Small-molecule APIs: Production route
Why making one kilo of medicine uses hundreds of kilos
What this tab covers How it is made: the main production routes or, for product families, the main product types and technologies, compared on share of supply, inputs per tonne, plant scale, yield, co-products and unit cost.APIs are made by three broad routes. Most generics come from batch organic synthesis in multipurpose stainless-steel and glass-lined reactors. Antibiotics, statins and steroids start from fermentation and are finished chemically or with enzymes. A growing share uses biocatalysis or continuous flow to cut solvent use. Plants are rated by reactor volume, not tonnes: Laurus passed 8,200 kL in FY26. The cost of an API is set by the number of steps, yield, solvent recovery and the cost of the KSM.
Routes compared
| Route | Share of supply | Inputs per tonne | Typical scale | Yield | Co-products | Unit cost |
|---|---|---|---|---|---|---|
| Batch chemical synthesis (multipurpose plants) | most of generic API tonnage (indicative) | PMI typically 168-308 t of materials per t of API, mostly solvents and water (ACS GCI via Kekessie et al. 2024, indicative) | Laurus 8,200 kL reactor volume (FY26); single-product generic blocks 100-5,000 t/yr | overall 20-70% across steps (indicative) | spent solvents, salts, high-COD effluent | generic API prices from about $3/kg (paracetamol) to hundreds of $/kg; raw materials were 39.5% of Divi's Q4 FY26 sales |
| Fermentation plus semi-synthesis | dominant for antibiotics; China leads | sugar or starch feed and large electricity for aeration and cooling (see antibiotic_intermediates) | Lyfius (Aurobindo) penicillin G 15,000 t/yr at Kakinada | not published | mycelium biomass, spent broth | scale-driven; Chinese pricing has made sub-scale plants unviable |
| Biocatalysis and continuous flow | small but rising (indicative) | can cut PMI by half or more versus batch routes (ACS GCI award cases, indicative) | kilo-lab to a few hundred t/yr | often higher selectivity | less solvent waste | lower operating cost, higher development cost |
| Highly potent and complex APIs (HPAPI, ADC payloads) | small tonnage, rising value share | not published | kilograms to a few tonnes a year | not published | cytotoxic waste requiring incineration | very high per kg |
How each route works
Batch chemical synthesis (multipurpose plants)Sequential reactions in 2-20 kL reactors with isolation, filtration and drying between steps. The same train makes many products in campaigns. Most generic APIs follow 4-10 steps from a KSM.
flexible and cheap capital; high solvent and waste load
Laurus Labs FY26 press release; BoB Capital on Divi's Q4 FY26 (May 2026); IMARC Q2 2025 Fermentation plus semi-synthesisMicrobes (Penicillium, Acremonium, Streptomyces) produce a natural product in 100-300 m3 fermenters; it is extracted and converted chemically or enzymatically to the API. Used for beta-lactams, macrolides, statins, steroids and some vitamins.
low cost at scale; needs very large capital and cheap power
Aurobindo press release (Oct 2024); PSU Watch (2026) Biocatalysis and continuous flowEngineered enzymes replace metal catalysts or protecting-group chemistry; flow reactors run hazardous steps (nitration, hydrogenation, azides) in small volumes continuously. Adopted by originators and leading CDMOs.
greener and safer; needs process development early
ACS GCI Pharmaceutical Roundtable (indicative) Highly potent and complex APIs (HPAPI, ADC payloads)Oncology and hormone APIs made in contained suites with isolators. Small volumes, high margin. Lonza, Piramal Pharma Solutions and Divi's invest here.
high barriers and margins; small markets
qualitative Unit economics are indicative ranges from the sources named; costs move with feedstock and energy prices, plant size and region.