Empty Capsules

Global Market Outlook on Empty Capsules

• Global empty capsules market was estimated at $2.7 billion in 2021 and is estimated to grow at a CAGR of 7–8 percent until 2026.

• Upsurge in FDA approvals for personalized medicines and nutrition for the treatment of rare and chronic diseases is promoting, Surging demand from nutraceutical industry and rising consumption of capsules in clinical trials are the factors driving the market for empty capsules.

• High Market Maturity Regions: US, Europe

• Medium Market Maturity Regions: India, China and Brazil

• Low Market Maturity Regions: Africa and Middle East

Global Empty Capsules Market: Drivers and Constraints

Drivers

• Gelatin capsules remain the most preferred material to fill formulations for pharmaceutical and nutraceutical companies, however, rising concern for plant-based capsules is further expected to fuel the market

• Rising prevalence of infectious and chronic diseases has increased the consumption of antibiotics and antibacterial drugs, which had the largest share in the empty capsules market.

• Gelatin capsules offer higher stability and inertness to the drug material thus 70 percent of the empty capsule consumed are made of gelatin

• Higher consumption of dietary supplements is an important driver of the empty capsule market

• Vegetarian capsules made of HPMC have developed due to the increasing consumers awareness on the raw material source of gelatin-based capsules

Constraints

• The capsule manufacturers across the globe rely majorly on gelatin as a raw material, which is derived out of pig and cow skin and bones, the animal nature of the raw material continues to be a controversial aspect for the capsules

• The gelatin industry is also influenced by price fluctuations caused due to supply crunch and higher demand of gelatin from other industries

• Religious sanctions and consumer preference for vegetarian source for making empty capsule is also hindering growth of gelatin based capsule market

• Deteriorating standard of capsules, purity, and reliability is leading to increasing customer dissatisfaction. This can be attributed to technical issues during manufacturing of empty capsules such as improper drying of capsules, which often leads to color spotting.

Global Demand by Application : Empty Capsules

• Growth in new technologies and advancements in capsule delivery technologies are some of the major factors driving the growth in the empty capsules market. There is also increasing awareness of capsule formulations among geriatric population and increased R&D activities and clinical trials that drive the market growth.

Drivers of Demand by Application

• Pharma: Health conditions associated with aging population is a key driver for drugs being launched in capsules as it becomes more easier and convinient to use the prescribed therapy. Also, pharma companies partner with capsule manufacturers to use empty capsules in clinical trials as the process requires to provide specific dosage of drug molecule to subjects

• Nutraceuticals: Soft gelatin and HPMC capsules are widely used in dietary supplements. Soft gelatin capsules are used to deliver health friendly molecules of Omega 3 fatty acid and fish oil

• Cosmetics: Edible beauty products with specific appilcations, such as moisture retention on the skin have been launched by cosmetic companies in capsules

Industry Best Practices : Empty Capsules

• Pharma companies both global and regional adopt dual sourcing strategy at global as well as regional markets. Big pharma companies also engage with global capsule manufacturers to develop product specific capsule manufacturing and filling technologies.

Big Pharma Engagement with Global Capsule Manufacturer

• Big pharma companies have long term commercialization partnerships for development of customized empty capsule products and associated technologies with global capsule manufacturers

• For regional or country specific launch of their products the pharma companies source capsule Manufacturer’s proprietary products. Ex. GSK partnered with Lonza to source Licaps empty capsules to launch its therapy for urinary conditions in Germany

Big Pharma/Domestic Pharma Engagement with Regional Capsule Manufacturer

• Big pharma as well as domestic pharma companies partner with domestic capsule manufacturers as well as market leaders with regional presence. The partnership is for products to be launched for domestic market. Ex: GSK partnering with Natural Capsules in India

• Although global market leaders, such as Lonza have manufacturing facilities across the globe, the domestic manufacturers, such as SuHeung in Korea, Natural Capsules and Associated Capsules in India and Genix, prior to being acquired by Qualicaps, have high market share in their respective markets

Empty Capsule Sourcing Strategy

Global Capsule Manufacturer

• Big pharma generally prefers a dual sourcing strategy so as to minimize the risk of any supply disruptions. Global capsule manufacturers, such as Lonza and Qualicaps have quite high manufacturing capacities compared to annual purchase volume of a Big pharma companies(2 billion capsules)

• Also, capsule manufacturers are attempting to become backward integrated so as to gain more control on gelatin pricing

Regional Capsule Manufacturer

• Big pharma and domestic pharma companies source locally as number of manufacturers providing empty capsules are higher also the drugs launched are majorly to cater to domestic demand. Ex. GSK is sourcing empty capsules from Natutal Capsules Ltd., Cipla sources empty capsules from multiple local suppliers

Cost Drivers of Empty Capsules

Raw material is the major contributor in the cost of production in both emerging and developed markets. However cost of raw material is lower in emerging markets, such as India. The mark-up for empty capsules in India and developed markets is around 15 percent and 15-20 percent respectively.

• Raw Material Cost : Raw material is the major contributor to the cost of empty capsules – it typically accounts for about 45-55 percent of the production cost. In addition to the Gelatin sources, type of end product (empty capsule) is a big factor for cost analysis.

• Demand : Geographical presence plays and important role in cost reduction. Different regions may have different consumer preferences, in that case, profit margin is very less for manufacturers. Utility cost also differs in different geographies. All these are the cost deciding factors.

• Labor Cost : In developing countries like India and China, Labor cost is low compare to the developed regions like USA and Europe. So cost structure would be different for both the regions.

• Supply Chain : A robust supply chain is necessary requirement for the successful production and delivering. If supply chain is disrupted, it affects the supply, and increases the gap in supply and demand, hence more cost allocation to alternate sources.

Why You Should Buy This Report

The report provides information about the global and regional empty capsules market including a regional market snapshot of Europe, North America, and Asia. It lists out the industry drivers and constraints and gives Porter's five forces analysis of the empty capsules market. It does a cost structure and pricing analysis and provides information about EGC, GMP, empty hydroxypropyl methylcellulose capsules, gelatin capsules, Coni Snap, industry trends, and best practices The report lists and gives a profile of the key empty capsules suppliers like Roxlor, Natural Capsules Limited, etc.