CDMO Market

Global CDMO Market Size (2024 to 2029)

The global CDMO market is anticipated to grow to USD 247.9 billion by 2029 from USD 143.7 billion in 2024, registering a CAGR of 11.52% during the forecast period.

The complexity of the manufacturing process and the requirements and lack of in-house drug manufacturing capabilities of many pharmaceuticals are pushing them towards CDMOs. Additionally, CDMOs also ensure all the steps of the manufacturing process from formulation, analytic services, bending, coating, converting, packaging, serialization, and shipment. Every step of the process is taken care of by the company. The CDMOs allow for faster FDA approvals, clinical trials, API production, and commercial maximizations. Furthermore, the continuous mergers and acquisitions of the CDMOs with small pharma and biotech companies and firms, along with life-science companies to increase their reach and regional expansion, are leading the market to grow. In addition, the increase in investments, research, and developments in the field leads to market growth. For instance, cordenpharma announced the strategic acquisition of €3.7 million in October 2017.

MARKET DRIVERS

The growing patient population with chronic diseases and the rising need for pharmaceuticals are expected to drive CDMO market growth.

Due to the growing population and the increasingly sedentary lifestyle, there is a rise in the number of chronic diseases around the world. In addition, the ever-increasing geriatric population worldwide is increasing the need for better pharmaceutical needs, and the simplification of the drug manufacturing process by the CDMOs is boosting the market for these companies. The demand for biologics and rising non-communicable diseases are propelling the market growth. 

In addition, the expansion of the pharmaceutical industry in emerging markets, growing R&D spending by pharmaceutical companies, shorter drug development timelines, rising need for flexible manufacturing capabilities and reduction in overall development and manufacturing costs contribute to the CDMO market growth. Technological advancements in pharmaceutical manufacturing, rising emphasis on personalized medicine, growing demand for innovative drug delivery systems, an increasing number of partnerships and collaborations between CDMOs and pharmaceutical companies and stringent regulatory requirements for drug approval support the growth of the CDMO market.

Furthermore, the rising focus on quality and safety standards, an increasing number of small and mid-sized pharmaceutical companies, growing demand for gene and cell therapy and growing outsourcing of clinical trials favor the growth rate of the CDMO market.

MARKET RESTRAINTS

The market is expected to be hindered by small-scale CDMOs that lack the state-of-art equipment needed to provide quality drug manufacturing services along with the stringent regulations of the drug, small molecules, and biologics approvals by the government, especially in developing economies, and the pricing challenges that small scale companies may face. Limited funding is another key roadblock to the growth rate of the CDMO market. Furthermore, the scarcity of skilled workforce and competition from low-cost countries such as India and China inhibit the growth rate of the CDMO market.

Impact of COVID-19 on the global CDMO market

The pandemic has had a positive impact on the global CDMO market. During the COVID-19 pandemic, CDMOs were direct aid to the pharmaceutical sector and grew more significant in business. The CDMOs have received large-scale COVID-19 contracts and have partnered with several COVID-19 vaccine manufacturing companies, which accelerated the growth rate of the CDMO market. The CDMOs that provide sterile fill and finish facilities have significantly advanced due to the pandemic. Since the advent of the COVID-19 pandemic, countries worldwide have started manufacturing their APIs (active pharmaceutical ingredients) with the help of CDMOs. The increased medication demand and the supply of booster doses for COVID-19 by CDMOs made the market prosper. Even after the pandemic, the aftereffects like increased need and awareness for proper medication in healthcare systems are expected to improve market statistics further.

REPORT COVERAGE

SEGMENTAL ANALYSIS

Global CDMO Market Analysis By Service

The active pharmaceutical manufacturing services segment accounted for the largest share of the global CDMO market in 2023 and is anticipated to record a significant share during the forecast period. The increasing number of biological APIs in the pipeline stage and expanding usage of API biologics in various medicines are boosting segment growth. 

The production of solid dosage forms, injectables, and other items falls under the finished product manufacturing segment's further classification. After API manufacturing, the finished products segment had the second-largest share. Due to the rising demand for injectables and preference for injectable delivery systems like prefilled syringes and autoinjectors for administering biologics and biosimilars, the injectables segment in the finished product manufacturing segment is predicted to experience significant growth during the forecast period.

Discovery, preclinical, clinical, and laboratory services comprise the clinical research organization (CRO) category. The CRO segment is expected to be dominated by clinical trial services throughout the forecast period. The increased demand for efficient treatments and the growing number of goods under development are related to this. The need for clinical trial services is also projected to increase due to rising R&D spending and expanding cooperation among top pharmaceutical companies to outsource clinical trials, which will further boost the growth of the CDMO market. During the forecast period, a moderate increase in the packaging segment is anticipated.

