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Global Pharmaceutical Contract Manufacturing Market Size, Share, Trends, COVID-19 Impact & Growth Analysis Report – Segmented By Service, End-User & Region (North America, Europe, APAC, Latin America, Middle East and Africa) – Industry Forecast (2023 to 2028)

Published: March, 2023
ID: 12521
Pages: 190
Formats: report pdf report excel report power bi report ppt

Global Pharmaceutical Contract Manufacturing Market Size (2023 to 2028)

The global pharmaceutical contract manufacturing market was worth USD 109.96 billion in 2022 and grow at a CAGR of 8.02% from 2023 to 2028. The global pharmaceutical contract manufacturing market is predicted to be USD 174.68 billion by 2028 from USD 118.77 billion in 2023.

The process of a company producing products under the label or brand of another company is known as contract manufacturing. Contract manufacturers provide this service to a range of enterprises based on their designs, formulas, and specifications or their customers. The pharmaceutical industry dominates contract manufacturing. Contract manufacturing contributes significantly to the outsourcing market because of its popularity and extensive adoption by pharmaceutical businesses. However, cost containment difficulties resulting from global economic limits have put a lot of pressure on pharmaceutical companies to lower product costs. As a result, pharma companies seek ways to cut manufacturing costs to get out of this dilemma. As a strategic alternative, contract manufacturing provides several advantages, including cost savings, increased product quality, a broader product variety, and a shorter time to market.

Impact of COVID-19 on the global pharmaceutical contract manufacturing market:

The current COVID-19 outbreak has impacted the healthcare industry, and this pandemic has positively affected the global pharmaceutical contract manufacturing market. The outbreak has sparked a surge in pharmaceutical demand, spurring the development of corona-related vaccinations, antiviral vaccines, antibody treatment, and various other pharmaceutical goods. Pharmaceutical companies have been urged to use contract development and manufacturing firms to stay afloat for pharmaceutical research and production. Companies have increased their R&D and manufacturing efforts to develop and deliver vaccines and treatments against the SARS-CoV-2 virus due to the COVID-19 pandemic. Vaccine-related research in pharmaceutical and biotechnological companies, research centers, and academic research institutes is considered critical, and operations and output have been largely unaffected. Several pharmaceutical and biotechnology businesses joined with CROs and CDMOs through long-term agreements, partnerships, and collaborations worldwide to speed up the R&D and manufacturing process.

MARKET DRIVERS:

The growing preference from pharmaceutical companies to outsource their manufacturing activities is primarily driving the pharmaceutical contract manufacturing market.

The trend of pharmaceutical companies increasingly preferring CMOs to outsource their manufacturing activities has seen a spike in the recent past. By outsourcing, pharmaceutical companies can emphasize their core competencies, such as R&D, drug discovery, and others. In addition, pharmaceutical companies gain advantages such as reduced operating costs, improved efficiency, and increased flexibility by outsourcing their manufacturing activities. Due to this, the adoption of these services is growing considerably among pharmaceutical companies. Cost savings associated with outsourcing manufacturing activities to pharmaceutical companies is another major factor fuelling the market’s growth rate. With outsourcing their manufacturing activities, pharmaceutical companies do not need to invest hefty amounts in purchasing manufacturing equipment, developing required infrastructure, and hiring and training human resources for manufacturing activities. This enables pharmaceutical companies to keep their focus on their core competencies and invest financial resources more efficiently.

The worldwide pharmaceutical industry is growing rapidly owing to addressing the growing burden of various diseases, especially chronic diseases and the increasing aging population.

The growth in the global pharmaceutical industry is anticipated to favor the growth rate of the pharmaceutical contract manufacturing market, as pharmaceutical companies are keen on increasing production capacities to meet the growing consumer demand for pharmaceuticals. Regulatory compliance is another major factor potentially helping the pharmaceutical contract manufacturing market grow further. The pharmaceutical industry is highly regulated, and pharmaceutical manufacturers must produce drugs complying with the regulations imposed, which is a complex task. The contract manufacturers hold extensive experience with regulatory compliance and help the pharmaceutical companies have the manufacturing complying the regulatory requirements, which is another major factor contributing to the growth of the pharmaceutical contract manufacturing market.

