Pharmaceutical Analytical Testing Outsourcing Market Size, Share & Trends Analysis Report By Service (Bioanalytical, Stability Testing), By Region (North America, APAC), And Segment Forecasts, 2021 - 2028

Report Overview

The global pharmaceutical analytical testing outsourcing market size was valued at USD 6.54 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 8.3% over the forecast period. Innovation in the pharmaceutical industry, increasing focus on regulation, safety & quality, rising number of end-users, and pricing benefits of outsourcing are the key factors driving the market. Increasing R&D budgets and investments in drug discovery are among the critical sustainability strategies for pharmaceutical companies. Not all companies have an infrastructure that is conducive to all types of analytical testing. Hence, outsourcing these operations is the most suitable option, which also helps save time and cost.

Other factors, such as the increasing need for product safety & quality, along with changing regulations for in vivo and in vitro tests are also expected to propel the growth of the market. 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 reliable results, data safety, and improved efficiency are some 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 2019, the total development pipeline increased to 16,181 molecules in 2019 from 15,267 molecules in 2018.

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, biosimilars, 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.

In several nations, analytical laboratories are considered to be a part of the essential healthcare infrastructure, thus analytical studies were continued with minimal or no initial disruptions due to COVID-19. As a measure to prevent the spread of the virus and ensure the safety of the employees, most laboratories adopted work shifts or Work From Home (WFH) strategies to ensure the minimum presence of their staff. Furthermore, these laboratories ensured that sanitation and social distancing norms are followed by staff members.

The market comprises many players focusing on specialty services or dealing with end-to-end services. However, large outsourcing companies are looking to acquire high-impact service/manufacturing firms to boost their existing capabilities. A few instances include the acquisition of Clinical Research Laboratories by Eurofins in September 2018, and MPI research by Charles River Laboratories International, Inc., among others.

Service Insights

The other service segment generated the maximum revenue in 2020 and accounted for over 39% of the overall share. The segment includes environmental monitoring, raw material testing, batch release, microbial testing, and physical characterization of the materials. Changing regulations for in vivo & in vitro tests and innovative approaches to reduce the complexity of the tests are contributing to the segment growth.

The bioanalytical testing services segment is expected to witness the fastest growth over the forecast period. The entry of new participants in the market and an increasing number of clinical trial registrations have contributed to the segment growth.

A lot of small-scale industries are not equipped with top-end analytical tools and opt for outsourcing of 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.

Regional Insights

North America accounted for the largest revenue share of over 53% in 2020 and will retain its dominant position throughout the forecast years. This is due to the fact that it is one of the top manufacturing hubs of complex, highly reliable, & 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.

Asia Pacific is expected to be the fastest-growing regional market from 2021 to 2028 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

Market players are undertaking various strategic initiatives, such as mergers & acquisitions, collaboration, and service portfolio as well as geographic expansions, to gain a higher market share. For instance, in May 2019, Intertek Group Plc announced the expansion of its pharmaceutical services laboratory in Milbourn, which is likely to open at the end of 2019. In December 2018, SGS SA invested USD 3.84 million to undertake a two-phase expansion project at its laboratory in Poitiers, France, to implement a 50% increase in bioanalytical capabilities at the site by 2020.

Also, Boston Analytical opened a new office in Cambridge, in August 2019, thereby expanding its reach of services. Charles River Laboratories was not as affected by the pandemic as other clinical CRO firms, as nearly all its sites were active during the pandemic. However, the company revised down its 2020 financial guidance by nearly USD 215 million. Also, as a response to the pandemic, PPD adopted a remote working model and transferred its closed/inaccessible site patients to open sites. The company has not provided any financial guidance for 2020. Some prominent players in the global pharmaceutical analytical testing outsourcing market include:

• SGS SA

• Toxikon, Inc.

• Eurofins Scientific

• Pace Analytical Services, Inc.

• Intertek Group Plc

• Pharmaceutical Product Development, LLC.

• WuXi AppTec, Inc.

• Boston Analytical

• Charles River Laboratories International, Inc.

• West Pharmaceutical Services Inc.

Pharmaceutical Analytical Testing Outsourcing Market Report Scope

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 pharmaceutical analytical testing outsourcing market report on the basis of service and region:

• Service Outlook (Revenue, USD Million, 2016 - 2028)

  • Bioanalytical

    • 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

• Regional Outlook (Revenue, USD Million, 2016 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

    • Spain

    • Russia

    • Turkey

    • The Netherlands

    • Switzerland

    • Sweden

  • Asia Pacific

    • China

    • Japan

    • 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