The global healthcare contract development and manufacturing organization market size was valued at USD 217.6 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 9.2% from 2022 to 2030. An increase in uptake of outsourcing services by pharmaceutical companies and growth in R&D investments are expected to drive the market. Medical devices & pharmaceutical companies are outsourcing low-end services to reduce the overall cost of production. This trend is expected to contribute to the growth of the market for healthcare contract development and manufacturing organization (CDMO), in the forecast period. The presence of end-to-end service providers that offer value-added services for an integrated or risk-sharing business model is expected to bolster market growth.
The COVID-19 pandemic has significantly impacted the global economy in 2020 and has had an ongoing impact on various industries. However, the market for healthcare contract development and manufacturing organization (CDMO) witnessed a positive impact due to this pandemic. CDMOs are playing an important role in meeting the needs of pharmaceutical companies, biotech companies, and other end-users during this crisis. For instance, Lonza signed a 10-year manufacturing contract with Moderna for manufacturing the COVID-19 vaccine. CDMO players are offering pharma, biotech, and other end-user companies cost-efficiency, time-saving, and specialized expertise. The rapid rise in demand for COVID-19 vaccines and therapeutics is propelling the IND CDMO market. Even post-pandemic, the future seems upright for the IND CDMO market owing to the robust drug pipeline of pharmaceutical and biotech companies.
According to the 2019 PhRMA member annual survey, pharmaceutical companies invested USD 79.6 billion in R&D. As the healthcare industry is undergoing a process of dynamic change, factors such as rapid technological advancements (e.g., automation & artificial intelligence), the need for CROs/CMOs/CDMOs, and rising investments in research are influencing the healthcare market. Outsourcing activities are befitting many pharmaceutical companies in improving operational efficiencies, expanding geographical presence, decreasing resource costs, gaining therapeutic expertise, and enhancing on-demand services. Medical device companies are focusing on emerging countries to gain access to newer markets and increase their revenues. OEM consolidation has also boosted the overall medical devices contract manufacturing market.
For pharmaceutical companies, increasing R&D costs is a challenge, which significantly affects their bottom line therefore they have partnered with CROs & CMOs for integrated outsourcing services. Outsourcing research activities to CMO or CDMO helps accelerate the workflow of companies, provide unique specialized services, decrease drug development costs, and provide the expertise & experience needed for assisting research.
For many pharmaceutical companies, innovations and speed-to-clinic factors are of critical importance. Small companies and specialty pharmaceutical players increasingly rely upon delivering these important requirements within the industry. Many CROs and CDMOs promote themselves as one-stop-shop companies. The one-stop-shop service model is where a CRO handles everything from API to dosage form and early development to commercialization. To provide these services, a CDMO must have a wide range of enabling technologies and specialized handling capabilities to address specific problem statements. Although these services address many problem statements, there is a wide range of product design capabilities among CDMO players that can be critical in scaling a product concept and bringing it to the market.
The contract manufacturing segment dominated the market for healthcare contract development and manufacturing organization and accounted for the largest revenue share of 73.4% in 2021. This is majorly due to the high penetration of the contract manufacturing segment in the pharmaceutical and medical devices industry. Based on services, the market for healthcare contract development and manufacturing organization is divided into contract development and contract manufacturing segments.
Global pharmaceutical and biotech companies are increasingly outsourcing drug development activities to CROs and academics as a strategy to stay competitive and flexible in a world of increasingly sophisticated technologies, exponentially growing knowledge, and an unstable economic environment. The contract development offers several benefits over in-house development of drugs, such as access to industry experts, less time to market, cost-effectiveness, and more focus on core competencies.
The growing trend of outsourcing, increasing use of medical devices due to the rising prevalence of various chronic diseases, and the complexity of manufacturing devices are driving the market for healthcare contract development and manufacturing organization. Contract manufacturing is further sub-segmented into API/bulk drugs, finished dose formulations, and medical devices. In the contract manufacturing segment, the medical device segment accounted for the largest revenue share of 50.0% in 2021 in the market for healthcare contract development and manufacturing organization. The medical device segment is further sub-segmented into Class I, Class II, and Class III devices. Access to advanced manufacturing technologies, cost-effectiveness, and the increasing number of CMOs are some major factors positively affecting the market growth.
North America dominated the healthcare contract development and manufacturing organization market and held the highest revenue share of 41.0% in 2021, which is attributed to the presence of advanced medical infrastructure, lower costs, and the growing demand for medical devices in the region. The growth of the pharmaceutical industry further propelled the demand for contract development and manufacturing in the region. Hence, North America’s market is expected to experience lucrative growth in terms of contract development and manufacturing of medical devices.
The regulatory framework in the EU is expected to be subjected to major changes, which may affect market access or entry. The market for healthcare contract development and manufacturing organization is expected to grow lucratively in this region due to stringent regulatory policies. In addition, the EU MDR, which came into effect in May 2017, has made it mandatory for manufacturers to monitor the quality, performance, and quality of their medical devices. This is anticipated to propel the market during the forecast period. The presence of established market players, coupled with superior manufacturing capabilities, is anticipated to drive the market in the forecast period. Furthermore, increasing investments by multinational companies are anticipated to boost the market for healthcare contract development and manufacturing organization.
