Market Trends of Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Industry
Increasing Investment in R&D Drives 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. Also, companies are not only reaping the benefits of their Asian footprint through in-house investments but also looking to research-based partnerships to acquire high-end sourcing expertise, build drug discovery, and invest in Asia.
- In January 2022, Aragen Life Sciences (formerly GVK Biosciences) stated that it anticipated demand for outsourced research, development, and manufacturing services to 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.
- In addition, the need for proper infrastructure for the safe handling and containment of high-potency drugs, especially the need for appropriate analytical skills for high-potency drugs and adequate project management (including proper launch, execution, and completion) is needed to stand out in the market for research and development. In January 2022, Aragen Life Sciences (formerly GVK Biosciences) stated the demand for outsourced research, development, and manufacturing services might 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.
- As pharmaceutical companies shift their target toward scientific research and pharmaceutical marketing, CDMOs can further establish themselves as vital partners and build strategic, integrated partnerships with their customers. Given the rising number of complex and high-potency compounds, CDMOs can stand out through advanced technology and specialized expertise.
- In addition, new operational approaches such as continuous manufacturing are expected to allow CDMOs to improve the efficiency of their manufacturing processes, reducing costs and wastage. CDMOs are anticipated to discover new opportunities with an increasing number of small & medium-sized pharma firms. Such small & medium-sized pharma companies are mainly accountable for the growing share of new drug approvals and often have no manufacturing capacity. According to Pharmaprojects, globally, there will be 20,109 drugs in the R&D pipeline in 2022.
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Asia-Pacific is Expected to be the Fastest-growing Region for the CRO Segment
- Asia-Pacific is anticipated to witness the highest growth in the CRO market over the forecast period due to the region's low cost compared to the United States and other developed economies. Additionally, growing incidences of chronic and lifestyle diseases, such as diabetes and heart disease, along with ease of patient recruitment and availability of expertise for clinical trials, are major driving factors boosting growth in the region.
- For instance, China has over 180 million elderly citizens suffering from chronic diseases, of whom 75% have more than one, according to the National Health Commission (NHC). Furthermore, by 2030, cardiovascular disease will cost USD 1,044 billion to the Chinese government. Similar trends for the high prevalence of diabetes are present around Asia-Pacific geographies, including China, South Korea, and Australia.
- With the increasing privatization of clinical trials, there has been an increase in research process outsourcing in developing countries such as China and India. For example, large pharmaceutical companies are increasingly outsourcing research services such as Clinical Data Management, Pharmacovigilance, Biostatistics, etc.
- There are numerous reasons why certain regions attract organizations conducting clinical trials. Some include cost, patient recruitment, required testing, and shorter timelines. The overall number of clinical trials is increasing in China, India, and Japan, making Asia-Pacific one of the potential regions. India provides preclinical services at lower costs than developed nations. Initiatives taken by the Indian government to expand the CRO potential have offered an attractive market opportunity in recent years.
- Additionally, the availability of scientific expertise in the country may boost business growth over the next few years. Clinical trials in the country are about 50% less costly than in the United States. India is one of the largest drug producers and has the most FDA-approved manufacturing plants outside the United States, giving it a competitive edge over China.
- Over the past few months, Novotechannounced numerous collaborations to facilitate the project management of clinical trials and boost biotech drug development. For instance, in July 2022, Medidata announced its renewed partnership with Novotechto continues scaling clinical studies in various therapeutic areas from 2022. With this renewed partnership, Novotechis equipped with flexible, configurable tools to address clinical research needs at scale and facilitate accelerated drug and device development in Asia Pacific and the United States.
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Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market Report Snapshots
- Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market Size
- Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market Share
- Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market Trends
- Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Companies
