The global healthcare contract development and manufacturing organization market size was estimated at 193.4 billion in 2019 and is anticipated to expand at a CAGR of 8.1% over the forecast period. Increasing outsourcing of R&D is one of the major factors contributing to market growth. Healthcare contract development and manufacturing organization (CDMO) provides outsourcing services to various pharmaceutical industries on a contract basis. Increase in the outsourcing by pharmaceutical companies, growing pharmaceutical industry, and support of CDMOs in reducing the operational and capital expenses are some of the major factors anticipated to propel the market growth.
Healthcare contract development and manufacturing organizations offer one-stop solutions from development to manufacturing to all the pharmaceutical and medical device companies on a contract basis. Most of the small-sized pharmaceutical and biopharmaceutical companies prefer outsourcing their development and manufacturing organization activities due to lack of internal capabilities.
In addition, favorable regulatory affairs in developing economies and assurance of quality services are other major drivers for contract development and manufacturing organization market. Most of the pharmaceutical and biopharmaceutical companies are outsourcing their manufacturing activities to CDMOs in order to meet the rising demand for small molecules and biologics in emerging countries. This is expected to drive market growth over the forecast period.
However, increasing logistic costs, serialization issues faced by healthcare organizations, and threat of infringement of Intellectual Property (IP) rights are anticipated to restrain the market growth for healthcare contract development and manufacturing organization over the forecast period.
The market is segmented on the basis of services, which includes contract development and contract manufacturing. The contract manufacturing segment accounts for the largest market share of 72.7 % in 2019 and is also expected to grow at the fastest CAGR of 8.1 % during the forecast period. Growing trend of outsourcing, increasing use of medical devices due to the rising prevalence of various chronic diseases, and complexity in manufacturing devices are expected to drive the healthcare contract development and manufacturing organization market.
Contract manufacturing is further sub-segmented into API/bulk drugs, finished dose formulations, and medical device. In the contract manufacturing segment, the medical device is expected to account for the largest market share of 47.5% in 2019. The medical device segment is further sub-segmented into class I, class II, and class III. Increased spending by the pharmaceutical companies on R&D, rising prevalence of chronic disease, and an increasing number of CROs are some major factors positively affecting the market growth.
North America held the largest share of the healthcare CDMO market in 2019 and is expected to continue its dominance over the forecast period. Change in lifestyle habits such as smoking, lack of physical activity, and alcohol consumption is leading to growth in the number of chronic diseases in the region. Due to this, the demand for pharmaceutical products is increasing, which is inducing various pharmaceutical companies to outsource the manufacturing of drugs to CDMOs. It is one of the major factors responsible for the market growth of CDMO in North America.
Asia Pacific is expected to witness the fastest CAGR of 8.9 % over the forecast period. Asia Pacific continues to be leading the market in healthcare contract development & manufacturing organization due to low manufacturing costs as compared to North America and Europe. China and India are the major suppliers of API manufacturing services in the region.
The market is highly competitive in nature with the presence of some major market players that include Catalent Inc.; Lonza Group Ltd.; Recipharm AB; Siegfried Holding AG; Thermo Fisher Scientific Inc.; Covance Inc.; Jabil; Sanmina Corporation; IQVIA Holdings Inc.; and Flex.
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.
Base year for estimation
Actual estimates/Historical data
2016 - 2018
2020 - 2027
Revenue in USD Billion and CAGR from 2020 to 2027
North America, Europe, Asia Pacific, Latin America, Middle East & Africa
U.S., Canada, U.K., Germany, France, Italy, Spain, Netherlands, Belgium, Switzerland, Russia, Sweden, China, India, Japan, Australia, South Korea, Malaysia, New Zealand, Singapore, Philippines, Thailand, Mexico, Brazil, Argentina, Colombia, Chile, South Africa, Saudi Arabia, UAE, Israel, Egypt
Revenue forecast, company share, competitive landscape, growth factors and trends
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This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global healthcare contract development and manufacturing organization market report on the basis of services and region:
Service Outlook (Revenue, USD Billion, 2016 - 2027)
Bioanalysis and DMPK studies
Other Preclinical Services
Finished Dose Formulations
Regional Outlook (Revenue, USD Billion, 2016 - 2027)
Middle East & Africa
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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.