As the global pharmaceutical market continues to evolve, it’s apparent that the use of, and need for contract service and manufacturing providers will continue to expand.
The reasons for this growth are fairly basic but bear repeating. Pharmaceutical innovator companies need to stock their pipelines with new drugs but do not have the resources they once had to discover, develop, and manufacture products. Hence the need for outside help.
Contract Research Services
Market research studies show a clear trend toward increasing capital spent on contract services. According to a recently released market research report “Contract Research Organization Services (CROs) Market by Type (Discovery, CMC, Preclinical, Clinical Research, Laboratory Services), Therapeutic Area (Oncology, CNS, Cardiovascular), End User (Pharmaceuticals & Medical Device) - Global Forecast to 2023”, published by Markets and Markets™, the market for CROs is projected to reach
$56.34 Billion by 2023 from $39.13 Billion in 2018, at a CAGR of 7.6%. Increased outsourcing of R&D activities and increasing number of clinical trials are the major factors driving the growth of the CRO Services Market.
According to the report the clinical research services segment accounted for the largest share of the global CRO services market. The report attributes this growth to factors such as the growing biosimilar and biologics markets, increased R&D investments in pharmaceutical and biopharmaceutical companies, and the increase in clinical trial activities.
Diving a little deeper into the market to take a look at pre-clinical services, which is where the all-important “go – no go” decisions are made to decide if a drug should be advanced into clinical trials Research and Markets predicts this portion of the market to reach $6.6 billion by 2025.
According to the report, the market is expected to witness increased growth during the forecast period due to a rise in R&D expenditure on early stage development as well as an increase in number of potential drugs in the preclinical phase. For these reasons, Research and Markets predicts an increase in outsourcing penetration will contribute to the growing demand of life science companies for outsourced preclinical services.
Additionally, the rise in the number of complex drugs entering preclinical trials and the growing pressure to curb R&D expenses are expected to contribute to the growing demand for quality CROs, thereby contributing to the market growth. As per a recent report by the Servier Research Institute, issues related to nonclinical toxicology testing results in a 50% failure rate in the early stage development phase. This high failure rate in this phase is expected to contribute to the demand for early stage development CROs during the forecast period.
Contract Manufacturing Services
A recent report published by Grand View Research, predicts the global pharmaceutical contract manufacturing/contract research market will reach $238.3 billion by 2025. The report identifies the biopharma/biosimilars market as one of the drivers influencing the drive for CMO capacity and there is some concern that the increase in expression levels will influence the market segment. As the increase in the expression level of each cell increases the need for volume declines, resulting in less need for capacity. This trend will benefit smaller CMOs with less capacity.
However, the overall expansion of the market for biosimilars and biobetters is anticipated to dramatically increase the demand for contract development and manufacturing support. Service providers that hold the potential of providing cost as well as quality advantages are set to make inroads and grow at tremendous pace in the forecast period.
Further Key Findings
- Contract manufacturing services estimated to dominate the market over research services
- These services are segmented on the basis of development of different forms of formulations. Active
- Pharmaceutical Ingredient (API) / Bulk drugs registered the largest share of revenue.
- Pharmaceutical companies prefer the outsourcing services for API research and manufacture
- Factors supportive for this trend includes reduction in the cost of production of APIs
- Active molecules from small companies are always acquired by the big pharmaceutical companies
- The prominent entities focus on marketing rather than core competencies of production of API in order to maintain presence
- Finished dose formulations are expected to register the fastest growth in the coming years
- Contract research services for oncology dominated the market and are anticipated to maintain the dominance in the coming years
- CMOs/CDMOs with the ability to establish facilities in emerging countries are expected to drive growth
- Companies can position themselves for strong growth, given that demand is expected to expand rapidly in the coming years
- The major countries include Brazil. Russia, India, and China as the contract service sector is in its infancy in these regions
- Companies are engaged in lifecycle management of small-molecule drugs through the development of modified generics with uniquely enhanced properties
- Increased competitiveness in the contract service sector is anticipated to ultimately benefit the sector growth