Pharmaceutical Contract Manufacturing Market: Strategic Partnerships Driving Scalable Growth

According to the new market research report "Pharmaceutical Contract Development and Manufacturing Market (Pharmaceutical, Biologics, Active Pharma ingredients, tablet, Parenteral, Oral Liquid, Semi-Solids), End User (Big Pharma, Small Pharma, Generic Pharma, CRO)-Global Forecast to 2026", published by MarketsandMarkets™, the global Pharmaceutical Contract Manufacturing Market is projected to reach USD 171.3 billion by 2026 from USD 120.6 billion in 2021, at a CAGR of 7.3% between 2021 and 2026.

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DRIVER: Expensive In-House drug development

Drug research and development is very expensive and long for a small and medium size pharmaceutical company. Pharmaceutical companies find another cost effective and efficient way to outsource their drug development activities to the contract development and research organisations. Furthermore, medication development requires compliance rigorous FDA criteria, and maintaining standards of quality regarding formulation development. This, in turn, adds to the internal cost of expenses on research and production of the therapeutic formulation. As a result of the rise in costs incurred in developing drugs, including discovery and pre-clinical development, clinical development, capital, and the limited funding with high rates faced with the failure of drugs in human trials, the pharmaceuticals have sought to outsource their drug development processes to contract development and manufacturing organizations.

RESTRAINT: Varying regulatory requirements across regions

The failure of the respective authority to adhere to standards and regulations, as well as the production of substandard pharmaceuticals, have significant repercussions for the business and its brand reputation. Therefore, adherence to regulatory rules is of utmost importance in the pharmaceutical industry. CDMOs sell the drug substance/formulation that they manufacture on a contract basis under their own brand. The medication development and clinical trial process necessitates the submission of substantial quantities of data to the regulatory body. Therefore, the management of the data and the submission of diverse formulations in different countries provide challenges for COMOS and heighten the likelihood of errors in regulatory filings. This aspect is expected to impede the market expansion of pharmaceutical Contract Development and Manufacturing Organizations (CDMOs) in the foreseeable future.

The Pharmaceutical Contract Manufacturing Market growth is driven mainly by factors such as rising demand for generics, increasing investments in pharmaceutical R&D, and investments in advanced manufacturing technologies by CDMOs. The increasing demand for biological therapies, growing focus on specialty medicines, growth in the nuclear medicines sector, and advancements in cell and gene therapies are also expected to offer market growth opportunities in the coming years.

The pharmaceutical manufacturing services segment accounted for the largest share of the service segment in the pharmaceutical contract development and manufacturing market in 2020.

On the basis of service, the pharmaceutical contract manufacturing market is broadly segmented into pharmaceutical manufacturing, biologics manufacturing, and drug development services. In 2020, the pharmaceutical manufacturing services segment accounted for the largest share of the market. The large share of this segment can be attributed to the limited finances of pharma manufacturers, capacity constraints, need for reductions in the time-to-market, complex manufacturing requirements, large investments required for establishing manufacturing facilities, and the growing pipeline, all of which have prompted the shift toward pharmaceutical contract manufacturing.

The big pharmaceutical companies segment accounted for the largest share of the end user segment in the pharmaceutical contract development and manufacturing market in 2020.

Based on end users, the pharmaceutical contract development market is segmented into big pharmaceutical companies, small & medium-sized pharmaceutical companies, generic pharmaceutical companies, and other end users. In 2020, big pharmaceutical companies accounted for the largest share of the pharmaceutical contract manufacturing market, and this trend is expected to continue during the forecast period. The large share of this end-user segment can be attributed to factors such as the high demand for end-to-end services in big pharmaceutical companies, rising pricing pressure and pipeline challenges in their operations (resulting in a shift toward contract development and manufacturing), and the growing need to streamline execution costs as a result of the patent expiry of blockbuster drugs.

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The Asia Pacific region is the fastest-growing region of the pharmaceutical contract development and manufacturing market in 2020.

The Asia Pacific region is estimated to grow at the highest CAGR in the pharmaceutical contract development market during the forecast period, this is mainly due to factors such as increasing investments and expansions by big pharma companies in countries such as China, India, and South Korea.

Some of the prominent players in the pharmaceutical contract development and manufacturing market include Thermo Fisher Scientific Inc. (US), Catalent, Inc. (US), Lonza Group Ltd. (Switzerland), Recipharm AB (Sweden), AbbVie Inc. (US), Aenova Group (Germany), Almac Group (UK), Siegfried Holding AG (Switzerland).

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