Healthcare Contract Development And Manufacturing Organization Market Size, Share & Trends Report

Healthcare Contract Development And Manufacturing Organization Market Size, Share & Trends Analysis Report By Services (Contract Development, Contract Manufacturing), By Region, And Segment Forecasts, 2021 - 2028

  • Published Date: Aug, 2021
  • Base Year for Estimate: 2020
  • Report ID: GVR-4-68038-438-3
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2019
  • Number of Pages: 183

Report Overview

The global healthcare contract development and manufacturing organization market size was valued at USD 204.8 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 8.6% from 2021 to 2028. 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), over 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.

U.S. healthcare CDMO market size, by services, 2018 - 2028 (USD Billion)

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 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), need of 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 cost is a challenge, which significantly affects their bottom line and 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.

Services Insights

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 2020. 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.

Global healthcare CDMO market share, by services, 2020 (%)

The growing trend of outsourcing, increasing use of medical devices due to the rising prevalence of various chronic diseases, and complexity in 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 49.9% in 2020 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 market growth.

Regional Insights

North America dominated the healthcare contract development and manufacturing organization market and held the highest revenue share of 41.1% in 2020, which was attributed to the presence of advanced medical infrastructure, lower costs, and 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 over 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 9.5% over 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 market in Asia Pacific. The Middle East and Africa and Latin American markets are projected to exhibit lucrative growth soon due to rapidly growing healthcare industries.

Key Companies and Market Share Insights

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 of the prominent players in the healthcare contract development and manufacturing organization market include:

  • Catalent Inc.

  • Lonza Group Ltd.

  • Recipharm AB

  • Siegfried Holding AG

  • Thermo Fisher Scientific Inc.

  • Covance Inc.

  • Jabil

  • Sanmina Corporation

  • IQVIA Holdings Inc.

  • Flex

Healthcare Contract Development And Manufacturing Organization Market Report Scope

Report Attribute

Details

Market size value in 2021

USD 217.6 billion

Revenue forecast in 2028

USD 388.3 billion

Growth Rate

CAGR of 8.6% from 2021 to 2028

Base year for estimation

2020

Historical data

2016 - 2019

Forecast period

2021 - 2028

Quantitative units

Revenue in USD billion and CAGR from 2021 to 2028

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Services, region

Regional scope

North America; Europe; Asia Pacific; Latin America, MEA

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

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

Customization scope

Free report customization (equivalent up to 8 analyst’s working days) with purchase. Addition or alteration to country, regional & segment scope.

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Segments Covered in the Report

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 2028. For the purpose of this study, Grand View Research has segmented the global healthcare contract development and manufacturing organization market on the basis of services and region:

  • Services Outlook (Revenue, USD Billion, 2016 - 2028)

    • 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, 2016 - 2028)

    • 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

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