Pharmaceutical CMO Market Forecasts to 2028 – Global Analysis By Service Type (Pharmaceutical Manufacturing Services and Active Pharmaceutical Ingredient (API) Manufacturing Services), Research Phase (Preclinical, Phase I, Phase II, Phase III and Phase IV

Pharmaceutical CMO Market Forecasts to 2028 – Global Analysis By Service Type (Pharmaceutical Manufacturing Services and Active Pharmaceutical Ingredient (API) Manufacturing Services), Research Phase (Preclinical, Phase I, Phase II, Phase III and Phase IV), End-User (Big Pharmaceutical Companies, Generic Pharmaceutical Companies and Small & Medium-Sized Pharmaceutical Companies) and By Geography

According to Stratistics MRC, the Global Pharmaceutical CMO Market is accounted for $187.83 billion in 2022 and is expected to reach $308.14 billion by 2028 growing at a CAGR of 8.6% during the forecast period. A contract development and manufacturing organization (CDMO), which offers clients comprehensive services ranging from manufacturing to drug development, is a business that caters to the pharmaceutical industry. Pharmaceutical clients could increase their technical capabilities without increasing their overhead by outsourcing to a CDMO. The pharmaceutical contract development and manufacturing market is made up of sales of goods and services. Some pharmaceutical companies outsource the production of their products in order to focus on research and development (R&D), marketing, and brand building for their products.

According to the CPhI Pharma Index 2020, India is the primary beneficiary of API manufacturing and CRO chemistry services outsourcing, rebalancing away from China. India has become a global pharmaceutical manufacturing hub for generic drugs and vaccines. One of the largest vaccine manufacturers, namely, the Serum Institute of India, operates from the country.

Market Dynamics

Driver

Costly internal drug development

The process of drug discovery and development is very costly and time-consuming for small and medium-sized pharmaceutical companies. Pharmaceutical companies, on the other hand, choose to outsource their drug development processes to contract development and research organizations because it is a more affordable and effective solution. Additionally, developing formulations for drugs requires adhering to strict US FDA guidelines and maintaining quality and standards. The cost of manufacturing the formulation and developing drugs internally goes up as a result. Because of the high failure rates for drugs tested on humans as well as the costs of discovery and pre-clinical development, clinical development, capital, and funding shortages, pharmaceutical companies were forced to outsource their drug development processes to contract development and manufacturing companies.

Restraint

Different regional regulatory requirements

There are serious repercussions for the company and its brand name due to the poor quality of manufactured drugs and the relevant authority's noncompliance with guidelines and regulations. As a result, compliance with regulatory requirements is essential in the pharmaceutical industry. Under the name of the contractor, the drug substance or formulation developed by CDMOs is marketed. The regulatory authority must receive a sizable amount of data as the drug moves through the development and clinical trial phases. The possibility of regulatory filing errors increases as a result of CDMOs' difficulty managing the data and submissions of various formulations across numerous countries. This factor will probably hinder pharmaceutical CDMOs' ability to grow their markets in the coming years.

Opportunity

Developing economies

The global Pharmaceutical CMO market expected to drive growth during the forecast period, due to their low labor costs and workforce advantages, emerging nations are centers for outsourcing bioprocesses. Further fueling the expansion of pharmaceutical contract development and manufacturing services in emerging markets is the growing interest of pharmaceutical companies in outsourcing drug discovery due to the constant rise in vaccine demand, the drying up of the pipeline for antibiotics, and rising R&D costs.

Threat

The beginning of serialization

Serialization is the process of giving each service or product item a unique identity by using a predetermined coding type, enabling it to be tracked and traced throughout the supply chain, due to the fact that regulatory agencies and manufacturers worldwide are concerned about counterfeiting. So, in terms of contract manufacturing, CDMOs globally must implement a strong pharma serialization solution. This necessitates a sizeable capital expenditure for the necessary software, hardware, staff training, implementation across all of their sites, equipped production lines, and qualified personnel. becoming a difficult task for a CDMO to manage. As a result, it can be seen as a challenge for the manufacturing market and pharmaceutical contract development.

Covid-19 Impact

The COVID-19 outbreak had a positive effect on the market because pharmaceutical companies were suddenly forced to produce the many millions of vaccine doses that would probably be required. To make room for the new vaccines, numerous corporations, including Pfizer and AstraZeneca, transferred non-COVID-19 biologics out of their proprietary manufacturing networks. With the start of the pandemic, CMOs signed contract manufacturing service agreements at an unprecedented rate due to condensed timelines and manufacturing scaling challenges for the COVID-19 vaccines and medications.

