U.S. Pharmaceutical Analytical Testing Outsourcing Market Size, Share & Trends Analysis Report By Service (Bioanalytical Testing, Method Development & Validation), By End-use, And Segment Forecasts, 2020 - 2027

Report Overview

The U.S. pharmaceutical analytical testing outsourcing market size was valued at USD 2.93 billion in 2019 and is expected to expand at a compound annual growth rate (CAGR) of 8.3% from 2020 to 2027. Innovation in the healthcare industry, a growing number of end-users, and an increasing focus on regulation, safety, and quality are the major factors responsible for the lucrative growth of the market. Increasing R&D investments are one of the critical sustainability strategies. 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. In recent times, the R&D expense to revenue ratio is increasing and is expected to continue to rise over the forecast period.

The market is developing due to increasing competition within pharmaceutical and biopharmaceutical markets for disease-specific drugs. Most of the biopharmaceutical manufacturing companies rely on analytical testing to help and improve productivity, characterize biologics and biosimilar, optimize and monitor processes, and offer real-time product quality control. Due to this reason, there is an increasing demand for analytical testing outsourcing services. Hence, the market is expected to witness lucrative growth over the forecast period.

Outsourcing of analytical testing services allows companies to handle more complex activities or more repetitive tasks and also helps companies to focus on their core competencies. This offers cost savings by letting medical companies evade building specialized facilities and hiring staff. Pharmaceutical analytical testing includes the identification and quantification of components in therapeutic solutions or drugs. Owing to the increasing demand for drugs and rising R&D investments, the market is anticipated to witness growth over the assessment period. 

Stand-alone analytical testing is a type of analytical solution that supports various medical companies with analytical requirements and quality control. It offers analytical services, such as method development, stability program design, method validation, and implementation. Stand-alone analytical testing services are provided separately nowadays because they offer additional capacity to QC and analytical laboratories. It helps reduce the time for analytical testing throughout every stage of drug development.

Stand-alone analytical testing services are the most widely used services nowadays. Various pharma companies offer standalone method validation and development, solid-state pre-formulation, clinical and commercial-scale stability studies, and structural characterization services, in compliance with the international standards. Standalone analytical services offered by medical companies include:

• API verification and transfer

• API characterization studies

• Stability studies of API and formulations as per ICH

• Pharmacopoeial testing of API and finished product

• Innovator characterization studies

• Reverse engineering of the innovator product

• Finished product method development/validation

• Finished product stability studies as per ICH

• Pharmaceutical equivalence studies/multimedia dissolution

• Rapid analytical method development services

Several CROs have further launched standalone services to support pharmaceutical companies with their analytical and quality control requirements. They offer key standalone analytical services, such as stability program design and implementation and method development and validation.

Service Insights

On the basis of service, the market is segmented into bioanalytical testing, method development and validation, stability testing, and other testing services. Other testing services held the largest share of 39.5% in 2019. The bioanalytical testing segment is expected to witness the fastest growth over the forecast period due to an increasing preference for outsourcing analytical testing and growing R&D expenditure by biopharmaceutical industry players. Furthermore, the increasing number of clinical trial registrations and entry of new participants within the market space in the past decade have contributed to the growth of the bioanalytical testing segment.

Bioanalytical testing involves the examination of drugs/formulation or active ingredients within a biological system, such as blood, urine, serum, and tissue. This analysis is performed to characterize and quantify drug activity and provide evidence for therapeutic action. These tests also help in the creation of a drug monograph for reference during preclinical and clinical trials.

The segment is broadly classified into clinical and non-clinical bioanalytical testing and is expected to witness lucrative growth over the forecast period. Clinical bioanalytical testing is anticipated to lead the segment in terms of growth rate due to stringent regulatory frameworks surrounding the process of drug discovery and development and the growing number of clinical trials. Due to these reasons, the segment is expected to witness lucrative growth over the forecast period.

The clinical and non-clinical bioanalytical testing involves Good Laboratory Practices (GLP) and Non-GLP. It refers to a system where non-clinical health and safety studies are carried out, planned, recorded, monitored, archived, and reported. This can be attributed to the fact that various companies are working toward the development of new molecules (small and large) in particular biopharmaceuticals. These firms are investing a major amount of capital and manpower to innovate antibiotics, vaccines, and cancer drugs.

The non-GLP analytical studies include analysis of the concentration of test article dosing solutions and methodological validation. As non-GLP studies do not require all of the rigor of GLP studies, hence most of the pharma companies outsource these services. Hence, due to this reason, the demand for non-GLP outsourcing studies has been seen in recent years.

End-use Insights

On the basis of end-use, the market is segmented into pharmaceutical companies, biopharmaceutical companies, and contract research organizations. Pharmaceutical companies accounted for the largest share of 47.6% in 2019. The biopharmaceutical companies segment is expected to exhibit the fastest CAGR of 8.6% during the forecast period.

Various pharma companies outsource their analytical testing services as it relates specifically to particulate investigations and helps them obtain the correct results in a short period. They also tend to outsource their analytical testing services to stay competitive and flexible in a field with exponentially growing knowledge, unstable economic environment, and increasingly sophisticated technologies. Changing regulations for in vitro and in vivo tests and innovative approaches to moderate the complexity of tests are the factors contributing to the increase in the outsourcing of pharmaceutical analytical testing services.

For example, AMRI offers standalone services in response to new regulatory requirements. The new regulatory requirements include implementation of the International Council for Harmonization (ICH) Q3D elemental impurities guideline and ICH M7 guideline. The main purpose of this regulatory guideline is to provide a practical framework that is applicable for identification, qualification, and categorization. These changes in regulatory requirements will help pharma companies to improve the drug development process. An increasing number of clinical trial registrations and entry of new participants in the market over the past decade are the key factors likely to propel the biopharmaceutical companies segment over the forecast period.

Key Companies & Market Share Insights

Strategic collaborations, agreement, M&A, and service portfolio expansion are the key undertakings in this market. Companies are taking up these strategies to strengthen their product portfolio, increase manufacturing capacities, and provide competitive differentiation.

For instance, in January 2019, SGS SA invested USD 9.35 million to expand gene and cell therapy, viral vaccine, and biologics testing capabilities in the U.K. Innovation or new product development are directly proportional to the demand for testing services. For example, in October 2018, SGS SA introduced a new in vitro toxicology testing service at its laboratory in Canada. The company also expanded its impurity testing services at its laboratory in Chennai, India. This facility also has the ability for elemental analysis. Some prominent players in the U.S. pharmaceutical analytical testing outsourcing market include:

• West Pharmaceutical Services, Inc.

• SGS SA

• Eurofins Scientific

• Pace Analytical Services LLC

• Intertek Group Plc

• PPD, LLC

• Wuxi AppTec, Inc.

• Boston Analytical

• Charles River Laboratories International, Inc.

U.S. Pharmaceutical Analytical Testing Outsourcing Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the U.S. pharmaceutical analytical testing outsourcing market report on the basis of service and end-use:

• Service Outlook (Revenue, USD Million, 2016 - 2027)

  • 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

  • Other Testing Services

• End-use Outlook (Revenue, USD Million, 2016 - 2027)

  • Pharmaceutical Companies

  • Biopharmaceutical Companies

  • Contract Research Organizations