Pharmaceutical Contract Manufacturing & Contract Research Market By Services (CMO {API/Bulk Drugs, Advanced Drug Delivery Finished Dose Formulations}, CRO {Oncology, Vaccines, Immunology Cardiology, Neuroscience}), & Segment Forecasts, 2018 - 2025

Industry Insights

The global pharmaceutical contract manufacturing & contract research market size was valued at over USD 123.1 billion in 2016. Cost saving and time saving benefits associated with the implementation of outsourcing is responsible for driving the industrial growth. Companies are investing in infrastructure, personnel, and technology in order to gain significant share of the outsourcing revenue. Increasing demand as a consequence of ongoing patent cliff of the biologic drugs is expected to fuel demand. 

Presence of end-to-end service providers that are engaged in providing value added services for an integrated or risk sharing business model is expected to bolster progress in this industry. Moreover, new product launches and novel drug delivery mechanisms are anticipated to drive outsourcing demand. 

Pharmaceutical contract manufacturing market, 2014 - 2025 (USD Billion)

The industry has been alternating between the cycles of inadequate and excessive production capacity for contract as well as captive manufacturers. Hence, it is important for Contract Manufacturing Organizations (CMOs) to make cautious decisions pertaining to capacity expansion and choice of deals.

Changing product pipeline is also responsible for the growth of service based market, with the rising importance of biologics, generics, and biosimilars. The companies are spending more on outsourcing for their growing pipeline of biologics for the eradication of chronic disorders. “One-stop-shop” offered by the CMO’s for the promotion of portfolio of complete range of products is anticipated to influence growth of CMOs. Furthermore, differentiation and consolidation strategies adopted by companies can be attributed for projected progress. 

The larger CMOs are embracing the trend of moving and focusing on the niche areas of biopharmaceutical and pharmaceutical development. They are focusing on the establishment of regulatory pathways for transgenic based product development. However, the companies are willing to restrict the outsourcing for the manufacture of complex and big moieties. They are in an opinion of in-house production rather than outsource owing to the specific requirements.

In addition to this, dynamic changes witnessed in this sector coupled with severe pressure over the margins is anticipated to restrain growth to considerable extent. Stringent and complex regulatory requirements are also attributive for steady progress.

Service Insights

Service wise the market is segmented into manufacturing and research services. The manufacturing services are further segmented into API and bulk drugs manufacturing, advanced drug delivery formulations, packaging, and finished dose formulations. API dominated with respect to revenue as a consequence of the rising demand for High Potency Active Pharmaceutical Ingredients (HPAPI). Market entities are engaged in development of large scale mfg. facilities on pilot as well as commercial scale

Finished dose formulations are anticipated to grow with fastest YoY CAGR in service provision for production and development. Amongst these, solid dosage forms accounted for the largest revenue share due to the higher outsourcing done for the powdered formulations. Development of biologics is anticipated to propel demand for injectable dosage manufacturing services including lyophilization and fill-finish outsourcing. Thus, liquid formulations are expected to grow potentially in the coming years.

Pharmaceutical contract manufacturing & contract research market, by region, 2016 (%)

Regional Insights

North America dominated with respect to revenue share in 2016, however Asia Pacific is projected to grow at a surplus rate. This growth is supported by rise in number of companies outsourcing the projects in the developing economies of this region. Larger share of North American region is as a consequence of expansion of the U.S. healthcare industry. This share is anticipated to decrease to substantial extent thus driving the share of BRIC countries in this sector. 

Cash rich nature of the Asian companies is responsible for the captive nature of the contract manufacturing sector. Spout of heavy investments by Asian CMOs is expected to result in exponential progress. Furthermore, Latin American market is anticipated to register substantial growth as a consequence of presence of established multinational players in this region. Major entities operating in Brazil are Novartis, Roche, and Pfizer.

Latin America holds the potential for transforming into a global hub for the development and production of pharmaceutical products. Factors that can be attributed for this transformation include robust low cost of product development.

Competitive Insights

Major entities operating in this industry include Catalent, Pharmaceutical Product Development LLC, AbbVie, Baxter BioPharma Solutions, Patheon, Grifols International, S.A., Dalton Pharma Services, and Boehringer Ingelheim Biopharmaceuticals GmBh, and Lonza AG. 

Major trend amongst the biotechnology and pharmaceutical entities includes consolidation for industry outsourcing, parallel mergers and acquisitions. In addition to this, the service providers are striving in order to fortify their capabilities for enhancing market presence.

These participants are also engaged in business profile repositioning through divestitures of specific product lines or business units. Incorporation of technological advances to provide services with quality by design and risk based monitoring is also implemented by players.

In an effort to reduce the costs and boost the operational efficiencies’ life science companies are focusing on selling the domestic production plants to contract organizations. Industry participants are also focusing on adaptive and intelligent monitoring strategies.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at regional & country level and provides an analysis on the latest trends and opportunities in each of the sub-segments from 2014 to 2025. For the purpose of this report, Grand View Research has segmented the pharmaceutical contract manufacturing & contract research market on the basis of CMO and CRO services and regions: 

• Service Outlook (Revenue, USD Billion; 2014-2025)

  • Manufacturing

    • API/Bulk Drugs

    • Advanced Drug Delivery Formulations Packaging

    • Packaging

    • Finished Dose Formulations

      • Solid Formulations

      • Liquid Formulations

      • Semi-solid Formulations

  • Research

    • Oncology

    • Vaccines

    • Inflammation & Immunology

    • Cardiology

    • Neuroscience

    • Others

• Regional Outlook (Revenue, USD Billion; 2014-2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • UK

  • Asia Pacific

    • India

    • China

  • Latin America

    • Brazil

    • Mexico

    • Colombia

    • Argentina

    • Chile

    • Venezuela

  • Middle East and Africa (MEA)

    • South Africa