Pharmaceutical Services Outsourcing Market Analysis, By Service (Consulting, Auditing & Assessment, Regulatory Affairs, Product Maintenance, Product Design & Development, Product Testing & Validation, Training & Education), And Segment Forecasts, 2018 - 2025

Industry Insights

The global pharmaceutical services outsourcing market was valued at USD 40.3 billion in 2015 and is expected to grow at a CAGR of 8.7% over the forecast period. Increasing competition within the healthcare drug manufacturers is one of the prime factor responsible for the growth of consulting services.

Strategic undertakings by pharmaceutical and biotech players such as new product launches, mergers & acquisitions (M&A) along with collaboration, regional expansion and others require consulting support. Moreover, outsourcing such projects to consultants saves cost and time, thereby helping the industry to grow. For instance, NSF International a certification organization is also a provider of these services which are in-sync with requirements for accreditation approval, thereby speeding the process.

U.S. biotechnology services outsourcing market by service, 2014 - 2025 (USD Billion)

Additionally, rising drug development cost coupled with higher failure rates and growing regulatory pressure also have a significant impact on market dynamics, accelerating the growth rate. Availability of well-established Clinical Research Organizations (CROs), regulatory outsourcing firms, management consulting firms, and contract manufacturers are catering to the complex demand of pharmaceutical and biotechnological sectors.

Recently, pharmaceutical industry witnessed numerous antitrust actions by government agencies and private plaintiffs. These litigations are related to patent infringements, quality issues, product failures, and pricing issues.

Despite of aforementioned complexities, there has been constant entry of new market players in past few years. Along with increasing number of emerging players, companies are undertaking following strategic initiatives to sustain in the fierce competition.

Another factor impacting growth is the rising regulatory pressure on industry players. In a survey conducted in 2012 by one of the prominent U.S. audit, tax, and advisory firm revealed that regulatory pressure is hindering the growth of pharmaceutical companies. For instance, out of 61 exploratory antibiotics, 26 were withdrawn from the market by the U.S. Food and Drug Authority (FDA) in 2013 due to safety reasons.

Services Insights

Consulting services comprising of regulatory compliance, remediation, quality management and other services held a significant share of about 20.0% in 2015. This dominion can be attributed to the increasing M&A activities, and constantly changing regulatory protocols and is expected to boost growth for the pharmaceutical services outsourcing market.

Moreover, pharma and biotech market have witnessed the continuous entry of new players. These players need to be compliant with set standards and norms, for which consulting is essential as these new entrants lack in such capabilities.

Global pharmaceutical services outsourcing market by service, 2015

Other services are inclusive of contract manufacturing, product upgrade and IT consulting. Increased focus on generic medicine accelerates the contract manufacturing which is anticipated to govern the lucrative CAGR of other services over the forecast period

Regional Insights

North America held more than 50.0% share for the pharmaceutical services outsourcing market in 2015. The presence of several multinational and local consulting firms in this region contributed towards the growth in this region.

Asia Pacific is anticipated to witness lucrative growth over the forecast period. Low cost of manufacturing and availability of qualified labor is likely to foster contract manufacturing in this region. Moreover, economic policy reforms in countries such as India and China are anticipated to create open and balanced economy, which presents ample opportunity for market players to invest in this region

Competitive Insights

Some of the key players operating in the pharmaceutical services outsourcing market include Quantic Group, QuintilesIMS, Parexel International Corporation, Lachman Associates, GMP Pharmaceuticals, Management Forum, Quality Context, Inspired Pharma, Concept Heidelberg GmbH, and RSSL.

Talent acquisition, regional expansion, service portfolio expansion, and competitive pricing are key strategic undertakings by these players. For instance, in April 2014, RSSL appointed a new head for the consultancy services. This was performed to boost the development of their business around consultancy.

Similarly, services such as training and education are also expected to gain momentum. The growing complexity is expected to lead to dicrepancies in understanding between the healthcare industry, and to help minimize the discrepancy, educating personnel is of utmost importance. For instance, NSF International, in February 2017 announced of their partnership with the Indian Drug Manufacturers’ Association (IDMA). As part of the agreement, NSF International will offer a customizable program for Pharmaceutical Quality Management (PQM) education in India.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth and provides an analysis on the latest trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the pharmaceutical services outsourcing market on the basis of service and region: 

• Service Outlook (Revenue, USD Million, 2014 - 2025)

  • Consulting

  • Auditing & assessment

  • Regulatory affairs

  • Product maintenance

  • Product design & development

  • Product testing & validation

  • Training & education

  • Others

• Regional Outlook (Revenue, USD Million, 2014 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • UK

  • Asia Pacific

    • Japan

    • China

  • Latin America

    • Brazil

    • Mexico

  • Middle East and Africa (MEA)

    • South Africa