Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Pharmaceutical CDMO Market Analysis

The pharmaceutical CDMO market is expected to register a CAGR of 7.29% during the forecast period. The contract development and manufacturing organization outsourcing market may expand due to the expanding pharmaceutical sector. The key trend affecting the market's growth is the growing usage of analytics by CDMOs.

• A growing number of pharmaceutical companies recognized the potential profitability of working with a CMO for clinical and commercial-stage manufacturing due to the increasing demand for generic drugs and biologics, the capital-intensive nature of the industry, and the complex manufacturing requirements.
• The development of new therapeutic modalities focused on personalized medicine, emerging biopharma companies, consumer demand for more affordable medications and higher levels of productivity, and technological advancements, like artificial intelligence and digitization, are some of the main factors driving the growth of the CRO industry.
• Pharmaceutical outsourcing evolved from basic processes, namely bottling, to more value-added techniques, such as medical device engineering and R&D. The active process-outsourcing experience, the increasing number of patients subject to medical procedures, and the improvements in illness detection and diagnosis in developing countries are the factors driving the growth of the market.
• There has been a gradual change in the working principles of the companies in the market. The pattern shift from cost-control to re-emphasis on value-added services has led to the redefining of CMOs to CDMOs (contract development and manufacturing organizations) and allowed their integration into the value chain of companies.
• The costs invested in R&D are continuously increasing, yet the valuable results from these processes are becoming rarer. Many companies have realized that moving this part of the business overseas and taking advantage of the still-emerging pharmaceutical markets effectively reduce costs.
• The production of the COVID-19 vaccine and the expanding biologic pipeline fuelled the CMO market, particularly the parenteral market, with unprecedented growth. The COVID-19 outbreak positively impacted the market as pharma companies suddenly faced the challenge of producing millions of vaccine doses for the global population. Many companies, such as Pfizer and AstraZeneca, transferred non-COVID-19 biologics out of their proprietary manufacturing networks to make room for the new vaccines. Due to compressed timelines and manufacturing scaling challenges for the COVID-19 vaccines and medicines, CMOs signed contract manufacturing service agreements at an unprecedented rate in the previous years.

Pharmaceutical CDMO Industry Segments

Contract manufacturing can be defined as a manufacturer entering a formal agreement with another manufacturer for its parts, goods, or components as a kind of outsourcing. The manufacturer employs these components and goods in producing its goods.

Contract development and manufacturing organization (CDMO) caters to the pharmaceutical sector and offers clients complete services, ranging from manufacturing to drug research.

The pharmaceutical CDMO market study provides a detailed breakdown of the CRO (Contract Research Organization) and CMO (Contract Manufacturing Organization) market, as the term CDMO represents organizations that provide both development and manufacturing of drugs, encompassing the overall market trends and growth projections. The study provides a granular view of the current CMO and CRO industry, with a further breakdown of each segment by region. The impact of COVID-19 on the market ecosystem and the overall ecosystem is also covered in the study. The market sizes and forecasts are provided in terms of value (USD billion) for all the above segments.

Report scope can be customized per your requirements. Click here.

Pharmaceutical CDMO Market Trends

This section covers the major market trends shaping the Pharmaceutical CDMO Market according to our research experts:

Increasing Investment in R&D Expected to Drive the Market

• The United States is one of the largest pharmaceutical markets, accounting for about half of the R&D spending in the pharmaceutical and biotech markets. CMOs play a vital role in this market, investing in new facilities and technology to serve a wide range of outsourcing entities. Companies are benefitting from their Asian footprint through in-house investments and aiming for research-based partnerships to acquire high-end sourcing expertise, build drug discovery, and invest in Asia.
• According to a survey conducted by EY in July 2022, the number of CDMOs increased over the past decade, with mergers and acquisitions (M&A) and consolidations being the main growth drivers. The EY team analyzed these deals and reviewed 92 publicly disclosed internal investments from 15 selected global CDMO companies to provide a consolidated view of the CDMO's M&A landscape. The well-positioned CDMO flexibly changed its production line to meet the increasing demand for smaller and more diverse projects. New partnerships emerged, enabling CDMO players to further drive rapid growth in capacity, helping the industry to thrive in areas such as vaccine production.
• In June 2021, Bengaluru-based Kemwell Biopharma acquired two new clients from the United States for end-to-end novel biologics projects, including development and clinical manufacturing. It continued supporting commercial drug product manufacturing for two clients despite the lockdowns to ensure uninterrupted patient supplies. It successfully manufactured over 20 batches of a commercially approved drug substance at a 2,000 l scale.
• The company also took a few expansion initiatives. It added AMBR250, a high throughput process development equipment, to its existing facility. It also expanded its bioreactor capacity by ordering 200 l and 1000 l single-use bioreactors (SUBs). The company also built India's first cGMP cell therapy manufacturing site as a CDMO during the same period.
• In January 2022, Aragen Life Sciences (formerly GVK Biosciences) stated the demand for outsourced research, development, and manufacturing services may continue to gain momentum. With the increasing demand for end-to-end integrated services, the CRO and CDMO industry is likely to consolidate in India and globally. The company added that it expects CROs and CDMOs to invest in new capabilities, build additional infrastructure, and increase their geographic footprint organically or inorganically.
• The need for proper infrastructure for the safe handling and containment of high-potency drugs, especially appropriate analytical skills for high-potency drugs and adequate project management (including proper launch, execution, and completion), may help the market for R&D stand out in the future.

To understand key trends, Download Sample Report