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The contract development and manufacturing organization outsourcing market size is estimated to grow by USD 136.9 billion at a CAGR of 17.01% between 2023 and 2028. Factors fueling this growth include the burgeoning pharmaceutical industry, the rising demand for comprehensive CDMO solutions, and the cost savings derived from outsourcing operational and capital expenses to CDMOs. The pharmaceutical sector's continuous expansion, driven by research and development advancements and increasing healthcare expenditures, creates a robust demand for CDMO services. Furthermore, the one-stop-shop model offered by CDMOs, which encompasses development, manufacturing, and testing services, is increasingly preferred by pharmaceutical and biotech companies. Consequently, CDMOs' ability to reduce operational and capital expenses through economies of scale and specialized expertise makes them indispensable partners in the pharmaceutical value chain.
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The Contract Development and Manufacturing Organization (CDMO) market in the pharmaceutical industry has experienced significant growth due to the increasing outsourcing trends by pharmaceutical firms for drug development. CDMOs provide custom solutions for small molecules and biologics, including prefilled syringes, autoinjectors, and biosimilars. The Carlyle Group, Advent, RA Chem, PAG, and Samara Capital are among the investors funding CDMOs to expand their capabilities in this sector. Pharmaceutical innovators outsource various stages of drug development, such as clinical trials, to CDMOs for cost savings and faster time-to-market. The outsourcing of pharmaceutical research, including chronic diseases, has become a crucial revenue stream for CDMOs. The production of monoclonal antibodies and insulin, as well as vaccinations, is a significant part of CDMO services. CDMOs also offer contract research services for generic drugs and are increasingly involved in the manufacturing of biotechnology products. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing pharmaceutical industry will fuel the growth of the market. Pharmaceutical firms increasingly turn to Contract Development and Manufacturing Organizations (CDMOs) for drug development and production, particularly in the areas of small molecules and biologics. The aging geriatric population, which is more susceptible to chronic diseases, is a significant driver of this trend. In the US, for instance, individuals aged 65 and above are projected to comprise approximately 20% of the total population by 2025. The rise in chronic illnesses, such as diabetes and obesity, which are often linked to poor lifestyles, further fuels the demand for pharmaceutical solutions. One-third of adults worldwide are classified as obese, and these conditions can lead to more serious health issues, including heart diseases. CDMOs offer contract research, manufacturing, and packaging services, enabling pharmaceutical innovators to focus on research and development. Major players in the CDMO market include The Carlyle Group, Advent International, RA Chem, PAG, and Samara Capital. These organizations provide a range of capabilities, including prefilled syringes, autoinjectors, biosimilars, and injectable capabilities. CDMOs also play a crucial role in the production of biologics, such as Aflibercept, and generic injectables. They offer quality testing services and ensure time efficiency and sophistication in their manufacturing processes. The presence of CDMOs is essential for the pharmaceutical industry, particularly in the context of the increasing demand for personalized medicine and the production of complex AP biologics. The global biopharmaceutical industry is undergoing strategic transactions, with companies such as AbbVie investing in glaucoma surgery and CDMOs expanding their capabilities to cater to the needs of the industry.
The Union Cabinet recently approved funding for the production of essential drugs, further emphasizing the importance of CDMOs in the pharmaceutical sector. The CDMO market is expected to grow significantly due to the increasing demand for contract research, manufacturing, and packaging services. The market is driven by the need for time efficiency, sophisticated technology, and cost-effective manufacturing. The Animal Nutrition Market also presents opportunities for CDMOs to expand their offerings. In conclusion, the CDMO market is a critical component of the pharmaceutical industry, particularly in the context of the aging population, the rise of chronic illnesses, and the increasing demand for personalized medicine and biologics production. CDMOs offer contract research, manufacturing, and packaging services, ensuring time efficiency, cost-effectiveness, and sophistication in their processes. Such factors will help enterprises to manufacture a large number of drugs or medicines in a short period, which, in turn, will drive the growth of the global CDMO outsourcing market during the forecast period.
Growing use of analytics by CDMOs is the primary trend for the market growth. There are many analytical tools and techniques that can be used by CDMOs. The use of analytics by CDMOs will aid enterprises in enhancing productivity and efficiency by discovering meaningful patterns in the data using forecast analytics, charts, percentage change analytics, and numerical analytics. The use of analytics by CDMOs can be a complex process as it needs to be executed in real-time and in a dynamic framework.
This solution also helps CDMOs to develop and utilize methods that can make the development process of a product more efficient. Various CDMOs are using analytics to offer their customers better solutions. The growing use of analytics by CDMOs will lead to the growth of the global CDMO market during the forecast period.
