Pharmaceutical Analytical Testing Outsourcing Market Size, Share & Trends Analysis Report By Service (Bioanalytical, Method Development & Validation, Stability Testing), By End-use, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global pharmaceutical analytical testing outsourcing market size was valued at USD 7.6 billion in 2022 and is anticipated to grow a compound annual growth rate (CAGR) of 8.4% from 2023 to 2030. The key factors driving the market are innovation in the pharmaceutical industry, increasing focus on regulation, safety, quality, rising number of end-users, and the pricing benefits of outsourcing. Small and medium-sized pharmaceutical companies do not have the necessary infrastructure to support various types of analytical testing. As a result, outsourcing these processes is the best alternative as it saves time and money. The COVID-19 pandemic has increased the demand for pharmaceuticals. During this crisis, global pharmaceutical analytical testing outsourcing providers played a predominant role in meeting the testing needs of pharmaceutical companies, biotech companies, contract research organizations, and other end users.

These organizations have been actively working towards the development of pharmaceutical samples, APIs, small and large molecules, and other pharmaceutical products. The increase in the number of cases of COVID-19 is expected to improve the demand for these services, which is expected to have a positive impact on the market for pharmaceutical analytical testing outsourcing.

Other factors, such as the increasing need for product safety and quality, along with changing regulations for in vivo and in vitro tests, are also expected to propel the growth of the market for pharmaceutical analytical testing outsourcing. For instance, the government of China issued a notification to upgrade the quality of generic drugs, remove the backlog of drug applications, improve the quality and transparency of the review and approval process, and encourage new drug R&D in line with global development.

The economic benefits associated with outsourcing these services and approvals in the pharmaceutical industry are projected to support market growth. Quicker and more reliable results, data safety, and improved efficiency are some of the key factors favoring market growth. Innovation or new product development is directly proportional to the demand for testing services. Due to competitive pressures, pricing concerns, and lead-time to market, companies are opting to outsource testing services. According to the Pharma Intelligence Report 2021, the total drugs in the pipeline increased to 18,852 molecules in 2021 from 17,737 molecules in 2020.

An increasing focus on customized care and technological advancements are shortening the product lifecycle, which has resulted in the rapid development of new products. The development of combination products, biosimilar, and other innovative medicines has led to an increase in demand for specific types of tests. Outsourcing services are becoming the most preferable option for many pharma companies to increase operational efficiency, therapeutic expertise, and on-demand services along with the expansion of geographical presence.

As per the WHO, the COVID-19 pandemic has significantly increased the demand for biological medicines like vaccines. As of April 15th, 2022, over 349 vaccines were under development as per the WHO. This is expected to improve the demand for analytical testing services for COVID-19 vaccines under clinical trials. Apart from this, several outsourcing companies have helped pharma companies in testing drugs for COVID-19. For instance, Eurofins Scientific supported the testing of an investigational COVID-19 vaccine candidate by Johnson & Johnson. Similarly, SGS supported AstraZeneca and the University of Oxford to test the ingredients of their vaccine candidate. These actions by the outsourcing service providers are expected to have a positive impact on the market for pharmaceutical analytical testing outsourcing.

Service Insights

The other service segment accounted for a revenue share of over 39.3% in 2022. The segment includes environmental monitoring, raw material testing, batch release, microbial testing, and physical characterization of the materials. Changing regulations for in vivo and in vitro tests and innovative approaches to reduce the complexity of the tests are contributing to the segment’s growth.

The bioanalytical testing services segment is expected to witness the fastest growth over the forecast period. The entry of new participants into the market and an increasing number of clinical trial registrations have contributed to the segment’s growth. A lot of small-scale industries are not equipped with top-end analytical tools and opt for outsourcing these studies to industry experts having years of experience in performing, documenting, and adapting to the challenges presented during analysis. This is also anticipated to drive segment growth.