REGIONAL ANALYSIS

Geographically, North America accounted for the largest share of the global CDMO market in 2023 and is anticipated to continue leading worldwide throughout the forecast period. The advanced healthcare sector availability, long-standing CDMO, and favorable reimbursement policies are boosting market growth. In addition, expanding partnerships between pharmaceutical firms and CDMOs providing a wide range of services are to blame for the region's leading market share globally. The largest drug market in the world, with over half of all R&D spending in the biotechnology and pharmaceutical industries, is the United States. As a result, CMOs is a crucial player in this industry and has invested in new infrastructure and technology to support a variety of outsourcing units. The U.S. led the CDMO market in North America in 2022 and is anticipated to continue to dominate throughout the forecast period. Factors such as the growing demand for advanced pharmaceutical products and therapies due to the rising prevalence of chronic diseases and an aging population majorly propel the U.S. market growth. In addition, the growth of the U.S. market is also driven by factors such as the increasing preference from the pharmaceutical and biopharmaceutical companies to use CDMO services due to the benefits associated such as cost reduction and increased efficiency of drug development, rising number of strategic partnerships between CDMOs and pharmaceutical companies, advancements in technology and manufacturing processes and rising focus on R&D activities by pharmaceutical companies. Canada is another lucrative regional market in North America for CDMO services and is predicted to register a healthy CAGR during the forecast period.

Europe accounted for a substantial share of the worldwide market in 2023 and is expected to grow at a notable CAGR during the forecast period. Factors include the growing demand for outsourcing services in the pharmaceutical industry, rising emphasis on R&D activities by biopharmaceutical companies, favorable government initiatives and policies promoting the growth of CDMOs by the European countries and growing investments in the biopharmaceutical industry majorly propel the growth of the European CDMO market. Technological advancements and innovations in the biopharmaceutical industry, the growing prevalence of chronic diseases and the rising demand for personalized medicine further contribute to the growth rate of the European market. The growing number of contract manufacturing agreements and partnerships and the rising trend of Mergers and Acquisitions in the CDMO industry are anticipated to have a favorable impact on the growth of the European market during the forecast period. Switzerland, Germany and the UK accounted for the major share of the European market in 2022. Countries such as Ireland and Denmark are anticipated to account for a considerable share of the European market during the forecast period owing to the favorable regulatory environment, availability of skilled workforce and favorable initiatives by the governments.

The Asia Pacific is anticipated to grow at a higher CAGR during the forecast period. The regional market growth is driven owing to the improving healthcare sector and supportive government policies. On the other hand, the low manufacturing and R&D costs and highly qualified workforces strengthen the regional market growth. As a result, the firms are turning to research-based partnerships to grow drug discovery and manufacturing investments in Asia, in addition to utilizing the advantages of a site in Asia through internal investment. For example, one of China's fastest-growing pharmaceutical companies is Huapont, a professional maker of dermatology and anti-tuberculosis medications that relies primarily on R&D and market expansion. Due to their R&D and complicated manufacturing skills, CROs/CMOs can use their knowledge to meet the needs of big generic pharmaceutical and biotech firms.

Latin America captured a considerable share of the global CDMO market in 2023 and is estimated to grow at a steady CAGR during the forecast period. The growing investments from global pharmaceutical companies in the Latin American region due to lower labor and operational costs compared to other regions is one of the major factors driving the Latin American market growth. Rising demand for contract manufacturing services from local biotech and pharmaceutical companies in the Latin American region, the presence of favorable government initiatives and policies that promote the growth of the pharmaceutical and biotech industries in the Latin America region and increasing demand for generic drugs due to the increasing prevalence of chronic diseases further boost the growth rate of the Latin American market. Among the various countries of Latin America, Mexico is anticipated to lead the market during the forecast period. Factors such as the presence of a well-established pharmaceutical industry, increasing R&D investments, government initiatives to promote the growth of the pharmaceutical sector and a large pool of skilled workforce majorly drive the Mexican market. On the other hand, Brazil, Argentina, Colombia and Chile are expected to register healthy growth during the forecast period.

MEA occupied a moderate share of the global market in 2023 and is expected to register a healthy CAGR in the coming years.

KEY PLAYERS IN THE GLOBAL CDMO MARKET

Metrics, AMRI, Famar, WuXi AppTech, Asymchem, Porton, Lonza, Catalent, Patheon, Siegfried, Recipharm, Strides Shasun, and Piramal are a few of the notable players in the global CDMO market.

RECENT HAPPENINGS IN THIS MARKET

• In July 2022, a modification to the license and supply agreement between Societal CDMO and Lannett Company for marketing Verapamil PM and Verelan SR products was signed. Societal CDMO is a contract development and manufacturing organization (CDMO) that specializes in small molecule development and manufacturing. In addition to a 10% rise in the profit share portion of revenue from sales of Verapamil PM products, society will now experience both immediate and planned price increases in production. Additionally, Societal receives prospective new GMP manufacturing agreements for injectable medications for numerous additional Lannett development projects under the amendment.
• In June 2022, with the development of its plant in Verona, close to Madison, WI, MilliporeSigma, the U.S. and Canada Life Science business of Merck KGaA, has doubled its capacity to produce high-potent active pharmaceutical ingredients (HPAPI). The 70,000-square-foot, $65 million complexes will create 50 new employees in the neighborhood.

DETAILED SEGMENTATION OF THE GLOBAL CDMO MARKET INCLUDED IN THIS REPORT

This research report on the global CDMO market has been segmented and sub-segmented based on the service and region.

By Service

• CMO
  • Finished Product Manufacturing
    • Injectables
    • Solid Dosage Forms
    • Others (Semisolids/Liquid, Powder)
  • API Manufacturing
  • Packaging
• CRO
  • Preclinic
  • Clinic
  • Laboratory Services
  • Discovery

By Region

• North America
• Europe
• Asia-pacific
• Latin America
• Middle East and Africa