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The pharmaceutical contract packaging market is estimated to grow at a CAGR of 12.81% between 2022 and 2027. The size of the market is forecast to increase by USD 6,006.87 million. The growth of the market depends on several factors, including Rising R&D spending in the pharmaceutical industry, growing global pharmaceutical sales, and an increasing number of new drugs approved by the FDA.
This report extensively covers market segmentation by packaging (plastic bottles, blister packs, pouches, parenteral containers, and pre-filled syringes), type (primary, secondary, and tertiary), and geography (North America, APAC, Europe, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The rising R&D spending in the pharmaceutical industry is notably driving the market growth, although factors such as the emergence of in-house packaging may impede the market growth. Our researchers analyzed the data with 2022 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.
Key Pharmaceutical Contract Packaging Market Driver
The rising R&D spending in the pharmaceutical industry is notably driving market growth. Many pharmaceutical companies are investing in R&D to be successful in their businesses in the long term. On average, a pharmaceutical company spends around 15%-20% of its revenue on R&D purposes. For instance, Biogen, one of the global pharmaceutical manufacturing companies, spent around 16%-17% of its revenue on R&D in 2021. The high R&D spending by pharmaceutical manufacturers is expected to bring more pharmaceutical products to the market. This has increased the demand for pharmaceutical contract packaging.
By adopting contract packaging, pharmaceutical manufacturers can reduce their capital expenditure and operating cost associated with the purchase of packaging machinery, space for setting up packaging units, and labor costs for the same. Furthermore, opting for contract packaging also helps pharmaceutical manufacturers concentrate on their core businesses. The R&D spending by pharmaceutical manufacturers will also increase the demand for innovative packaging. Therefore, all these factors will boost market growth during the forecast period.
Significant Pharmaceutical Contract Packaging Market Trend
The growing demand for sustainable packaging is an emerging trend in the market. The growing environmental concerns are increasing the demand for sustainable packaging solutions among pharmaceutical manufacturers. Plastic films and plastic materials are mostly derived from petroleum feedstock. Their adverse effects on the environment have encouraged the vendors to provide eco-friendly packaging to their consumers.
Many pharmaceutical manufacturers are setting sustainable goals in their business operations to reduce their environmental impacts. For instance, Johnson and Johnson announced its sustainable goal to provide 100% reusable, recyclable, and compostable packaging by 2025. The adoption of sustainable packaging by pharmaceutical end-users enables contract packaging vendors to focus on creating sustainable packaging techniques. Hence, these factors are expected to propel the growth of the global market during the forecast period.
Major Pharmaceutical Contract Packaging Market Challenge
The emergence of in-house packaging is a major challenge impeding market growth. A few pharmaceutical manufacturers are now focusing on gaining complete control over their product supply chain. This, in turn, is encouraging them to adopt in-house packaging units rather than outsourcing the need to contract packagers. Contract packaging can be time-consuming as the pharmaceutical products are transported between the manufacturers' locations and contract packagers' locations. Besides the transportation and labor expenses, contract packaging can also increase the overall lead time of the product hitting the market.
Furthermore, the other reasons for having in-house packaging units are the unwillingness of the pharmaceutical packaging manufacturers to share information with contract packagers, the availability of in-house machinery and staff, and high switching costs. Additionally, many pharmaceutical contract manufacturers are also providing in-house packaging services as a bundled offering. For example, Aesica, a UK-based pharmaceutical contract manufacturer, is providing complete pharmaceutical services-from pharmaceutical product manufacturing to packaging. Therefore, all these factors are likely to hinder the market growth during the forecast period.
Key Pharmaceutical Contract Packaging Market Customer Landscape
The report includes the market's adoption lifecycle, covering 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 growth strategies.
Global Pharmaceutical Contract Packaging Market Customer Landscape
Vendors 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.
Berlin Packaging LLC -The company offers packaging services to automotive, food, home care, industrial chemicals, pharmaceuticals, and personal health. The key offerings of the company include pharmaceutical contract packaging?solutions.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the plastic bottle segment will be significant during the forecast period. Pharmaceutical plastic bottles are made up of either low-density polyethene (LDPE), high-density polyethene (HDPE), or polypropylene materials. These bottles are used as primary packaging for solid, liquid, and semi-liquid pharmaceutical products.
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The plastic bottle segment was valued at USD 1,628.12 million in 2017 and continue to grow by 2021. The demand for plastic bottles is increasing in the pharmaceutical industry. This is because plastic bottles eliminate the need for tertiary packaging and ensure the safety of pharmaceutical products throughout the supply chain. Syrups, ophthalmic, and nasal medicines are commonly packaged in plastic bottles. Furthermore, the growing need for medicines is also expected to increase the demand for plastic bottle pharmaceutical packaging. Hence, such factors will boost segment growth during the forecast period.
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North America is estimated to contribute 29% 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 US is the key country contributing to the growth of the market in North America. The growing value of the US pharmaceutical exports, increasing healthcare spending, and the rising ageing population are the major factors driving the market growth in the country. Furthermore, the pharmaceutical industry in the US consists of established global players such as Johnson and Johnson, Pfizer, Abbot Laboratories, and Bristol Myers Squibb.
Additionally, a rise in demand for pharmaceutical filling is expected to propel the demand for pharmaceutical products in North America. Unit-dose delivery formats such as vials, ampules, and refillable syringes require sterile aseptic packaging as these are preservative-free that are offered by pharmaceutical packaging companies. Furthermore, the healthcare sector is witnessing significant growth in North America, owing to factors such as the growing healthcare infrastructure, rapid urbanization, the introduction of premium medicines, and the introduction of hospital chains that have a cascading effect on healthcare delivery. As the healthcare market grows, there will be a simultaneous rise in the demand for packaging products for various types of medicines. These are some of the factors that would influence the demand for contract packaging in the region during the forecast period.
COVID-19 in North America impacted the market in a positive manner in 2020 as the supply chain network in the healthcare industry witnessed a substantial rise in demand due to the pandemic. COVID-19 patients required high-quality medical facilities and medicines for their treatment. Thus, the rise in the number of COVID-19 patients boosted the demand for healthcare packaging for pharmaceutical products in North America. Hence, the growth of the contract packaging market in North America surged in 2020. Furthermore, the initiation of mass COVID-19 vaccination drives in 2021 led to a rise in production activities in the healthcare and pharmaceutical industries, which, in turn, generated higher demand for contract packaging solutions. Therefore, such factors are expected to drive the growth of the market in North America during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Pharmaceutical Contract Packaging Market Scope |
|
Report Coverage |
Details |
Page number |
177 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 12.81% |
Market growth 2023-2027 |
USD 6,006.87 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
11.57 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
North America at 29% |
Key countries |
US, Canada, China, UK, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Amcor Plc, AmerisourceBergen Corp., AptarGroup Inc., Becton Dickinson and Co., Berlin Packaging LLC, Berry Global Group Inc., Bilcare Ltd., Catalent Inc., CCL Industries Inc., Constantia Flexibles Group GmbH, Datwyler Holding Inc., FedEx Corp., Gerresheimer AG, Jabil Inc., James Alexander Corp., KP Holding GmbH and Co. KG, Pharma Packaging Solutions, Precision Concepts International, SCHOTT AG, and WestRock Co. |
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, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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