The market for pharmaceutical excipients has seen strong growth over the past few years and is forecast to expand at a compound annual growth rate (CAGR) of 6.7 percent from 2014 to 2019, benefiting from rising demand in the pharmaceutical industry for functional excipients.

According to a new report by MarketsandMarkets, the global pharmaceutical excipients market was valued at almost $5.8 billion in 2013 and is expected to grow to $6.1 billion in 2014. By 2019, the market will be worth an estimated $8.4 billion.

Pharmaceutical excipients are used as fillers & diluents, binders, suspension & viscosity agents, coatings, flavoring agents, disintegrants, colorants, lubricants & glidants and preservatives.

In the coming years, demand for excipients will be driven in part by the expiration of patents on a number of blockbuster drugs, which increases the demand for generics.

The emergence of new excipients is also boosting the market, the research firm said. Nanotechnology helps impart new functions to pharmaceutical excipients. Products such as nanotechnology-enabled drug delivery systems and liposomal drug delivery systems enable better targeting of the disease site, which results in reduced drug toxicity.

Meanwhile, there are certain factors that could inhibit the growth of the market to some extent. They include declining investments in R&D by pharmaceutical excipient producers and the increasing quality compliance and regulatory requirements they face, leading to a restricted number of U.S. FDA approved manufacturing sites.

North America accounts for the largest share of the global pharmaceutical excipients market, followed by Europe, Asia-Pacific and the rest of the world. Looking ahead, stronger growth is expected to be seen in Asia, particularly in India and China.

Much of the growth in these markets is driven by an increase in outsourcing to these locations because of low labor costs. They are also some of the most lucrative markets for manufacturing of generic drugs for the global market, MarketsandMarkets said.