Pharmaceutical Manufacturing Market Size, Share & Trends Report

Pharmaceutical Manufacturing Market Size, Share & Trends Analysis Report By Drug Development Type, By Formulation, By Route Of Administration, By Therapy Area, By Prescription, By Age Group, And Segment Forecasts, 2020 - 2027

  • Published Date: Sep, 2020
  • Base Year for Estimate: 2019
  • Report ID: GVR-4-68039-014-2
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2018
  • Number of Pages: 170

Report Overview

The global pharmaceutical manufacturing market size was valued at USD 1,325.5 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 4.6% from 2020 to 2027. Continuous investments made by the pharmaceutical and outsourcing firms to expand their manufacturing facilities have positively impacted market growth. For instance, in February 2020, AstraZeneca invested USD 133.0 million to expand its Australian manufacturing site. Similarly, in December 2019, a global outsourcing solution provider, PCI Pharma Services, expanded its U.K.-based Tredegar facility to improve its high potent drug development and manufacturing capabilities. The emergence of new management systems, such as enterprise resource planning systems and manufacturing execution systems has optimized the data management process.

The U.K. pharmaceutical manufacturing market size

In addition, the paradigm shift towards smart, integrated, and data-rich paperless operations has resulted in precise and error-free production. Such developments have allowed the companies to gather and utilize more data in minimal time and cost, which boosts the pharmaceutical manufacturing. Constant progress in the field of personalized medicines has opened up numerous possibilities to target different health maladies and allowed the development of patient-centric models. This progress results in a shift from large batches to smaller batches for the development of complex medicines and autologous patient-centric treatments. This has also encouraged the manufacturers to redesign their supply chain in order to better align with the patient-centric health care system.

A rise in the drug approvals by the regulatory bodies is expected to fuel the pharmaceutical manufacturing procedures. For instance, the FDA approved 59 drugs in 2018, 49 drugs in 2019, and 15 drugs up to April 2020. Furthermore, a large number of ongoing clinical trials have created numerous growth opportunities in the market for pharmaceutical manufacturing.

Drug Development Type Insights

The in-house segment dominated the market for pharmaceutical manufacturing and accounted for a revenue share of 50.1% in 2019. Most of the large-scale drug manufacturers opt for in-house production because it allows the companies to have control over the private information associated with novel molecules. Expansion of in-house pharmaceutical manufacturing facilities by key firms also drives the segment growth. For instance, in August 2020, Grand River Aseptic Manufacturing expanded its Michigan facilities.

In recent years, key drug manufacturers have shifted their focus towards external service providers for R&D and manufacturing services. The growth in the demand for customized products, the need for enhanced productivity and efficiency across the value chain, and continuous pressure from regulatory bodies on drug pricing have compelled the pharmaceutical companies to rely more on outsourcing mode of drug development.

Several benefits associated with outsourcing operations are expected to drive the segment at a lucrative pace in the market for pharmaceutical manufacturing. Outsourced services minimize the investments, reduce drug development and overall costs, and increase the efficiency of manufacturing procedures, and easily comply with different regulatory norms. Besides, the integration of Robotic Process Automation (RPA) by contract manufacturers efficiently accelerates the drug development processes.

Formulation Insights

In terms of revenue, the tablets segment dominated the market for pharmaceutical manufacturing with a share of 25.4% in 2019. This is due to the wide availability of tablets in different colors, shapes, and sizes as well as types, such as film and enteric-coated, effervescent, and orally disintegrating tablets. The advent of 3D-printed tablets designed for personalized needs also boosts segment growth. For instance, in February 2020, Merck partnered with a German firm, AMCM, to conduct clinical testing on 3D printed tablets.

The injectable segment is anticipated to witness the fastest CAGR in the market for pharmaceutical manufacturing during the forecast period. The increase in the number of approvals for prefilled syringes and auto-injectors is attributive to an estimated growth rate. Moreover, a shift in preferences towards larger dosage volumes has resulted in an increased demand for 2.25-mL needle syringes, which significantly contributes to the revenue generation in this segment.

Subcutaneous injections have gained immense popularity in recent years among drug developers, device manufactures, and patients. Benefits associated with these injections are self-administration, ease of use, reliability, precision, use of fixed doses in prefilled syringes, compact design, compliance, and high patient comfort. The advent of subcutaneous injections is expected to further propel the growth of the injectable segment in the market for pharmaceutical manufacturing.

Route of Administration Insights

The oral segment dominated the market for pharmaceutical manufacturing and accounted for a revenue share of 59.8% in 2019. Oral dosage forms are affordable, easy to manufacture, and patient-friendly. In addition, the advancements in drug delivery technologies, such as sustained release dosage formulations and targeted drug delivery, has allowed the orally administered drugs to achieve greater levels of availability in the marketplace.

A significant rise in the implementation of automated systems and barrier systems, including restricted access barrier systems, and isolators, in parenteral manufacturing, boosts the parenteral segment at the fastest CAGR throughout the forecast period. In addition, an introduction of a broad range of packaging styles, such as ready-to-fill syringes, cartridges, and vials, has hugely transformed the parenteral manufacturing sector.

