The global pharmaceutical contract manufacturing market is anticipated to be worth USD 90 billion in 2023 and is expected to reach USD 140 billion by 2030. It is estimated to grow at a compounded annual growth rate of 6.5% during the forecast period (2022-2030).
Given that establishing or acquiring manufacturing capabilities is a time and resource-intensive process, pharmaceutical companies face significant challenges in independently conducting development and manufacturing operations. The aforementioned constraints, coupled with the growing demand for safer and more effective drugs driven by the COVID-19 pandemic, have led companies to outsource substantial portions of their business segments to contract manufacturing organizations (CMOs) and contract development and manufacturing organizations (CDMOs). The current landscape of pharmaceutical contract service providers is highly diverse, encompassing start-ups, mid-sized firms, and established players. The recognized expertise of CMOs and CDMOs is believed to facilitate a reduction in time-to-market, substantial cost benefits, and access to expanded production capacities and innovative technologies. Notably, there has been considerable merger and acquisition activity in the pharmaceutical contract manufacturing market in recent years, as companies strive to become comprehensive service providers catering to the varied needs of pharmaceutical developers, from early-stage development to commercial production. Considering the continuous innovation in production technologies, the evolving pipeline of small molecule products, and the escalating demand for such drug candidates, we anticipate positive market growth in the pharmaceutical contract manufacturing sector during the forecast period.
Market Driver
The global pharmaceutical contract manufacturing market is experiencing significant trends driven by various factors. One prominent driver is the increasing demand for cost-effective drug production, aligning with the rising healthcare expenditures worldwide. The adoption of advanced technologies, particularly in the realm of biologics and cell and gene therapies, is also contributing to the market's evolution. Pharmaceutical companies are increasingly outsourcing manufacturing activities to focus on their core competencies, facilitating a more streamlined and efficient approach to drug development. Additionally, the growing demand for generic drugs, fueled by the expiration of patents, is shaping the landscape of pharmaceutical contract manufacturing. These trends collectively underscore the dynamic and transformative nature of the market, highlighting the crucial role of contract manufacturing organizations in meeting the evolving needs of the pharmaceutical industry.
Market Restraints
The global pharmaceutical contract manufacturing market faces challenges in the form of high initial investment costs for equipment and facilities. Establishing independent manufacturing capabilities requires substantial financial resources. Additionally, companies are constrained by their dependence on the quality and reliability of Contract Manufacturing Organizations (CMOs). The success of pharmaceutical development hinges on proficient CMOs, emphasizing the need for careful partner selection. Navigating these challenges requires strategic decision-making and innovative approaches. Despite these restraints, the industry aims for sustainable growth through overcoming financial barriers and enhancing partnerships with reliable CMOs.
Growth Factors
The global pharmaceutical contract manufacturing market is experiencing notable trends and opportunities. A significant trend is the increasing demand for biopharmaceuticals and biosimilars, reflecting a shift towards advanced therapeutic approaches. This has led pharmaceutical companies to explore outsourcing options for manufacturing. Additionally, there is a growing demand for clinical trial support services, creating substantial opportunities for contract manufacturing organizations (CMOs) and contract development and manufacturing organizations (CDMOs). The industry's response to these trends indicates a dynamic and responsive sector poised to capitalize on emerging opportunities in the global pharmaceutical landscape.
Recent Developments in Pharmaceutical Contract Manufacturing Market
Several recent developments have taken place in the field of the pharmaceutical contract manufacturing market. We have outlined some of these recent initiatives below. These developments, even if they took place post the release of our market report, substantiate the overall market trends that have been outlined in our analysis.
- In September 2023, Strides Pharma announced its intention to undergo a demerger, separating its Contract Development & Manufacturing Organization (CDMO) and soft gelatin businesses. The proposal involved the amalgamation of the identified CDMO business of Strides, the corresponding business of Steriscience, and the soft gelatin business under Stelis, which will be named OneSource, as outlined in a stock exchange filing.
- In October 2023, Egis Pharmaceuticals announced the expansion of its operations with over 100 billion HUF investments in Hungary. The company provides drug substance contract development and contract manufacturing services through Egis Pharma Services. Egis aims to offer active pharmaceutical ingredient development and contract manufacturing services to original and generic pharmaceutical companies, marking a significant milestone in its continuous development.
- In October 2023, Advent International and Warburg Pincus announced the completion of acquisition of Baxter International's BioPharma Solutions business. The business will now be a standalone contract development and manufacturing organization (CDMO) operating under the name Simtra BioPharma Solutions and will continue to offer customers the same solutions and capabilities to help ensure supply of critical pharmaceutical products worldwide.
Based on key business segments, the pharmaceutical contract manufacturing market is segmented into API and FDF.
- API will dominate the pharmaceutical contract manufacturing market during the forecast period and is anticipated to capture 64% of the overall revenue share by 2030.
- FDF pharmaceutical contract manufacturing market will grow at a higher CAGR of 7.0% during the forecast period 2023-2030.
Based on the type of API manufacture, the pharmaceutical contract manufacturing market is segmented into originator and generic.
- Originator will dominate the market during the forecast period and is anticipated to capture 51% the market share by 2030.
- Generic will likely grow at a higher compounded annual growth rate (CAGR) of 6.2% during the forecast period 2023-2030.
Based on the type of FDF offered, the pharmaceutical contract manufacturing market is segmented into oral solids, injectables, and others.
- The injectables will dominate the pharmaceutical contract manufacturing market during the forecast period and is anticipated to capture 40% of the market share by 2030
- Oral solids will be going to hold 30% of the overall revenue share by 2030.
Based on the type of primary packaging form, the pharmaceutical contract manufacturing market is segmented into blisters, bottles, parenteral, and others.
- Parenteral form will dominate the pharmaceutical contract market during the forecast period and is anticipated to capture 33% of the market share by 2030.
- 22% of the market share is going to be held by bottle packaging forms by 2030.
Based on the scale of operation, the pharmaceutical contract manufacturing market is segmented into clinical and commercial.
- Commercial segment will dominate the pharmaceutical contract manufacturing market during the forecast period and is anticipated to capture 81% by 2030.
- Clinical operation will likely to grow at a higher compounded annual growth rate (CAGR) of 11.6% during the forecast period 2022-2030.
Based on the type of end users, the pharmaceutical contract manufacturing market is segmented into small, mid-sized, and large pharmaceutical companies.
- Small pharmaceutical companies will dominate the market during the forecast period, capturing 51% of the market share by 2030.
- Large companies will grow the market at a higher compounded annual growth rate (CAGR) of 9.1% during the forecast period 2022-2030.
Based on the geographical region, the pharmaceutical contract manufacturing market is segmented into North America, Europe, Asia-Pacific, Latin America, the Middle East and North Africa.
- Asia-Pacific will dominate the pharmaceutical contract manufacturing market during the forecast period and is anticipated to capture 37% of the market share by 2030.
- Middle East and North Africa will grow at a higher CAGR of 6.9% during the forecast period 2022-2030.
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