Threat of infringement of intellectual property (IP) rights is one of the key challenges hindering the CDMO market growth. Developing a new drug or medicine and successfully launching it in the market is a lengthy and expensive process. Hence, they strongly protect their IP such as patents of drugs or medicines across the globe until they expire. Enterprises outsource the manufacturing of patented drugs or medicines to CDMOs to speed up the production process and make the patented product available in the market quickly before the IP rights expire. This will help them to gain market share and get the maximum return on investment before patent expiry. Outsourcing can cause a threat to its IP.
CDMOs might not have an appropriate strategy for preserving and protecting critical IPs, which can cause the infringement of the IP rights of the drug or medicine. The infringement of the IP rights of the drug or medicine can impact the trust of pharma and biotech enterprises over CDMOs, which, in turn, can impact the growth of the global CDMO market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Alcami Corp. - The company offers a broad range of pharma manufacturing facilities. Also, the company offers complete contract development, testing, and manufacturing services to pharma and biotech companies
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market share growth by the small molecules segment will be significant during the forecast period. Small molecules are naturally occurring compounds that have been re-synthesized or isolated in laboratories. Most of these small molecules are independent of the manufacturing process. They can be formulated into orally delivered doses that offer better compliance and involve lower costs than injectables. They have the ability to reach almost any desired destination inside the body, owing to their small size. Also, their small structure helps them to penetrate cell membranes easily, which makes them more effective in some cases. Owing to these benefits, the demand for small molecules is expected to grow exponentially during the forecast period.
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The small molecules segment was valued at USD 52.2 billion in 2018. Furthermore, due to the increasing demand for small molecules, various CDMOs are investing in expanding their facilities to cater to the large market or are acquiring new vendors to enhance their product offerings. For instance, in May 2021, Enteris BioPharma Inc. announced the expansion of its Boonton, NJ manufacturing facility and the launch of its CDMO business segment. This was aimed to provide custom solutions for the formulation, development, and manufacturing of solid oral doses, as it is difficult to formulate BCS III and IV compounds, including peptides and highly potent compounds. All these factors are expected to increase the demand for small molecules, which, in turn, will lead to the growth of the global CDMO market during the forecast period.
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APAC is estimated to contribute 35% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The CDMO outsourcing market in North America is expected to grow due to the increase in the number of people with chronic diseases in countries such as the US and Canada. Poor lifestyle choices, such as the overconsumption of alcohol, smoking, lack of physical activity, poor diet, and inadequate relief from chronic stress are some of the reasons for the rise in the number of people with chronic disease. These factors lead to the development and progression of chronic diseases, such as Type 2 diabetes, obesity, hypertension, and cardiovascular diseases. This, in turn, will lead to the growth of the CDMO outsourcing market in North America during the forecast period.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
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The market is a significant sector in the pharmaceutical industry, driven by the increasing demand for outsourcing manufacturing services. Firms seek CDMOs for their expertise in manufacturing complex drugs and bringing innovations to market efficiently. The market is characterized by the presence of numerous players offering a range of services, including drug development, formulation, manufacturing, and packaging. The CDMO market is driven by several factors, including the growing trend of outsourcing manufacturing activities, the need for cost savings, and the increasing focus on bringing new drugs to market quickly. Additionally, the market is influenced by factors such as regulatory compliance, technology advancements, and the rising demand for personalized medicines. CDMOs play a crucial role in the pharmaceutical value chain by providing end-to-end solutions, from drug discovery to commercialization. They offer various benefits, such as reduced time-to-market, cost savings, and improved product quality. The market is expected to grow significantly in the coming years, driven by the increasing demand for outsourcing services and the need for innovation in the pharmaceutical industry. In conclusion, the CDMO market is a dynamic and growing sector in the pharmaceutical industry, driven by the increasing trend of outsourcing manufacturing activities and the need for innovation and cost savings. CDMOs offer a range of services, from drug development to commercialization, and play a crucial role in bringing new drugs to market efficiently and effectively.
Market Scope |
|
Report Coverage |
Details |
Page number |
169 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 17.01% |
Market growth 2024-2028 |
USD 136.9 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
13.43 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
APAC at 35% |
Key countries |
US, China, UK, Germany, and India |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Aenova Holding GmbH, Alcami Corp., Almac Group Ltd., Boehringer Ingelheim International GmbH, Catalent Inc., Celonic AG, Corden Pharma International GmbH, Curia Global Inc., Eurofins Scientific SE, FAMAR Health Care Services, FUJIFILM Holdings Corp., Laboratory Corp. of America Holdings, Lonza Group Ltd., NextPharma GmbH, Piramal Enterprises Ltd., Recipharm AB, Siegfried Holding AG, The Lubrizol Corp., Thermo Fisher Scientific Inc., and Vetter Pharma Fertigung GmbH and Co. KG |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for market forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Service
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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