The rise in demand for innovative drug-delivery systems that better fit with the ‘mobile lifestyle’ of patients’ paves a path for the high adoption of pens and autoinjectors, which further surges the segment growth. Apart from this, an increase in the outsourcing of fill-finish manufacturing services by the drug developers also boosts the revenue generation in the parenteral segment in the market for pharmaceutical manufacturing.

Therapy Area Insights

The other diseases segment dominated the market for pharmaceutical manufacturing and accounted for a revenue share of 60.1% in 2019. The cancer segment accounted for the second-largest revenue share in 2019 owing to the high sales of oncology drugs, especially KEYTRUDA of Merck and HUMIRA of AbbVie, Inc., in the market space. Several studies have reported that healthcare spending on cancer treatments has doubled in the last few years. Besides, a huge number of clinical tests in immuno-oncology globally are also attributive to the largest share of the cancer segment.

An increase in the incidence rate of diabetes globally and a rise in the number of marketed branded anti-diabetic therapies create numerous growth opportunities for the diabetes segment. According to the estimates of the International Diabetes Federation, there were around 463.0 million adults with diabetes in 2019 and it is expected to rise to 700.0 million cases in 2045. This high incidence rate drives the pharmaceutical development for diabetes at the fastest CAGR.

Numerous drug approvals and launches by pharmaceutical manufacturers significantly accelerate the revenue generation in the diabetes segment. For instance, in February 2020, Sun Pharmaceutical Industries Ltd. launched its Riomet ER, a liquid formulation, designed for the treatment of type 2 diabetes mellitus in the U.S. Similarly, in April 2020, Novo Nordisk A/S received approval for its oral diabetes drug Rybelsus from the European Commission in Europe.

Prescription Insights

Prescription medicines dominated the market for pharmaceutical manufacturing and accounted for the maximum revenue share of 85.2% in 2019. The high growth of prescription drug expenditures globally is one of the major factors attributive to this large revenue share. According to the American Journal of Health-System Pharmacy, the overall prescription drug spending rose by 4-6% in 2019 in the U.S. Similarly, data from Vizient’s Pharmacy Program stated that the hospital prescription drug spending is likely to rise by nearly 4.6% in 2020.

Factors, such as the high demand for cost-effective treatment options and self-medication, has hugely transformed the over-the-counter (OTC) medicines segment. OTC medicines are comparatively cost and time effective as compared to prescription medicines. Recently, several regulatory bodies have shifted a large number of medicines from the prescription to OTC segment in the market for pharmaceutical manufacturing.

As per the estimates of the Consumer Healthcare Products Association study, this paradigm shift is expected to save around USD 20.0 billion in healthcare spending every year. This Rx-to-OTC switch is a scientifically rigorous, data-driven, and highly regulated procedure that enables the consumers to have access across a wide range of medicines. Thus, the cost-saving benefits coupled with high public demand for OTC medicines have propelled segment growth at the fastest growth rate in the market for pharmaceutical manufacturing.

Age Group Insights

The geriatric segment dominated the pharmaceutical manufacturing market and accounted for a revenue share of 46.8% in 2019. According to the publications of World Population Prospects: the 2019 Revision, one in 11 individuals were over age 65 in 2019. This is expected to reach to one in six individuals by 2050. The growth of specialty drugs under the Orphan Drug Act has been a boon in pediatric medicine. The introduction of the Pediatric Research Equity Act (PREA) and Best Practices for Children Act (BPCA) provides a carrot-and-stick technique that focuses on the development of pediatric medicines. PREA operates as a checkpoint during the FDA drug approval. These supportive initiatives drive the drug production for children & adolescents segment at a lucrative pace.

Besides, the growth in the approvals of pediatric medicine further boosts segment growth in the market for pharmaceutical manufacturing. For instance, in March 2020, Eli Lilly and Company received FDA approval for the supplemental Biologics License Application for its Taltz injection that is designed for the treatment of plaque psoriasis in children. Similarly, in January 2020, Neurelis, Inc. received FDA approval for its VALTOCO nasal spray that is designed for epilepsy treatment in 6 years of age and older.

Distribution Channels Insights

The retail segment accounted for the largest revenue share of 78.2% in 2019 in the market for pharmaceutical manufacturing. As the medical cost and health insurance have risen, more people have shifted their preferences towards self-medication for the treatment of minor health issues. Moreover, OTC medicines have gained popularity as an easy and cost-effective option. These factors result in the high adoption rate of drugs from retail stores, which leads to a larger share of this segment.

In recent years, specialty pharmacy has gained significant traction resulting in the wide availability of specialty drugs at retail pharmacies, which also drive the segment growth. Besides, retail pharmacies undergo partnerships and collaboration models with health professionals and healthcare facilities in order to improve clinical outcomes and remain competitive with other businesses in the market for pharmaceutical manufacturing.

