The pharmaceutical contract development and manufacturing organization (cdmo) market was valued at USD 150.66 billion in 2019 and is expected to reach USD 246.24 billion by 2025, at a CAGR of 8% over the forecast period 2020 - 2025. For the Contract Manufacturing Outsourcing (CMO), the growing demand for generic medicines and biologics, the capital-intensive nature of the business, and the complex manufacturing requirements, many pharmaceutical companies have identified the potential profitability in contracting with a CMO for both clinical and commercial stage manufacturing. In the case of CRO's research and development is one of the largest key areas of investment in the pharmaceutical and biotech industry. Companies spend a high share of their capital and profits on research and development to produce better drugs at cheaper costs. This provides the pharma companies with a considerable competitive advantage, as price and function are the only competitive variables in the pharma and biotech market.
Increased competition and shrinking profit margins have compelled pharma companies to revisit their production processes on drug R&D, instead of manufacturing the formulated drug to stay competitive in the market. The biggest factor driving the growth of CMOs in the pharmaceutical industry is the growing need for state-of-the-art processes and production technologies, which have proven highly effective in meeting regulatory requirements.
CMOs are consolidating as a means of improving profitability in this crowded and competitive market. Through consolidation, large CMOs can expand their geographic presence and penetrate niche markets, whereas, small CMOs can leverage the technical expertise and resources of larger CMOs.
The United States as a nation is one of the largest R&D spenders in the pharmaceutical and biotechnology sector. According to Axios, a prominent online News company in the United States, as of 2018, pharmaceutical industries in the country have the tenth highest average after-tax profit levels when compared to more than 100 different industries. Also, it is estimated that while drug companies are responsible for 23% of the US health revenue, they also make 63% of the total profits.
Further, the business models followed by CROs are putting them at a considerable advantage in the current market scenario. Currently, CROs either run in a preferred provider model or make strategic alliance partnerships with pharma companies. In the preferred provider model, the pharma company or the developer will get an exclusive price for CRO services, in exchange for guaranteeing a big part of the work to be outsourced to the CROs.
Scope of the Report
The pharmaceutical contract development and manufacturing market study is classified as Contract Manufacturing Outsourcing (CMO) and Contract Research Organization (CRO) which are further segmented based on type, research phases, geography relevant to the market. In the CMO service type breakup for the regional level has been considered for the study. CRO market scope is limited only to the regional level as against CMO where country-level segmentation is also present.
Key Market Trends
Focus on Pre-clinical Development Services in CMO
- The biopharma industry has been consistently growing at a robust rate for the past five years. Being the largest and a consistently fast-growing segment of the healthcare industry, significant expansion is expected in the CMO market, reflecting demand, as many of the pharmaceutical companies continue to outsource.
- CMOs are focusing more on pre-clinical development services, such as formulation development, process support, process development, clinical trial manufacturing, analytical services, and regulatory support, in addition to offering lifecycle management and technology transfer capabilities.
- In-house pre-clinical development services and technology transfer are translated into higher overhead costs for pharma companies compared to outsourcing.
- One of the key trends in the last few years has been the emergence of CMOs in emerging markets, particularly in the BRIC nations (Brazil, Russia, India, and China). India and China are among the fastest growing segments in the APAC region. However, issues with delivery, service, and product quality are restraining this market.
- Over the forecast period, Asia-Pacific is expected to witness the highest growth in the CRO market, owing to the low cost offered by the region, as compared to the United States and other developed economies. Additionally, growing incidences of chronic and lifestyle diseases, such as diabetes and heart disease, coupled with ease of patient recruitment and availability of expertise for clinical trials, are few driving factors boosting growth in the region.
- With increasing privatization of clinical trials, there has been an increase in the outsourcing of research processes in developing regions, such as China and India. For instance, the market is witnessing increased outsourcing of research services, such as Clinical Data Management, Pharmacovigilance, Biostatistics, etc., by large pharmaceuticals.
- Growing investments by several pharmaceutical and biopharmaceutical drugs manufacturing companies are also supporting the growth of the CRO market in the region. As part of its five-year Research, Innovation, and Enterprise 2020 plan, the Singaporean government has committed to invest nearly USD 2.4 billion, in advancing manufacturing and engineering in the pharmaceutical market.
- In January 2019, Lambda, headquartered in India, announced the acquisition of US-based Novum Pharmaceutical Research Services, in a move to increase its presence in the United States.
The market is slightly consolidated in both the CMO and CRO segment. The need for continued research and development related expenses push forward for the extension of business opportunities. For instance, in the pharmaceutical industry, medicine is continuously tested and are most profitable during the patent period, the emergence of competitive solution can hamper the rate of return. Such factors push for continued innovation and fast track the introduction time to market. Partnerships, long term collaboration, mergers, and acquisitions are among the prevalent strategies in this market.
- May 2019 - Recipharm launched Recipharm Inhalation Solutions that offer pharmaceutical companies an outsourcing service for inhalation products, including metered dose inhalers (MDIs), dry powder inhalers (DPIs), and nasal sprays.
- April 2019 - LabCorp and Envigo signed an agreement to expand Covance’s non-clinical drug development capabilities and create an independent research model and services provider. Covance’s drug development division is expected to acquire Envigo’s non-clinical research services business and Envigo’s research models services business may acquire the Covance’s research products business.
- February 2019 - Jubilant Biosys, collaborated with Snafu in the CNS therapeutic area. The first collaboration with Sanofi started in 2016, to discover and develop small molecule inhibitors for multiple targets in the metabolic disorders therapeutic area.
- The market estimate (ME) sheet in Excel format.
