Global Formulation Development Outsourcing Market Size

Formulation Development Outsourcing Market Analysis

The Global Formulation Development Outsourcing Market size is estimated at USD 26.56 billion in 2024, and is expected to reach USD 35.81 billion by 2029, growing at a CAGR of 6.16% during the forecast period (2024-2029).

Amid the COVID-19 pandemic, countries' health systems are rapidly investing in research and development to combat the virus, having a significant impact on the formulation development outsourcing market. For instance, in October 2020, AiPharma joined a global consortium of pharmaceutical, manufacturing, and distribution leaders to advance oral antiviral Avigan/Reeqomus for COVID-19. As a part of the consortium, AiPharma commercializes all formulations of favipiravir, a broad spectrum oral antiviral drug that targets COVID-19 and 11 other infectious diseases. Thus, the onset of the pandemic has significantly benefitted the formulation development outsourcing market. Moreover, as per an article titled 'Pharmaceutical Technology, 2021 Outsourcing Resources Supplement', published in August 2021, the pharmaceutical outsourcing market has seen a growth in vaccine development and manufacturing activity in the past year, particularly due to the industry's response to the COVID-19 pandemic. As a result of which, there has been an increase in the formulation development outsourcing activities, thereby contributing to the market growth.

Furthermore, the major factors fueling the market growth are the increasing trend of patent protection expiration of major drugs and the rising number of pharmaceutical and biopharmaceutical companies outsourcing their services. The increasing trend of patent protection expiration of major drugs is driving the market growth. For instance, as per a 2021 update by the Generics and Biosimilar Initiative, as part of ongoing action to improve the quality of generics and ensure an efficient and competitive generics market, the Korean Ministry of Food and Drug Safety (MFDS) announced that 158 patents for pharmaceutical products were anticipated to expire in 2021. As per the same source, the MFDS's Green List (a list similar to the US Food and Drug Administration's (FDA) Orange Book) shows that 44 of the patents will be ready for immediate generics entry, having no other patents on the products involved. Thus, this increases the need for formulation development outsourcing for newer candidates, thereby contributing to the market growth.

However, structural changes in the pharmaceutical industry and insufficient funding to perform the drug development process through formulation development are the major factors hindering the market growth.