Biotechnology And Pharmaceutical Services Outsourcing Market To Reach $107.96 Billion By 2030

Biotechnology And Pharmaceutical Services Outsourcing Market Growth & Trends

The global biotechnology and pharmaceutical services outsourcing market size is expected to reach USD 107.97 billion by 2030, according to a new report by Grand View Research, Inc. The market is expected to grow at a CAGR of 5.2% from 2024 to 2030. The COVID-19 pandemic has significantly impacted biotechnology and pharmaceutical third-party service providers as well as clinical trials, resulting in trial delays, suspensions, and terminations. The recovery from the pandemic has led to the increasing adoption of Machine Learning (ML)-based platforms, Artificial Intelligence (AI), automation in drug manufacturing, and innovative trial designs that are projected to transform the CRO and CMO landscape in the coming years.

With rising competitiveness, companies are concentrating on their core capabilities to maximize resources and foster innovation. Focus on their key competencies, such as the development and discovery of new medicines, by outsourcing non-core functions. As a result, several pharmaceutical companies collaborate with various outsourcing service providers for new drug development. For instance, in January 2022, HaemaLogiX, a developer of monoclonal antibodies entered into a partnership with Lonza to manufacture a myeloma drug candidate, KappaMab monoclonal antibody. Biopharmaceutical and pharmaceutical investments in novel and innovative therapies, for instance, regenerative medicine, are driving the R&D activity together with drug development services.

The high demand for biologics along with small molecules has led to the expansion of service portfolios of Contract Manufacturing Organizations (CMOs)/Contract Research Organizations (CROs) for biotechnology and pharmaceutical production. Small pharma/biotech companies are facing challenges while performing in-house development, manufacturing, regulatory affairs, product maintenance, product design, and development, product testing and validation, and training and education, such as a lack of substantial expertise and expensive capability. This, in turn, has created lucrative opportunities for the growth of CMOs and CROs. Contract services are growing and becoming strategic, targeted, and planned.

These factors are expected to play a pivotal role in enhancing the share of CMOs/CROs in the overall market. Growing pricing pressure, regulatory challenges, and patent expiration have led to shrinking margins in the biotech and pharmaceutical industry. Contract services are considered a “strategic competitive weapon” among companies, as these services help overcome these issues. These services offer cost savings to their clients as choosing sustainable suppliers could lead to reduced costs in the long run. They also help save time utilized in the operations and management of a production and research facility. Contract research and manufacturing allow low-cost product development and the manufacturing cost of a product.

Furthermore, outsourcing services assist in overcoming trade barriers and facilitate the entry of firms into the foreign market. Owing to these advantages, several firms choose to outsource services rather than invest capital in production equipment and hiring skilled labor. Furthermore, several key entities in the market are undertaking various strategic initiatives, such as partnerships, service launches, mergers, and acquisitions, to expand their services in the market. For instance, in April 2022, LabCorp, the parent company of Covance, collaborated with a developer of cell and gene therapy technologies, Xcell Biosciences, to expand its research capabilities in cell and gene therapies. Under this agreement, Labcorp and Xcellbio would collaborate on projects aimed at improving the efficacy & safety of cell and gene therapies.

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Biotechnology And Pharmaceutical Services Outsourcing Market Report Highlights

• The consulting segment is expected to dominate the market with a share of 19% in 2023 owing to a rise in the number of fraudulent cases, discrepancies in intellectual property rights, and a rise in technological innovations

• Based on service, the others segment is expected to witness the highest CAGR of 6.1% over the forecast period owing to the increasing focus on generic and biosimilar in developing regions

• The pharma segment is expected to witness a CAGR of 5.4% over the forecast period as the pharmaceutical companies outsource internal activities at a larger scale due to rising pricing pressure, and growth of generics in the industry

• On the other hand, the biotechnology segment held a significant share of the market. This is due to the expanding biotech product pipelines

• North America dominated the market and accounted for the largest revenue share of 53% in 2023 due to the presence of a large number of biotechnology and pharmaceutical companies and the quality of services offered by the CROs and CMOs in the region

• In Asia Pacific, the market is anticipated to register the highest CAGR of 5.6% over the forecast period owing to improved regulatory frameworks, high scope for cost savings, and the presence of cheap skilled personnel

• The key players in the market undertaking several strategic initiatives to strengthen their market presence. For instance, in February 2023, Elektrofi, a biotech company specializing in advanced drug delivery solutions, entered into a contract manufacturing agreement with Thermo Fisher Scientific. This collaboration will leverage Thermo Fisher Scientific’s expertise in contract manufacturing services to support Elektrofi's drug delivery technology

Biotechnology And Pharmaceutical Services Outsourcing Market Segmentation

Grand View Research has segmented the global biotechnology and pharmaceutical services outsourcing market based on service, end-use, and region:

Biotechnology & Pharmaceutical Services Outsourcing Service Outlook (Revenue, USD Million, 2018 - 2030)

• Consulting

  • Regulatory Compliance

  • Remediation

  • Quality Management Systems Consulting

  • Others

• Auditing & Assessment

• Regulatory Affairs

  • Clinical Trial Applications & Product Registration

  • Regulatory Writing & Publishing

  • Legal Representation

  • Others

• Product Maintenance

• Product Design & Development

• Product Testing & Validation

• Training & Education

• Others

Biotechnology & Pharmaceutical Services Outsourcing End-use Outlook (Revenue, USD Million, 2018 - 2030)

• Pharma

• Biotech

Biotechnology & Pharmaceutical Services Outsourcing Regional Outlook (Revenue, USD Million, 2018 - 2030)

• North America

  • U.S.

  • Canada

• Europe

  • UK

  • Germany

  • France

  • Italy

  • Spain

  • Denmark

  • Sweden

  • Norway

• Asia Pacific

  • India

  • China

  • Japan

  • Australia

  • Thailand

  • South Korea

• Latin America

  • Brazil

  • Mexico

  • Argentina

• Middle East & Africa

  • South Africa

  • Saudi Arabia

  • UAE

  • Kuwait

List of Key Players in the Biotechnology And Pharmaceutical Services Outsourcing Market

• Parexel International Corp.

• The Quantic Group

• IQVIA

• Lachman Consultant Services, Inc.

• GMP Pharmaceuticals Pty Ltd.

• Concept Heidelberg GmbH

• Covance Inc.

• Charles River Laboratories

• PRA Health Sciences

• ICON plc