Asia Pacific is expected to witness the fastest CAGR of 10.1% in the forecast period due to increasing regulatory focus on quality control for manufacturing medical devices, especially in emerging economies such as China and India. In addition, growing medical tourism in emerging economies is expected to drive the market in the Asia Pacific. The Middle East and Africa and Latin American markets are projected to exhibit lucrative growth soon due to rapidly growing healthcare industries.
The key parameter affecting the competitive nature is the rapid adoption of advanced healthcare technology for improved healthcare. Also, to retain market share and diversify the product portfolio, major players are undertaking strategies such as mergers, acquisitions, and partnerships. For instance, in 2021, Thermo Fisher underwent a definitive agreement to acquire PPD for USD 17.4 billion. Some prominent players in the healthcare contract development and manufacturing organization market include:
Catalent Inc.
Lonza
Recipharm AB
Siegfried Holding AG
Thermo Fisher Scientific, Inc.
Labcorp Drug Development (Covance Inc.)
Jabil
Sanmina Corporation
IQVIA Holdings Inc.
Flex
Attribute |
Details |
Market Size value in 2022 |
USD 232.8 billion |
Revenue forecast in 2030 |
USD 471.0 billion |
Growth Rate |
CAGR 9.2% from 2022 to 2030 |
Base year for estimation |
2021 |
Historical data |
2018 - 2020 |
Forecast period |
2022 - 2030 |
Quantitative units |
Revenue in USD billion and CAGR from 2021 to 2030 |
Report coverage |
Revenue forecast, competitive landscape, growth factors, and trends |
Segments covered |
Service, region |
Regional scope |
North America; Europe; Asia Pacific; Latin America; Middle East & Africa |
Country scope |
U.S.; Canada; U.K.; Germany; France; Italy; Spain; Netherlands; Belgium; Sweden; Switzerland; Russia; Brazil; Mexico; Argentina; Colombia; Chile; China; India; Japan; Australia; South Korea; Malaysia; New Zealand; Philippines; Thailand; Singapore; South Africa, Saudi Arabia; Israel; Egypt; UAE |
Report coverage |
Revenue forecast, company share, competitive landscape, growth factors, and trends |
Key companies profiled |
Catalent Inc.; Lonza Group Ltd.; Recipharm AB; Siegfried Holding AG; Thermo Fisher Scientific Inc.; Covance Inc.; Jabil; Sanmina Corporation; IQVIA Holdings Inc.; Flex |
15% free customization scope (equivalent to 5 analyst working days) |
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Pricing and purchase options |
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This report forecasts revenue growth at global, regional & country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global healthcare contract development and manufacturing organization market report based on service and region:
Services Outlook (Revenue, USD Billion, 2018 - 2030)
Contract development
Small Molecule
Preclinical
Bioanalysis and DMPK studies
Toxicology Testing
Other Preclinical Services
Clinical
Phase I
Phase II
Phase III
Phase IV
Laboratory Services
Bioanalytical Services
Analytical Services
Large Molecule
Cell Line development
Process Development
Upstream
Microbial
Mammalian
Others
Downstream
MABs
Recombinant proteins
Others
Others
Contract manufacturing
Small Molecule
Large Molecule
MABs
Recombinant proteins
Others
High Potency API
Finished Dose Formulations
Solid Dose Formulation
Liquid Dose Formulation
Injectable Dose Formulation
Medical Devices
Class I
Class II
Class III
Regional Outlook (Revenue, USD Billion, 2018 - 2030)
North America
U.S.
Canada
Europe
U.K.
Germany
France
Italy
Spain
Netherlands
Belgium
Sweden
Switzerland
Russia
Asia Pacific
China
India
Japan
Australia
South Korea
Philippines
Malaysia
New Zealand
Singapore
Thailand
Latin America
Brazil
Mexico
Argentina
Colombia
Chile
Middle East & Africa
South Africa
Saudi Arabia
Egypt
Israel
UAE
b. The global healthcare contract development and manufacturing organization market size was estimated at USD 204.8 billion in 2020 and is expected to reach USD 217.6 billion in 2021.
b. The global healthcare contract development and manufacturing organization market is expected to grow at a compound annual growth rate of 9.2% from 2022 to 2030 to reach USD 471.0 billion by 2030.
b. North America dominated the healthcare contract development and manufacturing organization market with a share of 41.0% in 2020. This is attributable to changes in lifestyle habits leading to rising demand for pharmaceutical products, which is inducing various pharmaceutical companies to outsource the manufacturing of drugs to CDMOs.
b. Some key players operating in the healthcare contract development and manufacturing organization market include Lonza Group Ltd.; Recipharm AB; Siegfried Holding AG; Covance Inc.; Jabil; Sanmina Corporation; IQVIA Holdings Inc.; and Flex.
b. Key factors that are driving the healthcare CDMO market growth include an increase in outsourcing by pharmaceutical companies, the growing pharmaceutical industry, and the support of CDMOs in reducing operational and capital expenses.
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Multiple therapeutic regimens are being followed across the globe in attempts to come up with a reliable treatment for Covid-19. One line of treatment includes the use of hydroxychloroquine, while a second treatment line focuses to use antiviral drugs used in the disease management of HIV. Both these approaches have surged demand from advanced antivirals and antimalarial drugs. This impacts the drug manufacturers as an off label indication for these drug classes has to be worked upon. At the moment, the WHO has not prescribed any of these approaches, neither they have commented if one is better than the other. The report will account for Covid19 as a key market contributor.
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