The market was valued USD 65.10 billion in 2016 and is projected to reach USD 94.38 billion by 2022, at a CAGR of 6.36% during the forecast period, from 2017 to 2022.
Contract manufacturing refers to the outsourcing of certain production activities to third-party vendors; pharmaceutical companies give the chemical formula of a drug to be manufactured to these pharmaceutical contract manufacturers (CMO). Major factors driving the growth of CMOs in the pharmaceutical industry are the growing need for state-of-the-art processes and production technologies, which have proven highly effective in meeting regulatory requirements. The market is consolidated with big players holding a major share. Some of the trends that are estimated to exert a positive influence on the market are the patent expiration of major therapeutic brands, growing demand for generic drugs, and adoption of novel manufacturing technologies. Further, increased competition and shrinking profit margins have compelled pharma companies to revisit their production processes and R&D of the drugs, to stay competitive in the market. In this scenario, contract manufacturing turns out to be a strategic option, which boosts the market growth, exponentially. However, without the right packaging, drugs may get damaged in transit or exposed to contaminants that limit their effectiveness, which might hinder the market growth.
The global pharmaceutical contract manufacturing market is segmented, by type, into active pharmaceutical ingredient (API), final dosage formulation (FDF) and secondary. The active pharmaceutical ingredient packaging segment constitutes a major share of the market. The rise in the demand for abbreviated new drug applications (ANDA) and an increase in filing drug master files (DMF) from Indian companies have fueled the growth of the API market. Most of the companies in this industry are increasingly focusing on the development of biological APIs, which is driving this market. Other factors propelling the growth of the API market include stringent government initiatives in the healthcare sector, innovation in biologics and high potency API, and rise in the incidence of cancer and age-related diseases. Captive manufacturers are, currently, leading the API market; however, they are expected to lose the market share to contract manufacturers, by the end of forecast period. This is due to the complex and expensive in-house manufacturing of API and rise in competition from emerging players in this industry
By region, the market is segmented into five regions, namely, North America, Europe, Asia-Pacific, Latin America and the Middle East & Africa. North America holds the major share of the market, with an approximate share of 36%, followed by Europe and Asia-Pacific. In terms of growth, Asia-Pacific is estimated to witness the highest growth, owing to the presence of emerging markets, such as China, India and Japan.
Major players in this market are:
Key Deliverables in the Study