- Report customization as per the client's requirements.
- 3 months of analyst support.
1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Introduction to Market Drivers and Restraints
4.3 Market Drivers
4.3.1 Increasing Outsourcing Volumes by Big Pharmaceutical Companies
4.3.2 Advent of CDMO Model into the Outsourcing Model
4.3.3 Increasing Investment in R&D
4.4 Market Restraints
4.4.1 Increasing Lead Time and Logistics Costs
4.4.2 Stringent Regulatory Requirements
4.4.3 Capacity Utilization Issues Affecting the Profitability of CMOS
4.5 industry Value Chain Analysis
4.6 Industry Attractiveness - Porter's Five Force Analysis
4.6.1 Threat of New Entrants
4.6.2 Bargaining Power of Buyers/Consumers
4.6.3 Bargaining Power of Suppliers
4.6.4 Threat of Substitute Products
4.6.5 Intensity of Competitive Rivalry
4.7 Industry Policies
4.8 Technology Snapshot
4.8.1 Dosage Formulation Technologies
4.8.2 Dosage Forms by Route of Administration
4.8.3 Key considerations for outsourcing of Pharma R&D
4.8.4 Major segments in CRO - Bio Analytical Testing, Central Laboratory Testing & cGMP Testing
5 MARKET SEGMENTATION
5.1 By Service Type - CMO Market Segment
5.1.1 Active Pharmaceutical Ingredient (API) Manufacturing
5.1.2 Finished Dosage Formulation (FDF) Development & Manufacturing
220.127.116.11 Solid Dose Formulation
18.104.22.168 Liquid Dose Formulation
22.214.171.124 Injectable Dose Formulation
5.1.3 Secondary Packaging
5.2 By Research Phase - CRO Market Segment
5.2.2 Phase I
5.2.3 Phase II
5.2.4 Phase III
5.2.5 Phase IV
5.3.1 For CMO Market Segment
126.96.36.199 North America
188.8.131.52.1 By Service Type
184.108.40.206.1.1 Active Pharmaceutical Ingredient (API) Manufacturing
220.127.116.11.1.2 Finished Dosage Formulation (FDF) Development & Manufacturing
18.104.22.168.1.3 Secondary Packaging
22.214.171.124.2 By Country
126.96.36.199.2.1 United States
188.8.131.52.1 By Service Type
184.108.40.206.1.1 Active Pharmaceutical Ingredient (API) Manufacturing
220.127.116.11.1.2 Finished Dosage Formulation (FDF) Development & Manufacturing
18.104.22.168.1.3 Secondary Packaging
22.214.171.124.2 By Country
126.96.36.199.2.1 United Kingdom
188.8.131.52.2.5 Rest of Europe
184.108.40.206.1 By Service Type
220.127.116.11.1.1 Active Pharmaceutical Ingredient (API) Manufacturing
18.104.22.168.1.2 Finished Dosage Formulation (FDF) Development & Manufacturing
22.214.171.124.1.3 Secondary Packaging
126.96.36.199.2 By Country
188.8.131.52.2.5 Rest of Asia-Pacific
184.108.40.206 Latin America
220.127.116.11.1 By Service Type
18.104.22.168.1.1 Active Pharmaceutical Ingredient (API) Manufacturing
22.214.171.124.1.2 Finished Dosage Formulation (FDF) Development & Manufacturing
126.96.36.199.1.3 Secondary Packaging
188.8.131.52.2 By Country
184.108.40.206.2.4 Rest of Latin America
220.127.116.11 Middle East & Africa
18.104.22.168.1 By Service Type
22.214.171.124.1.1 Active Pharmaceutical Ingredient (API) Manufacturing
126.96.36.199.1.2 Finished Dosage Formulation (FDF) Development & Manufacturing
188.8.131.52.1.3 Secondary Packaging
184.108.40.206.2 By Country
220.127.116.11.2.1 United Arab Emirates
18.104.22.168.2.2 Saudi Arabia
22.214.171.124.2.3 South Africa
126.96.36.199.2.5 Rest of Middle East & Africa
5.3.2 For CRO Segment
188.8.131.52 North America
184.108.40.206 Rest of the World
6 COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 CMO Vendor
220.127.116.11 Catalent Inc.
18.104.22.168 Recipharm AB
22.214.171.124 Jubilant Life Sciences Ltd.
126.96.36.199 Patheon Inc.
188.8.131.52 Boehringer Ingelheim
184.108.40.206 Pfizer CentreSource
220.127.116.11 Aenova Group
18.104.22.168 Famar SA
22.214.171.124 Baxter Biopharma Solutions
126.96.36.199 Lonza Group
6.1.2 CRO Vendors
188.8.131.52 CMIC Co. Ltd.
184.108.40.206 Covance Inc.
220.127.116.11 Syneos Health Inc.
18.104.22.168 LSK Global Pharma Service Co Ltd.
22.214.171.124 Novotech Pty Ltd.
126.96.36.199 PAREXEL International Corporation
188.8.131.52 Pharmaceutical Product Development LLC
184.108.40.206 PRA Health Sciences Inc.
220.127.116.11 Quanticate Ltd.
18.104.22.168 IQVIA Holdings Inc.
22.214.171.124 SGS SA (SGS Life Sciences)
126.96.36.199 Hangzhou Tigermed Consulting Co Ltd.
188.8.131.52 Samsung Bioepis Co. Ltd.
184.108.40.206 WuXi AppTec Inc.
220.127.116.11 3V Biosciences Inc.
7 INVESTMENT ANALYSIS
8 MARKET OPPORTUNITIES AND FUTURE TRENDS