Pharmaceutical Contract Manufacturing Market

The global pharmaceutical contract manufacturing market in terms of revenue was estimated to be worth $176.5 billion in 2023 and is poised to reach $258.3 billion by 2028, growing at a CAGR of 7.9% from 2023 to 2028. The new research study consists of an industry trend analysis of the market. The new research study consists of industry trends, pricing analysis, patent analysis, conference and webinar materials, key stakeholders, and buying behaviour in the market. Various elements such as rising research activities and funding investments for generic medicines, technological advancements in CDMOs, the high cost of in-house drug development, and the regulatory filling support provided by CDMOs, are driving the market growth.

Attractive Opportunities in the pharmaceutical contract manufacturing market

To know about the assumptions considered for the study, Request for Free Sample Report

Pharmaceutical Contract Manufacturing Market Dynamics

DRIVER: High cost of In-House drug development is likely to propel the market growth

Drug discovery and development is higly expensive and time-consuming process for small and medium-sized pharmaceutical companies. However, pharmaceutical companies opt for a cheaper and efficient solution, i.e., to outsource their drug development processes to contract development and research organizations.

Also, drug development requires following stringent US FDA guidelines and maintaining quality and standards while developing formulations. This increases the in-house drug development and manufacturing cost of the formulation. Thus, the continuously increasing drug development costs, influenced by the costs of discovery & pre-clinical development, clinical development, capital, shortage of funds, and high failure rates for drugs tested on human subjects, pushed pharmaceutical companies to outsource their drug development processes to contract development and manufacturing organizations.

RESTRAINT: Varying regulatory requirements across regions

Noncompliance of guidelines and regulations by the respective authority and inferior quality of manufactured drugs brings serious consequences to the business and the brand name. Hence, compliance with regulatory guidelines is paramount in the pharmaceutical industry. For CDMOs, the drug substance/formulation manufactured on a contract basis is sold under the contractor’s brand. That requires large amounts of data to be submitted to the regulatory authority as the drug moves through phases of development and clinical trials. Hence, the handling of the data and submissions of different formulations across various countries becomes difficult for CDMOs and increases the risk of errors in regulatory filings. This factor will likely hamper the market growth of pharmaceutical CDMOs in the coming years.

OPPORTUNITY: Emerging markets

Emerging countries are bioprocess outsourcing hubs due to their cost advantages and workforce. Moreover, the increasing interest of pharmaceutical companies in drug discovery outsourcing due to the ever-increasing demand for vaccines, drying antibiotics pipelines, and rising R&D costs further fuel the growth of pharmaceutical contract development and manufacturing services in emerging markets. Likewise, advanced manufacturing technologies and the low manufacturing cost, low labour cost offered by emerging countries are supporting market players to invest in developing markets like Asia Pacific during the forecast period.  Due to these factors, emerging markets such as India and China are expected to provide significant opportunities for the growth of the pharmaceutical contract manufacturing and development market in the coming years.

CHALLENGE: Introduction of Serialization

Serialization is the process of allowing an individual identity by using a predetermined coding type for each service/product item, giving it a separate identity for tracking and tracing its location in the supply chain. As counterfeiting has become a concern for regulatory authorities and manufacturers globally. Thus, where contract manufacturing is concerned, CDMOs worldwide must execute a robust pharma serialization solution. This requires significant capital investment for software, hardware, personnel training, implementation across their sites, equipped production lines, and skilled staff. Becoming a tough challenge for a CDMO to look after. Hence, it can be considered as a challenge for pharmaceutical contract development and the manufacturing market.

Pharmaceutical Contract Manufacturing Market – Ecosystem

The pharmaceutical manufacturing services segment dominated the pharmaceutical contract manufacturing market in 2022.

Based on service, the market is broadly segmented into pharmaceutical manufacturing service, drug development service, and biologic manufacturing service. In 2022, pharmaceutical manufacturing services accounted for the dominant share, segment's large share can be attributed to factors such as the increasing biopharmaceuticals and pharmaceutical markets across the globe, and rising demand for biologics and biosimilars in the region. Furthermore, key market players are investing in drug discovery and development in the market is likely to spur the growth of the segment.

The big pharmaceutical companies segment of the pharmaceutical contract manufacturing market is expected to grow at the highest CAGR during the forecast period.

Based on end user, the market is segmented into big pharmaceutical companies, small & mid-sized pharmaceutical companies, generic pharmaceutical companies, and other end users (Academic Institutes, Small CDMOs, and CROs). The big pharmaceutical companies segment is expected to register the highest CAGR during the forecast period. Increased investment in the development of cell and gene therapies, increased number of biologics currently under pipeline studies, and the rising demand for targeted drug therapies are some of the major factor anticipated to drive the growth of market.

North America dominated the pharmaceutical contract manufacturing market in 2022.

To know about the assumptions considered for the study, download the pdf brochure

Geographically, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. In 2021, North America accounted for the largest share in the market, followed by Europe and the Asia Pacific. The large share of the North American market is owing to various factors such presence of a large number of pharmaceutical companies and the growing demand for generics. Increased research funding for pharmaceutical contract development and manufacturing is furthermore driving market growth in North America.

Key players operating in the this market are Thermo Fisher Scientific, Inc. (US), Catalent, Inc. (US), Lonza Group (Switzerland), AbbVie, Inc. (US), and WuXi AppTec (China).

Pharmaceutical Contract Manufacturing Market Report Scope

This report categorizes the pharmaceutical contract manufacturing market to forecast revenue and analyze trends in each of the following submarkets:

By Service

• Pharmaceutical Manufacturing Services
• Pharmaceutical API Manufacturing Services
• Pharmaceutical FDF Manufacturing Services
• Drug Development Services
• Biologic Manufacturing Services
• Biologic API Manufacturing Services
• Biologic FDF Manufacturing Services

By End User

• Big Pharmaceutical Companies
• Small & Mid Sized Pharmaceutical Companies
• Generic Pharmaceutical Companies
• Other End Users (Academic Institutes, Small CDMOs, and CROs)

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

Recent Developments

• In September 2022, Lonza Group collaborated with Touchlight, a biotechnology company. Lonza expanded its end-to-end offering for mRNA manufacturing with an additional source of DNA.
• In February 2022, Thermo Fisher Scientific collaborated with Moderna, Inc. for the large-scale manufacturing of Moderna’s COVID-19 vaccine, Spikevax, and other investigational mRNA medicines in its pipeline.
• In January 2023, Catalent supported the manufacturing of Sarepta’s most advanced gene therapy candidate, delandistrogene moxeparvovec (SRP-9001), to treat Duchenne muscular dystrophy.

Frequently Asked Questions (FAQ):

To speak to our analyst for a discussion on the above findings, click Speak to Analyst