The pharmaceutical manufacturing services segment is expected to be the largest during the forecast period

The pharmaceutical manufacturing services segment is expected to have the largest share during the forecast period. This segment's substantial share can be attributed to factors such as the expanding biopharmaceutical and pharmaceutical markets around the world and the region's growing demand for biologics and biosimilars. A further factor driving the segment's growth is that major market players are spending money on drug development and discovery.

The phase III segment is expected to have the highest CAGR during the forecast period

The phase III segment is anticipated to witness the fastest CAGR growth during the forecast period. The most extensive long-term safety data are found in phase III trials, which are randomized, controlled, multicenter studies. Phase III studies, which more closely resemble real-world clinical practice than phase I or II trials, examine a novel drug's efficacy and safety over 6–12 months in a sizable patient population (a few hundred or more). Because it might not be morally acceptable to subject patients to several months of placebo treatment, these trials are typically carried out on an outpatient basis with no in-house days and an active comparator.

Region with largest share

The pharmaceutical contract development and manufacturing organization (CDMO) market is dominated by investors from Asia-Pacific. The majority of Chinese CMOs produce bulk drug products and APIs for approved branded and branded-generic medications. In terms of producing APIs and bulk drug ingredients, the nation recently passed India. Despite the fact that China produces APIs, the majority of CMOs can only produce liquid or solid dosage forms, and many of their factories do not have U.S. certification.

Region with highest CAGR

North America is projected to have the highest CAGR over the forecast period during the forecast period. Contract manufacturing organizations (CMOs) now provide a wide range of services in the US, having evolved from initially only providing basic manufacturing services to meet market and outsourcer demands. The steadily growing U.S. pharmaceutical industry and the increased outsourcing of large pharma companies focusing on core competencies to increase profit margins are the main drivers of the nation's pharmaceutical market. The majority of the countries are low- and lower-middle-income nations, while a small number are upper- and high-income countries that experience significant barriers to healthcare access. The companies have the right, under the licensing agreement, to a technology transfer from Gilead of the Remdesivir manufacturing process, enabling them to quickly scale up production.

Key players in the market

Some of the key players in Pharmaceutical CMO market include Aenova Holding GmbH, Almac Group Ltd., Baxter Biopharma Solutions, Boehringer Ingelheim Group, Cadila Pharmaceuticals Ltd., CMIC Holdings Co. LTD., Dr. Reddys Laboratories Ltd., Hangzhou Tigermed Consulting Co. Ltd, IQVIA Holdings Inc., Jubilant Life Sciences Ltd, Lonza Group Ltd., LSK Global Pharma Service Co. Ltd, Novotech Pty Ltd, PAREXEL International Corporation, Pharmaceutical Product Development LLC, PRA Health Sciences Inc, Quanticate Ltd, Samsung Bioepis Co. Ltd, Thermo Fisher Scientific Inc. and WuXi AppTec Inc.

Key Developments

In January 2023, Catalent supported the manufacturing of Sarepta’s most advanced gene therapy candidate, delandistrogene moxeparvovec (SRP-9001), to treat Duchenne muscular dystrophy.

In September 2022, Lonza Group collaborated with Touchlight, a biotechnology company. Lonza expanded its end-to-end offering for mRNA manufacturing with an additional source of DNA.

In February 2022, Thermo Fisher Scientific collaborated with Moderna, Inc. for the large-scale manufacturing of Moderna’s COVID-19 vaccine, Spikevax, and other investigational mRNA medicines in its pipeline.

Service Types Covered
• Pharmaceutical Manufacturing Services
• Active Pharmaceutical Ingredient (API) Manufacturing Services
• Finished Dosage Formulation (FDF) Development and Manufacturing Services
• Secondary Packaging Services
• Drug Development Services
• Biologic Manufacturing Services
• Biologic API Manufacturing Services
• Biologic FDF Manufacturing Services
• Other Service Types

Research Phases Covered
• Preclinical
• Phase I
• Phase II
• Phase III
• Phase IV
• Other Research Phases

End-Users Covered
• Big Pharmaceutical Companies
• Generic Pharmaceutical Companies
• Small & Medium-Sized Pharmaceutical Companies
• Other End Users

Regions Covered
• North America
US
Canada
Mexico
• Europe
Germany
UK
Italy
France
Spain
Rest of Europe
• Asia Pacific
Japan
China
India
Australia
New Zealand
South Korea
Rest of Asia Pacific
• South America
Argentina
Brazil
Chile
Rest of South America
• Middle East & Africa
Saudi Arabia
UAE
Qatar
South Africa
Rest of Middle East & Africa

What our report offers
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2020, 2021, 2022, 2025, and 2028
- Market Trends (Drivers, Constraints, Opportunities,Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements