PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1509675
PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1509675
Global pharmaceutical contract manufacturing market is projected to witness a CAGR of 7.07% during the forecast period 2024-2031F, growing from USD 207.06 billion in 2023 to USD 357.63 billion in 2031F. The rapid expansion of the pharmaceutical sector, increasing investments in generics, technological advancements, and successful mergers and acquisitions are some of the major drivers that are expected to aid the growth of the market.
The expansion of the market in various regions across the globe is supported by the rise in the cases of chronic diseases and disorders and infectious diseases as they propel the requirement for pharmaceutical products. According to estimates from the World Health Organization (WHO), cardiovascular diseases are one of the leading causes of death, killing approximately 17.9 million individuals every year. The augmentation of such chronic diseases will bolster the requirement for various therapeutic solutions in order to effectively treat and manage the conditions, thus providing lucrative growth opportunities to the market. This is because the drug production process requires specialized facilities and equipment, and the process of setting up a pharmaceutical production facility can often be time-consuming and economically draining. Therefore, various companies rely on pharmaceutical contract manufacturing companies to meet the growing demand for therapeutic drugs.
The growth of the market is also supported by the wide range of benefits offered by pharmaceutical contract manufacturers, including reduced time, cost efficiency, increased flexibility, and compliance benefits. Meanwhile, the increasing partnerships and acquisitions are also supporting the expansion of the market. In June 2024, Great Point Partners, LLC acquired Lyocontract GmbH. The acquisition will aid the latter in broadening their product offerings and expanding their global footprint. The capital resources of Great Point combined with the contract manufacturing capabilities of Lyocontract will allow both companies to deliver high-quality products.
Expansion of the Pharmaceutical Sector Boosts Market Demand
The rapid expansion of the pharmaceutical sector in the coming years is expected to bolster the global pharmaceutical contract manufacturing market growth. The European Federation of Pharmaceutical Industries and Association estimates that North America accounted for 53.3% of global pharmaceutical sales in 2023, and Europe accounted for 22.7% of the sales. This increase is expected to aid the expansion of the market as pharmaceutical contract manufacturing aids the optimization of operational expenses. Due to the rising demand for pharmaceutical products, various companies rely on contract manufacturing companies as they provide an agile approach for testing, assembling secondary packaging, manufacturing, and primary packaging. Thus, providing lucrative growth opportunities to the market in the coming years.
Additionally, the increasing expiration of blockbuster drugs and biologics is also expected to aid the expansion of the market. Due to this expiration, the demand for generics of blockbuster drugs is anticipated to rise, which in turn is expected to propel the demand for pharmaceutical contract manufacturing to meet this rising demand. This is because pharmaceutical companies are focused on developing novel therapeutic solutions and prefer outsourcing drug manufacturing to contract manufacturing organizations. Meanwhile, the growing threat of chronic diseases in different regions across the globe is also providing lucrative growth opportunities to the market. The increasing cases of chronic diseases are anticipated to bolster the requirement for various therapeutic solutions, which in turn is expected to augment the requirement for pharmaceutical contract manufacturing.
Increasing Prevalence of Chronic Diseases Supports Market Expansion
The rising requirement for effective therapies for treating various chronic diseases can be attributed to the growing burden of diseases in various regions across the globe. The American Cancer Society estimates that 2,001,140 new cases and 611,720 deaths related to cancer are expected to occur in 2024 in the United States. This increase in the number of cancer cases will augment the demand for oncology drugs, boosting the growth of the market. Furthermore, rising collaborations between various regulatory entities, research institutions, and pharmaceutical companies to expedite the drug development processes and foster innovation while ensuring the safety of the patients are also expected to offer lucrative growth opportunities to the market. Additionally, various companies are also investing in contract development and manufacturing facilities to address the rising demand for cancer therapies. In June 2022, Merck KGaA announced the opening of their new 70,000 square feet facility in Wisconsin, United States, to double the production capacity of their high-potency active pharmaceutical ingredients to meet the growing requirement of cancer therapies.
North America Expected to Account for Significant Market Share
The growth of the market in North America is supported by the rising requirement for generics, the expansion of the aging population, increasing cases of chronic diseases, and the strong presence of key market players in the region. The increasing prevalence of various chronic diseases and disorders, such as diabetes and cancer, in the region is bolstering the requirement for effective drugs for treating these conditions. According to estimates from the National Institute of Diabetes and Digestive and Kidney Diseases, approximately 29.7 million individuals of all ages, roughly 8.9% of the population, have been diagnosed with diabetes. The increasing cases of such conditions are propelling the requirement for effective drugs for their management and treatment, which, in turn, is augmenting the market demand.
Generic Pharmaceutical Companies are Expected to Witness Growth
The generic pharmaceutical companies are expected to witness significant growth in the coming years. This growth of the segment can be attributed to the expiration of branded drugs and the increasing requirement for generic drugs. The increasing requirement for generics can be attributed to the growing awareness of their potential to enhance healthcare accessibility by offering economically efficient alternatives to expensive biological therapies. According to estimates from the Association for Accessible Medicines (AAM), biosimilar and generic prescriptions account for 90% of the total prescriptions filled in the United States. Furthermore, the biosimilar and generic drugs generated USD 408 billion for the American healthcare system and its patients in 2022. This growth of biosimilar and generic drugs, is in turn, positively influencing the expansion of the market. Additionally, the rising prevalence of several genetic disorders, chronic diseases, and infectious diseases in various regions across the globe are propelling the requirement for safe and effective medications, thus bolstering the demand for pharmaceutical contract manufacturing as they aid in providing quality-assured products in a cost-efficient manner.
Future Market Scenario (2024-2031F)
According to the global pharmaceutical contract manufacturing market analysis, contract manufacturing is expected to play a significant role in the pharmaceutical industry in the coming years, and the integration of novel technologies, such as machine learning and artificial intelligence, is anticipated to aid in enhancing the operations of pharmaceutical contract manufacturing. The deployment of real-time monitoring solutions due to the advent of the Internet of Things (IoT) for ensuring that the quality is maintained during the production process and response is generated for any issues in a time-efficient manner is expected to enhance the reliability and efficiency of the supply chain in pharmaceutical contract manufacturing.
Key Players Landscape and Outlook
Successful mergers and acquisitions are expected to boost the global pharmaceutical contract manufacturing market size. In February 2024, Novo Holdings A/S and Catalent, Inc. announced that they have entered into a merger agreement, and Novo Holdings will be acquiring Catalent for USD 16.5 billion. Novo Holdings will be transferring Catalent's manufacturing sites to Novo Nordisk A/S to boost their efforts to meet the growing demand for their injectable obesity and semaglutide-based diabetes drugs Wegovy and Ozempic. The acquired sites are expected to aid the company's filling capacity from 2026. This investment is expected to aid Novo Nordisk in enhancing its key product offerings and providing premium manufacturing and development solutions to biotech and pharma customers.
The increase in investments by the key market players in drug production facilities is also expected to bolster the growth of the market. In May 2023, Thermo Fisher Scientific Inc. opened a drug production facility in Singapore. The facility is expected to support the company's general manufacturing and development services and the Singapore Economic Development Board (EDB). The sterile fill-finish facility contains an automated aseptic fill-finish line with advanced isolator technology for small and large-sized molecules and vaccines.
All segments will be provided for all regions and countries covered
Companies mentioned above DO NOT hold any order as per market share and can be changed as per information available during research work