Global pharmaceutical manufacturing market share

The advent of electronic transfer of information is anticipated to open up numerous opportunities within primary care. This can eliminate the issues of poor communication between primary and secondary care. Moreover, the use of diagnostic support systems enables the automated introduction of clinical pathways of care, which can be tailored according to the patient’s needs by a clinician. This, in turn, drives the sale of drugs in the non-retail segment at the fastest CAGR in the market for pharmaceutical manufacturing.

Regional Insights

North America dominated the market for pharmaceutical manufacturing with a revenue share of 40.1% in 2019. This is attributive to a large number of strategic pharma partnerships, especially among the well-established and early-stage companies, in this region. Besides, the U.S. held the dominant position in per capita prescription drug spending globally. Moreover, the U.S. accounted for the largest number of drug efficacy studies and clinical trials in the global market for pharmaceutical manufacturing.

In Asia Pacific, the market for pharmaceutical manufacturing is expected to witness the fastest growth during the forecast period due to a huge customer base, an increase in healthcare expenditure, disease incidence, and the presence of supportive regulatory systems. Furthermore, recently the region has adapted to new technologies and undergone a digital transformation to achieve sustainable patient care.

Various national-level policies have promoted the application of big data and Artificial Intelligence (AI) in Asian countries. The State Council of China issued guidelines to promote the development of healthcare big data and AI with specific emphasis on its application in healthcare. Besides, several western companies have set up in this region for lower costs, greater efficiency, and increased speed to market in clinical development operations.

Key Companies & Market Share Insights

Key players in the market for pharmaceutical manufacturing have adopted strategic initiatives to expand their presence and maintain a competitive edge in the market space. Moreover, market participants are involved in product development, collaboration and partnership models, agreements, business expansion, and merger and acquisition strategies to reinforce their product portfolio and fulfill the demand for pharmaceutical products. Some of the prominent players in the pharmaceutical manufacturing market include:

  • F. Hoffmann-La Roche Ltd.

  • Novartis AG

  • GlaxoSmithKline plc

  • Pfizer, Inc.

  • AstraZeneca

  • Merck & Co., Inc.

  • Johnson & Johnson

  • Sanofi SA

  • Eli Lilly and Company

  • Lonza

Pharmaceutical Manufacturing Market Report Scope

Report Attribute

Details

Market size value in 2020

USD 1397.3 billion

Revenue forecast in 2027

USD 1902.6 billion

Growth rate

CAGR of 4.6% from 2020 to 2027

Base year for estimation

2019

Actual estimates/Historical data

2016 - 2018

Forecast period

2020 - 2027

Quantitative units

Revenue in USD billion and CAGR from 2020 to 2027

Report coverage

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

Segments covered

Drug development type, formulation, route of administration, therapy area, prescription, age group, distribution channel, region

Regional scope

North America; Europe; Asia Pacific; Latin America; Middle East & Africa

Country scope

The U.S.; Canada; Germany; The U.K.; France; Spain; Italy; Japan; China; India; Brazil; Mexico; Saudi Arabia; South Africa

Key companies profiled

F. Hoffmann-La Roche Ltd.; Novartis AG; GlaxoSmithKline plc; Pfizer, Inc.; AstraZeneca; Merck & Co., Inc.; Johnson & Johnson; Sanofi SA; Eli Lilly and Company; Lonza

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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 2027. For the purpose of this study, Grand View Research has segmented the global pharmaceutical manufacturing market report on the basis of drug development type, formulation, route of administration, therapy area, prescription, age group, distribution channel, and region:

  • Drug Development Type Outlook (Revenue, USD Billion, 2016 - 2027)

    • Outsource

    • In-house

  • Formulation Outlook (Revenue, USD Billion, 2016 - 2027)

    • Tablets

    • Capsules

    • Injectable

    • Sprays

    • Suspensions

    • Powders

    • Other Formulations

  • Route of Administration Outlook (Revenue, USD Billion, 2016 - 2027)

    • Oral

    • Topical

    • Parenteral

    • Inhalations

    • Other Routes of Administration

  • Therapy Area Outlook (Revenue, USD Billion, 2016 - 2027)

    • Cardiovascular Diseases

    • Pain

    • Diabetes

    • Cancer

    • Respiratory Diseases

    • Other Diseases

  • Prescription Outlook (Revenue, USD Billion, 2016 - 2027)

    • Prescription Medicines

    • Over-the-counter (OTC) Medicines

  • Age Group Outlook (Revenue, USD Billion, 2016 - 2027)

    • Children & Adolescents

    • Adults

    • Geriatric

  • Distribution Channels Outlook (Revenue, USD Billion, 2016 - 2027)

    • Retail

    • Non-retail

  • Regional Outlook (Revenue, USD Billion, 2016 - 2027)

    • North America

      • The U.S.

      • Canada

    • Europe

      • Germany

      • The U.K.

      • France

      • Italy

      • Spain

    • Asia Pacific

      • Japan

      • China

      • India

    • Latin America

      • Brazil

      • Mexico

    • Middle East Africa (MEA)

      • South Africa

      • Saudi Arabia

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