Furthermore, the rapid adoption of technological advancements in the manufacturing activities of pharmaceuticals is anticipated to support the market’s growth rate. The face of the pharmaceutical industry is continuously changing, and advanced technologies are playing a vital role in it. Recently, many innovative technologies and production methods have been developed. As a result, contract manufacturers are quickly adopting the latest technologies that can be used in manufacturing activities, being up to date with market trends, and providing cutting-edge services to pharmaceutical companies.

MARKET RESTRAINTS:

Conversely, the stringent regulatory environment and quality standards that contract manufacturers must follow while manufacturing is one of the major challenges to the pharmaceutical contract manufacturing market. Failing to match the regulations and standards results in delays, product recalls, and other penalties that can significantly negatively impact contract manufacturing companies. In addition, intellectual property rights are one of the major concerns of pharmaceutical companies. Contract manufacturing companies must take good care of the intellectual property rights of their clients and provide high-quality products simultaneously, which is one of the major challenges to contract manufacturing companies. Capacity constraints are showcasing a negative impact on the overall growth of the pharmaceutical contract manufacturing market. Usually, contract manufacturing companies work at full capacity or near full capacity to deliver the promised results to their clients. In such situations, they can undertake any new projects as the full capacity has already been used for the existing clients, which is expected to limit the market’s growth rate. Furthermore, the cost pressure that contract manufacturers are facing in the market to deliver high-quality products at competitive prices is another notable factor hindering market growth.

REPORT COVERAGE:

REPORT METRIC

DETAILS

Market Size Available

2022 to 2028

Base Year

2022

Forecast Period

2023 to 2028

Segments Covered

By Service, End-User & Region

Various Analyses Covered

Global, Regional & Country Level Analysis, Segment-Level Analysis, Drivers, Restraints, Opportunities, Challenges; PESTLE Analysis; Porter’s Five Forces Analysis; Competitive Landscape, Analyst Overview of Investment Opportunities

Regions Covered

North America, Europe, Asia Pacific, Latin America, the Middle East, and Africa

 

This research report on the global pharmaceutical contract manufacturing market has been segmented based on service, end-user, and region.

Pharmaceutical Contract Manufacturing Market – By Service:

  • Manufacturing
    • API/Bulk Drugs
    • Advanced Drug Delivery Formulations Packaging
    • Packaging
    • Finished Dose Formulations
      • Solid Formulations
      • Liquid Formulations
      • Semi-solid Formulations
  • Research
    • Oncology
    • Vaccines
    • Inflammation & Immunology
    • Cardiology
    • Neuroscience
    • Others

During the forecast period, the manufacturing segment is anticipated to have the largest share of the global pharmaceutical contract manufacturing market. The growing interest in outsourcing and increasing awareness among pharmaceutical companies with advantages such as cost savings, increased flexibility, and access to specialized expertise with outsourcing their manufacturing activities are primarily propelling segmental growth. Under the sub-segments, the finished dose formulations segment is predicted to witness the fastest CAGR over the forecast period.  The growing demand for finished dose formulations is majorly driving segmental growth. In addition, the growing aging population and the increasing patient population suffering from chronic diseases who require long-term drug therapy are promoting the segment's growth rate. On the other hand, owing to the increased outsourcing of powdered formulations, the solid dosage forms segment is anticipated to grow gradually during the forecast period.

Pharmaceutical Contract Manufacturing Market – By End-User:

  • Big Pharmaceutical Companies
  • Small & Medium-Sized Pharmaceutical Companies
  • Generic Pharmaceutical Companies
  • Other End Users

Based on end-user, the big pharmaceutical companies segment is estimated to account for the largest share of the global pharmaceutical contract manufacturing market during the forecast period. The big-sized pharmaceutical companies have to do the manufacturing at a large scale. Though these companies have the required resources in terms of finances and equipment for these manufacturing by themselves, they depend on CMOs for manufacturing activities to focus on their core competencies. For large-sized pharmaceutical companies, CMOs help in the manufacturing activities to mass produce their drugs to meet the growing consumer demand. In addition, by outsourcing their manufacturing activities, big-sized pharmaceutical companies can shift their focus towards R&D and drug discovery.

Pharmaceutical Contract Manufacturing Market – By Region:

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

Geographically, the North American region captured the largest share of the worldwide market in 2022, and the region’s dominance is expected to continue during the forecast period. The growth of the North American market is primarily driven by growing healthcare spending, the presence of key market participants, and the rising demand for pharmaceuticals. The recent COVID-19 pandemic has boosted the growth of the North American market. During the COVID-19 pandemic, the North American governments have offered significant financial resources and support to accelerate the production of COVID-19 drugs. The U.S. market occupied the major share of the North American market, followed by Canada, and this trend is likely to continue throughout the forecast period.

