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Regions studied under this global pharmaceutical contract manufacturing market report are North America, Europe, Asia-Pacific, Latin America, Middle East and Africa.
As per the report published by Market Data Forecast, the size of the global pharmaceutical contract manufacturing market is estimated to grow to USD 161.72 billion by 2026 from USD 109.96 billion in 2021, showcasing a CAGR of 8.02% from 2022 to 2027.
Pharmaceutical contract manufacturing refers to the production of drugs on a contract basis. Large pharmaceutical organizations employ contract manufacturers to provide the necessary materials and equipment to produce various drugs. The organizations pay the contract manufacturers for their goods. Contract manufacturers help pharma companies avoid any mistakes and losses during drug production, and they also assist with outsourcing drugs. These third-party service providers also help with drug legalization and approval. Therefore, escalated demand for pharmaceutical advancements and global outreach of pharmaceuticals support the market's growth.
The COVID-19 pandemic has increased various companies' R&D and manufacturing efforts to develop and distribute vaccines and drugs against the SARS-CoV-2 virus. Such vaccine-related research activities in pharmaceutical and biotechnology companies, research centers, and academic research institutes have played a vital role in the operations and production of various products. Many pharmaceutical and biotech companies are currently partnering with CROs and CDMOs with agreements, partnerships, and collaborations to increase work efficacy and cost-effectiveness. The market is expected to grow with improved market demand and developments during the forecast period.
Factors such as rising demand for biologic therapies, increasing emphasis on personalized drugs, growth in nuclear drugs, growing population, and advancements in cell and gene therapies are primarily expected to boost the global pharmaceutical contract manufacturing market during the forecast period. In addition, the market is further estimated to witness positive growth during the forecast period due to the growing number of U.S. FDA-approved manufacturing facilities, presence of skilled labor, and low operating costs while selecting a partner for outsourcing.Moreover, there is high demand for improvement in quality healthcare services and expenditure, which are also anticipated to contribute to the market's growth. According to World Bank statistics, the GDP across the globe had increased from 9.08% in 2001 to 9.84% in 2018, while the expenditure on health per capita has increased from $493 in 2001 to $1,110.88 in 2018. This is coupled with the growing focus on many pharmaceutical companies for production processes and drug R&D.The complexity of biopharmaceutical services and highly personalized medical devices and therapies drive greater complexity in supply chain operations and leads to greater reliance on contract manufacturing. In addition, other factors such as the expiration of patents of major therapeutic brands, growing demand for generic drugs, and adoption of new manufacturing technologies such as CROs and CMOs positively influence this market.
However, the market participants mainly face many challenges during the manufacturing process, such as labeling, packaging, sterilization, and delivery and supply issues. Moreover, the lack of process knowledge can lead to a faulty product line and affect the market. In addition, differences in trade policies between various countries are expected to challenge the market's growth rate.
KEY MARKET INSIGHTS:
SEGMENTS ANALYZED IN THIS REPORT:
The manufacturing segment is expected to dominate the market during the forecast period due to the high demand for API and especially for HPAPI (High Potency Active Pharmaceutical Ingredient). In addition, the demand for bulk drugs due to increasing research and development among key market players are driving the growth of the market.
The finished dose formulations segment is also expected to have significant growth during the forecast period due to the growing outsourcing of powdered finished doses. The solid formulations segment is expected to dominate the market due to their advantages, like options for oral ingestion and the choice to control the dosage of drugs administered to the patient.
The big pharmaceutical companies are expected to dominate the market during the forecast period due to many giants opting for outsourcing to avoid mistakes during production, leading to financial losses along with assistance provided for broadly spread businesses. Moreover, managing operations and R&D becomes a difficult task when the involved organizations are spread across various regions, therefore, needing the assistance of CROs.
However, in recent times small and medium pharmaceuticals are also opting for outsourcing to avoid revenue loss.
North America is expected to have the highest share in the market during the forecast period due to a high number of clinical trials, substantial healthcare funding, an increase in vendors, growing drug discovery and development, a large supply of active pharmaceutical ingredients, an increase in partnerships and collaborations, modern manufacturing capabilities, raising brand awareness, and the presence of major pharmaceutical companies in countries like the U.S., and Canada.
Asia-Pacific is expected to have significant growth during the forecast period due to the prevalence of pharmaceutical corporations, the scale of generic medication producers, the rapid economic development of many nations, the rise in the number of businesses outsourcing projects, Increasing manufacturing capacities, a growing scientific base and capability, an aging population, significant investments by Asian CMOs, low labor and manufacturing costs, and investors from nations like China, India, and Singapore are the primary services provided by the majority of CMOs operating in the region.
Europe is also expected to witness growth due to the expanding gap between supply and demand, the abundance of clinical trials in the area, the accessibility of a qualified workforce, the sizeable API production base, the favourable government regulations, the presence of important companies in nations like the U.K., France, Germany, etc.
Recent Market Developments:
In January 2022, Gland Pharma, a pharmaceutical company, announced on Friday that it has signed a deal with FPCI Sino French Midcap Fund to buy the entire investment in Cenexi Group, a company established in Europe. In accordance with the terms of the put option agreement signed in November of last year, Gland Pharma International PTE, a wholly owned subsidiary of the business domiciled in Singapore, has entered into a share purchase agreement with FPCI Sino French Midcap Fund to acquire the whole shareholding in Cenexi.
In January 2023, Isao Teshirogi, president and chief executive officer of Japanese pharmaceutical company Shionogi, said in an interview with Nikkei that the company will examine how it acquires raw materials for its oral COVID-19 medicine Xocova in an effort to reduce its reliance on China.
The company now gets all of the synthetic chemicals needed to create the medication from China, but it has started to think about getting the supplies from Japan and India.
In January 2022, JB Chemicals & Pharmaceuticals (JB Pharma) has reduced the cost of a medication for critical heart failure by 50%. This would make the medication for heart patients more accessible and cheap by lowering the monthly cost from Rs 4,500 to Rs 2,200. JB markets the proprietary Sacubitril-Valsartan compound under the name Azmarda.
In December 2022, As part of its strategy to establish India as a global leader in contract medicine manufacturing, Advent International and the Jasti family, who are the company's promoters, reached an agreement on Monday to buy 50.1% of Suven Pharmaceuticals Ltd. for a total of Rs. 6,313 crore.