End-Use Insights

The pharmaceutical companies segment dominated the market for pharmaceutical analytical testing outsourcing and accounted for a revenue share of over 47.3% in 2022. There are a significant number of small-sized pharmaceutical companies globally that lack in-house analytical testing capabilities. This has encouraged small-sized pharmaceutical companies to collaborate with CROs to assist them with analytical testing services. Outsourcing analytical testing services also saves time for the pharmaceutical company, thus helping them focus on their core competence. This further supports the growth of the segment market.

The biopharmaceutical companies’ segment is expected to witness the fastest CAGR of 8.7% over the forecast period. Biopharmaceutical companies are required to do analytical testing to improve productivity, characterize biologics and biosimilars, and provide real-time product quality control. Biopharmaceutical analytical testing requires specialized staff to run the assays and prepare regulatory filings. This reason has significantly contributed to the demand for outsourcing biopharmaceutical analytical services to an expert team and thus is expected to have a positive impact on the segment market.

Regional Insights

North America dominated the pharmaceutical analytical testing outsourcing industry and accounted for the largest revenue share of over 53.4% in 2022 and will retain its dominant position throughout the forecast years. This is because the region is one of the top manufacturing hubs for complex, highly reliable, and high-end pharmaceuticals.

The rise in the manufacturing of pharmaceuticals to meet the increasing demand for efficient healthcare in the region is also projected to be one of the major factors propelling the market growth.

In Asia Pacific, the market for pharmaceutical analytical testing outsourcing is expected to grow at a rapid pace from 2023 to 2030 as a lot of developed countries are investing in countries in this region. Outsourcing services in APAC are usually supported by delivery centers in the Philippines, China, and India. China is gaining popularity as a delivery location for nearshore and onshore clients based out of Japan.

Key Companies & Market Share Insights

Key players in the global pharmaceutical analytical testing outsourcing market are undertaking various strategic initiatives, such as mergers and acquisitions, collaboration, and service portfolios as well as geographic expansions, to gain a higher market share. For instance, in December 2021, SGS SA acquired Quay Pharma, a pharma R&D organization to expand its capability in biopharmaceutical analytical testing. Similarly, in May 2019, Intertek Group Plc announced the expansion of its pharmaceutical services laboratory in Milbourn. Some of the prominent players in the global pharmaceutical analytical testing outsourcing market include:

• SGS S.A.

• Labcorp

• Eurofins Scientific

• Pace Analytical Services, Inc.

• Intertek Group Plc

• PPD Inc. (Thermo Fisher Scientific)

• WuXi AppTec

• Boston Analytical

• Charles River Laboratories

• West Pharmaceutical Services Inc.

Pharmaceutical Analytical Testing Outsourcing Market Report Scope

Global Pharmaceutical Analytical Testing Outsourcing Market Report Segmentation

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 2018 - 2030. For this study, Grand View Research has segmented the global pharmaceutical analytical testing outsourcing market report based on services, end-use, and region:

• Services Outlook (Revenue, USD Million; 2018 - 2030)

  •  Bioanalytical Testing

    • Clinical

    • Non-clinical

  • Method Development & Validation

    • Extractable & Leachable

    • Impurity Method

    • Technical Consulting

    • Others

  • Stability Testing

    • Drug Substance

    • Stability Indicating Method Validation

    • Accelerated Stability Testing

    • Photostability Testing

    • Others

  • Others

• End-use Outlook (Revenue, USD Million; 2018 - 2030)

  • Pharmaceutical Companies

  • Biopharmaceutical Companies

  • Contract Research Organizations

• Regional Outlook (Revenue, USD Million; 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

    • Spain

    • Russia

    • Turkey

    • Netherlands

    • Switzerland

    • Sweden

  • Asia Pacific

    • Japan

    • China

    • India

    • Australia

    • South Korea

    • Indonesia

    • Malaysia

    • Singapore

    • Thailand

    • Taiwan

  • Latin America

    • Brazil

    • Mexico

    • Argentina

    • Colombia

    • Chile

  • Middle East & Africa

    • South Africa

    • Saudi Arabia

    • UAE

    • Egypt

    • Israel