Capsule manufacturing, although a niche field, is important as a solid dosage delivery mechanism, and using proper technology to ensure high levels of accuracy. With very few serious players in the industry and growth in demand, this field is ever-growing. Artificial Intelligence (AI) has affected the manufacturing process in numerous ways, and also helped companies to increase their production by implementing proper workflow and robotics. The global empty capsules market is projected to reach $3.7 billion by 2026 from $2.6 billion in 2021, at a CAGR of 7.2 per cent. This growth is driven by the growing adoption of capsule formulations and the growth of the pharma market.
Even though the COVID-19 pandemic impacted the market negatively due to supply chain disruptions and the imposition of government regulations on production units, in the coming years, the market is going to be stable and large. The growth in capsule manufacturing is based on many things.
- Increasing spend on pharma/healthcare as a percentage of GDP across the world
The pandemic has increased the importance of healthcare, and governments across the world are spending a much larger of their GDP on healthcare leading to higher penetration and increasing market size for the entire pharma industry. For eg, India’s spending on healthcare increased from 1.4 per cent of GDP in 2016-17 to 1.8 per cent of GDP in 2020-21. Further, the National Health Policy of 2017 recommends government expenditure on health to be increased to 2.5 per cent of GDP by 2025. In particular, the oral dosage forms i.e. tablets, capsules and syrups have seen a sharper growth in this period due to increased preference to self-medication rather than hospital/clinic visit during the pandemic. This has led to a growth of oral dosage forms i.e. tablets, capsules and syrups across the industry.
- Increasing demand for alternate therapeutical segments like nutraceuticals, homeopathy, ayurveda, etc
As the non-communicable diseases such as cancer, diabetes, lung disorders, etc are increasing rapidly, there is a high demand for alternate therapeutical segments like nutraceuticals, homeopathy, ayurveda, etc as a supplement. As most of these formulations are powder-based, which cannot be formulated into any other dosage form, capsules are the preferred dosage form as it is easy to fill and masks the taste. This segment has already seen a sharp growth in the last few years, and post the pandemic, people are more focussed towards the prevention of diseases and this has helped in expanding this segment significantly.
- Stringent approval mechanisms and high technological barrier
The manufacturing of capsules is a complicated task in terms of manufacturing huge volumes at a very high accuracy in addition to challenges in transporting in controlled conditions. Hence, the market is highly consolidated and there are very few players. For e.g., there are a handful of companies in India such as ACG, Fortcaps, Natural, Healthcaps, etc, to name a few. To be stable in the competitive market, the companies are introducing new products with modifications and the use of technology and digitalisation. In the past decade, there has been a continuous improvement in the specifications of the capsule, its design, and its quality, which also poses a barrier.
- Intensified funding
One of the main reasons that the manufacturing of capsules has increased is due to the funding from various private firms and governments. After the pandemic, the government has supported the health sector in every way possible. Capsule manufacturing was one of the key sectors in pharma that was offered the Production Linked Incentive (PLI) scheme by the government of India as a focus segment in 2021.
Several factors are going to affect the growth of capsule manufacturing. With the advancements in technologies and health industries shifting to automation and AI, the focus is converging to increase production by deploying various automation in the manufacturing processes. As we are all aware, advances in diagnosis and treatment are coming every day, as new approaches are taken into consideration. Population growth, aging, the emergence of personalised medicines are leading to the development of capsules.