNA and monoclonal antibody preparations. Efforts to reduce drug-dispensing errors and strengthen drug anticounterfeiting safeguards will prompt pharmaceutical manufacturers to expand the use of FD&C colours as well as specialty ink excipients.

Based on demand value, fillers/ diluents will remain the leading application served by excipients, functioning as inert ingredients that improve the bioavailability of oral and parenteral drug formulations. Capsule manufacturing and tablet and capsule binding will also continue to post high demand given the large percentage of medication produced in solid oral dosage formats. Among all applications, drug delivery will realize the fastest sales growth as pharmaceutical manufacturers seek to offset the impact of intensifying generic competition through the introduction of new sustained-release and orally disintegrating versions of existing medicines.

Due to the broad range of compounds available, approximately 250 producers and distributors compete in the pharmaceutical excipients field. Combined, the ten largest producers--Dow Excipients, BASF Pharma Solutions, Aqualon (Hercules), Cargill Pharmaceutical Excipients, Colorcon (Berwind), National Starch and Chemical (Imperial Chemical Industries), GELITA, Croda International, International Specialty Products and Mallinckrodt Baker (Covidien)--recorded more than half of total US sales in 2006. The remainder of the market is served primarily by small-to-medium-sized companies, most of which compete in one or two product lines.

The full report can be obtained from:

The Freedonia Group, Inc.

767 Beta Drive Cleveland

OH 44143-2326 USA

www.freedoniagroup.com

T 800 927 5900 (US)

T [phone]

F [phone]

E [e-mail]

Table I: Excipient demand by type (million dollars)

                                                      % Annual Growth

Item                  2001    2006    2011    2016     06/07    11/12

Excipient Demand      1800    2290    2860    3500       4.9      4.5
Gelatin                367     450     547     635       4.2      4.0
Cellulose              309     407     515     645       5.7      4.8
Synthetic Polymers     214     279     350     433       5.4      4.6
Minerals               150     197     252     321       5.6      5.0
Starch                 148     181     216     253       4.1      3.6
Sugars                 138     168     203     241       4.0      3.9
Polyols                 84     106     132     162       4.8      4.5
Other                  390     502     645     810       5.2      5.1

Source: The Freedonia Group, Inc.