The European market is estimated to witness a promising CAGR during the forecast period. The growing consumption of generic drugs among the European population and increasing adoption of contract manufacturing by the pharmaceutical companies of generic drugs are promoting the European regional market. In addition, favorable government policies and increasing spending on R&D by large-sized pharmaceutical companies in Europe are propelling the growth rate of the regional market. Furthermore, the growing number of small and medium-level biotechnology companies in the European region that do not have the potential to do their own manufacturing prefer CMOs for manufacturing needs, resulting in the growth of the European market. During the forecast period, Germany, the UK, France, and Italy are predicted to hold a major share of the European market due to the growing outsourcing trend by pharmaceutical companies, the presence of sophisticated healthcare systems, and increasing investments in the pharmaceutical industry in these countries.

The APAC market is predicted to witness notable growth worldwide during the forecast period. APAC has largely populated countries such as India and China, and this growing population demands greater production of drugs to address the increasing need, propelling the regional market. In addition, the increasing healthcare expenditure across the APAC region is expected to contribute to the growth of the APAC pharmaceutical contract manufacturing market. In 2022, China and India held the major share of the APAC market and the trend is anticipated to continue in the coming years. China and India are lucrative countries for the CMOs to set up their manufacturing facilities as these countries can offer cost-effective labor and manufacturing costs. Other countries such as Japan, South Korea, and Australia are anticipated to project a healthy CAGR.

The Latin American market is anticipated to occupy a considerable global market share during the forecast period. The rising demand for cost-effective drugs is majorly propelling the Latin American market. Countries such as Mexico and Brazil are playing a key role in Latin America and are anticipated to capture the major share of the regional market during the forecast period.

The MEA market is expected to grow moderately during the forecast period. The growing need for pharmaceutical products in MEA is one of the major factors driving the market growth. The Gulf Cooperation Council (GCC) countries are expected to hold the major share of the MEA market during the forecast period.

KEY MARKET PARTICIPANTS:

Catalent, Pharmaceutical Product Development LLC, AbbVie, Baxter BioPharma Solutions, Patheon, Grifols International, S.A., Dalton Pharma Services, Boehringer Ingelheim Biopharmaceuticals GmbH, and Lonza AG are a few of the noteworthy companies operating in the global pharmaceutical contract manufacturing market profiled in this report.

RECENT HAPPENINGS IN THIS MARKET:

  • Samsung BioLogics (South Korea) and Kineta (US) signed a Development and Manufacturing Agreement for Anti-VISTA Antibody Immunotherapy in 2021.
  • Lonza Group (Switzerland) and Aruvant Science (US) signed an agreement in 2021 to conduct process development (one-time experimental gene therapy—ARU-1801) for sickle-cell treatment in the United States.
  • Fujifilm Diosynth Biotechnologies selected Holly Springs, North Carolina, as the location for its new JPY 200 billion large-scale cell-culture biomanufacturing facility in March 2021.
  • Skeletal Therapy Support was bought by Catalent (US) in 2020. As part of the arrangement, Catalent provided clinical material for Bone Therapeutics' ALLOB, an allogeneic osteoblastic cell therapy product.
  • Six Indian generics manufacturers have signed agreements of intent with the Mexican state of Hidalgo to build a pharma center for manufacturing and logistics in October 2020. As a result, Dr. Reddy, Zydus Cadila, Glenmark, Torrent, and Hetero, among others, have access to a USD 10.8 billion Mexican pharma market.

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FAQ's

How much is the global pharmaceutical contract manufacturing market going to be worth by 2028?

As per our research report, the global pharmaceutical contract manufacturing market size is projected to be USD 174.68 billion by 2028. 

Which region is growing the fastest in the global pharmaceutical contract manufacturing market?

Geographically, the North American pharmaceutical contract manufacturing market accounted for the largest share of the global market in 2022. 

At What CAGR, the global pharmaceutical contract manufacturing market is expected to grow from 2023 to 2028?

The global pharmaceutical contract manufacturing market is estimated to grow at a CAGR of 8.02% from 2023 to 2028. 

Does this report include the impact of COVID-19 on the pharmaceutical contract manufacturing market?

Yes, we have studied and included the COVID-19 impact on the global pharmaceutical contract manufacturing market in this report. 

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