U.S. Pharmaceutical Analytical Testing Outsourcing Market Size, Share & Trends Analysis Report By Service (Bioanalytical Testing, Method Development & Validation, Stability Testing), By End-use, And Segment Forecasts, 2022 - 2030

Report Overview

The U.S. pharmaceutical analytical testing outsourcing market size was valued at USD 3.4 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 8.0% from 2022 to 2030. Innovation in the pharmaceutical industry, increasing focus on regulation, safety & quality, rising number of end-users, and pricing benefits of outsourcing are key drivers for the lucrative growth. The demand for testing services is directly correlated with innovation or new product development. Companies are choosing to outsource their testing needs as a result of pressure from the competition, concerns about pricing, and long lead times to market.

Technology advancements and a growing emphasis on individualized care are shortening the product lifecycle, which has sped up the creation of new products. There is currently more demand for particular kinds of tests as a result of the development of biosimilars, combination products, and other novel medicines. Additionally, businesses that diversify their operations in a new location must also adhere to local standards, which might necessitate that they carry out tests unique to that area.

However, due to the COVID-19 pandemic, there has been an increase in demand for outsourcing tasks connected to the establishment of test kits for COVID-19. Additionally, market participants employed to boost the growth of pharmaceutical analytical testing services, including boosting collaboration and engaging in mergers and acquisitions. Without sacrificing quality or adhering to regulatory requirements, the main goal is to increase the production of test kits and pharmaceutical products that aid in detecting and treating COVID-19.

Furthermore, it is anticipated that the current demand for therapeutics and vaccines against COVID-19 would then increase the demand for sustained capabilities in many laboratories to carry out the necessary bioanalytical assays, protocols, and techniques developed during this period. This is anticipated to improve drug development and other related capabilities of these labs in case of any future pandemics and all new & existing diseases.

The extractable and leachable services segment is expected to witness aggressive competition over the forecast period, owing to an increase in the number of vendors offering these services at competitive prices. These studies are conducted to comprehend the potential for impurities in formulation to escape after packaging, which will aid in creating the best drug delivery system with the greatest therapeutic impact.

For instance, if a product is being investigated for a parenteral route of administration, scientists must conduct the leaching test for the glass vials and ampoules to determine whether any toxicities may arise in the final formulation. Popular categories for services are those based on products. Vendors currently provide the following services:

• Lyophilized product

• Nasal sprays

• Injectables (vials and bags)

• Packaging components such as tubes, foils, gaskets, etc.

Pharmaceutical industry players frequently shortlist and choose analytical testing companies based on their service offerings, price, domain expertise, and past performance. For new entrants in this market, finding prospects and closing deals are challenging tasks. As a result, new businesses are forced to offer their services for less money, which lowers their profit margins and increases their financial burden.

Furthermore, performance is always a crucial factor when pharmaceutical companies place more emphasis on outsourcing product testing. Future disagreements may result from failure to achieve the desired performance levels. This would restrict the growth of the U.S. pharmaceutical analytical testing outsourcing market in the forthcoming years.

Services Insights

The market is divided into bioanalytical testing, method development and validation, stability testing, and other testing services based on the type of service provided. The bioanalytical testing outsourcing services segment is further classified into clinical and non-clinical sub-group, while the method development and validation services were narrowed down to extractable and leachable, impurity method, technical consulting, and other method validation services.

The stability testing services segment has been bifurcated into drug substance, stability indicating method validation, accelerated stability testing, photostability testing, and other stability testing methods. The other testing services segment accounted for the maximum revenue share of the U.S. pharmaceutical analytical testing outsourcing market of 39.8% in 2021. The segment is likely to remain dominant even during the forecast years.

The bioanalytical testing segment is expected to rise with the fastest CAGR of 8.6% over the forecast period due to rising R&D spending by players in the biopharmaceutical industry and a preference for outsourcing analytical testing. The segment for bioanalytical testing has expanded as a result of the rising number of clinical trial registrations and the entry of new players into the market over the past decades.

In bioanalytical testing, drugs, formulations, or active ingredients are analyzed inside of biological systems like blood, urine, serum, and tissue. The sector can be broadly divided into clinical and non-clinical bioanalytical testing and is anticipated to experience profitable growth during the forecast period. Due to strict regulatory frameworks surrounding the process of drug discovery and development and the rising number of clinical trials, clinical bioanalytical testing is anticipated to grow at the fastest rate of any segment.

End-use Insights

The pharmaceutical companies segment accounted for a revenue share of 47.4% in 2021. This growth is anticipated to be fueled by several factors, including an increase in product development activities, rising corporate R&D spending, and the need to create novel therapies. For instance, Pace Analytical Services acquired Drug Delivery Experts, LLC in July 2021. DDE, a CDMO as well, focuses on the development of combined drug-device products and complicated injectable drug formulations.

Due to the acquisition, the company would be able to help an increasing number of clients who need assistance during the drug development process and contribute expertise in extended-release injectable technologies and drug-device combo products. Such U.S. developments would increase the demand in the market.

The biopharmaceutical companies segment is expected to register the fastest CAGR of 8.3% over the forecast period. The International Council for Harmonization (ICH) Q3D elemental impurities guideline and ICH M7 guideline implementation is among the new regulatory requirements. This regulatory guideline's main goal is to offer a useful framework for categorization, qualification, and identification. Pharma companies would be able to enhance the drug development process to these changes in regulatory requirements.

The primary factors most likely to drive the growth of the segment for biopharmaceutical companies over the forecast period include an increase in clinical trial registrations and new entrants into the market over the past ten years.

Key Companies & Market Share Insights

Mergers, acquisitions, and partnerships among others were the key strategies adopted by key players to maintain their market share. For instance, In April 2018, WuXi AppTec announced the opening of its expanded Laboratory Testing Division (LTD) facility in new jersey. Drug developers can move their projects more rapidly from labs to patients due to the recent facility, which would expand the company’s integrated testing service portfolio. The combined New Jersey operation of LTD would be one of the country’s largest preclinical and clinical drug development testing facilities after the expansion. 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

• Pharmaceutical Product Development, LLC.

• Wuxi AppTec, Inc.

• Boston Analytical

• Charles River Laboratories

U.S. Pharmaceutical Analytical Testing Outsourcing Market Report Scope

U.S. Pharmaceutical Analytical Testing Outsourcing Market Segmentation

This report forecasts revenue growth at the country level 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 U.S. pharmaceutical analytical testing outsourcing market report based on services and end-use:

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

  • Bioanalytical Testing

    • Clinical

    • Non-clinical

  • Method Development and Validation

    • Extractable and Leachable

    • Impurity Method

    • Technical Consulting

    • Other Method Validation Services

  • Stability Testing

    • Drug Substance

    • Stability indicating method validation

    • Accelerated stability testing

    • Photostability Testing

    • Other stability testing methods

  • Other Testing Services

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

  • Pharmaceutical Companies

  • Biopharmaceutical Companies

  • Contract Research Organizations