What Is an Active Pharmaceutical Ingredient (API)?

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The Active Pharmaceutical Ingredient (API) is the part of any drug that produces its effects. Some drugs, such as combination therapies, have multiple active ingredients to treat different symptoms or act in different ways.

Production of APIs has traditionally been done by the pharmaceutical companies themselves in their home countries. But in recent years many corporations have opted to send manufacturing overseas to cut costs. This has caused significant changes to how these drugs are regulated, with more rigorous guidelines and inspections put into place. 

Components of Medications

All drugs are made up of two core components: the API, which is the central ingredient, and the excipients, the substances other than the drug that helps deliver the medication to your system. Excipients are chemically inactive substances, such as lactose or mineral oil. 

For instance, if you have a headache, acetaminophen is the active ingredient, while the liquid in the gel-capsule or the bulk of a pill is the excipient.

Strength of APIs

Manufacturers use certain standards to determine how strong the API is in each drug. However, the standard can vary widely from one brand to another. One brand might use one test, another a different one. In all cases, manufacturers are required by the FDA to prove the potency of their products in real life patients, as well as laboratory conditions.

Top API Manufacturers

A leading manufacturer of APIs is TEVA Pharmaceuticals. With over 300 API products, they have the industry's largest portfolio. Another leading manufacturer is Dr. Reddy's, with more than 60 APIs in use today. 

Where Are APIs Made?

While many pharmaceutical companies are located in the United States and England, most API manufacturers are overseas. The largest are located in Asia, particularly in India and China. More and more companies are turning to outsourcing to cut costs on expensive equipment, employees, and infrastructure. 

Notably, AstraZeneca Pharmaceuticals used to operate several manufacturing centers in the United States. Now, just 15 percent of their APIs are created in the U.S. and there are plans to end that small percentage and outsource all manufacturing overseas. 


The quality of APIs has a significant effect on the efficacy and safety of medications. Poorly manufactured or compromised APIs have been connected to serious issues, such as illnesses and even death.

Even in the case of outsourcing, APIs are subject to stringent regulations and oversight from the country they are shipped to. For example, API manufacturing plants overseas still go through an inspection by the U.S. Food & Drug Administration.

As evidenced by the creation of APIs, the pharmaceutical industry is rapidly changing. Companies no longer handle every step of the drug-making process, from creating the API to building the capsule. In order to cut down on expenses and increase profits, companies have begun outsourcing the creation of APIs to foreign manufacturers based in Asia. While this has helped their bottom line, there is continued concern about the quality of these APIs produced overseas.

In response, governing bodies responsible for patient safety, such as the FDA, have instituted intense screenings to ensure medication quality and prevent defects. Violating any of these established standards can result in fines or very expensive recalls for the pharmaceutical companies behind these manufacturers.