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Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021-2026)

The Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market can be segmented by Service Type - CMO Segment (Active Pharmaceutical Ingredient (API) Manufacturing, Finished Dosage Formulation (FDF) Development and Manufacturing, Secondary Packaging), Research Phase - CRO Segment (Preclinical, Phase I, Phase II, Phase III, Phase IV), and Geography.

Market Snapshot

Pharmaceutical CDMO Market Overview
Study Period: 2019- 2026
Base Year: 2020
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: 6.5 %

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Market Overview

The global pharmaceutical CDMO market (henceforth referred to as the market studied) was valued at USD 160.12 billion in 2020, and it is expected to reach USD 236.61 billion by 2026, registering a CAGR of 6.5% during the forecast period. The CMO/CDMO service sector is uniquely positioned to address some of the challenges that drug developers are facing amid the COVID-19 pandemic. This pandemic has impacted multiple aspects of the pharma and biopharma industry, from drug development, clinical trials, supplies, manufacturing to supply chain logistics. However, the drug shortages due to COVID-19 are limited, and they are expected to remain so for the short term due to stockpiles of pharmaceuticals, APIs globally. Since lockdowns were imposed, ­supply from Chinese manufacturing facilities was significantly reduced. The major extent has been a number of typical workforces who were unable to return to work, which led to underutilized efficiency across multiple levels in the industry. Furthermore, short-term scarcities were announced by the US Food and Drug Administration (FDA) back in February 2020 due to API manufacturing delays.

  • The biggest factor boosting the growth of CMOs in the pharmaceutical industry in the Asia-Pacific region is the growing need for robust processes and production technologies, which have proven highly effective in meeting regulatory requirements.
  • CMOs have been consolidating as a means of improving profitability in the competitive market. Through consolidation, the large CMOs can expand their geographical presence and penetrate into niche markets. The small CMOs can use the technical expertise and resources of larger CMOs.
  • For instance, in January 2020, South Korea's Celltrion, a biosimilar maker, announced plans to invest USD 514 million over five years for its new plant in Wuhan, which will be China's biggest biologics facility with a capacity of 120,000 liters. The new facility is designed to develop and manufacture its own biologics for the local market and performing contract work for the emerging wave of Chinese biotech companies.
  • Also, Bora Pharmaceuticals is one of the premier pharmaceutical companies in Taiwan. The company's operations cover the entire pharmaceutical supply chain, from R&D all the way to sales and distribution. With its US FDA, MHRA, and PIC/S certified facilities, Bora offers R&D, CDMO, and CMO services to Taiwan's domestic and global pharmaceutical companies. The company has recently established its footprint in the North American market by setting up a sales office in Delaware.
  • India's CMO market is expected to grow not only due to the country's large population base but also due to a sharp increase in demand for injectable drugs, especially in cancer research. With the injectable drugs industry providing substantially higher returns as compared to other drug formulation types, the higher ROI and therapeutic efficiency are anticipated to boost the growth of the CMO sector in the country.
  • R&D 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 R&D to produce better drugs at cheaper costs. This provides the pharmaceutical companies with a considerable competitive advantage, as price and function are the only competitive variables in the pharmaceutical and biotechnology market.
  • R&D sections of several pharmaceutical companies, especially operating at small scales, were condensed after the emergence of CRO players. As more CROs have started to offer research services at a valuable cost, they won the competition with in-house pharmaceutical R&D departments. CROs also follow several strategies to stay ahead of top pharmaceutical players.
  • They often partner with drug development companies rather than completely taking responsibility for R&D activities. This helps the CROs to gain more clients, as they gain valuable knowledge and experiences from these collaborations with innovative drug companies.
  • Additionally, 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 pharmaceutical companies. In the preferred provider model, the pharmaceutical company or the developer may 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

Contract manufacturing is a form of outsourcing where a manufacturer enters a formal agreement with another manufacturing firm for its parts, products, or components. The former manufacturer uses these in its manufacturing process for manufacturing its products. The study provides a granular view of the current CMO industry, with a further breakdown of each segment by region.

A contract manufacturing organization (CMO) is an organization that serves the pharmaceutical industry and provides clients with comprehensive services, from drug development to manufacturing. Outsourcing to a CMO allows the pharmaceutical clients to expand theIR technical resources without increased overhead. The client can manage its internal resources and costs by focusing on its core competencies and high-value projects while reducing or not adding infrastructure or technical staff.

The study provides a granular view of the current CMO industry, with a further breakdown of each segment by region, as listed in the index.

By Service Type – CMO Segment
Active Pharmaceutical Ingredient (API) Manufacturing
Finished Dosage Formulation (FDF) Development and Manufacturing
Solid Dose Formulation
Liquid Dose Formulation
Injectable Dose Formulation
Secondary Packaging
By Research Phase – CRO Segment
Pre-clinical
Phase I
Phase II
Phase III
Phase IV
By Geography- Global Pharmaceutical CMO
North America
Segmentation by Service Type
Segmentation by Country
United States
Canada
Europe
Segmentation by Service Type
Segmentation by Country
United Kingdom
Germany
France
Italy
Rest of Europe
Asia Pacific
Segmentation by Service Type
Segmentation by Country
China
India
Japan
Australia
Rest of Asia Pacific
Latin America
Segmentation by Service Type
Segmentation by Country
Brazil
Mexico
Argentina
Rest of Latin America
Middle East and Africa
Segmentation by Service Type
Segmentation by Country
United Arab Emirates
Saudi Arabia
South Africa
Rest of Middle East and Africa
By Geography- Global Pharmaceutical CRO
North America
Europe
Asia Pacific
Latin America
Middle East and Africa

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Key Market Trends

Increasing Investment in R&D expected to Drive the Market

  • The United States is the world’s largest market for drugs and accounts for almost half of the R&D spending in the pharmaceutical and biotechnology markets. Hence, CMOs play a critical role in this market and have invested in new facilities and technologies to cater to a wide range of outsourcing units.
  • Besides capturing the benefits of a location in Asia through an in-house investment, companies are also turning to research-based partnerships as a way of high-end sourcing expertise, building drug discovery, and manufacturing investment in Asia.
  • The biggest Chinese professional manufacturer of dermatology and anti-tuberculosis drug products, Huapont, is one of the fastest-growing pharmaceutical manufacturers in China, mainly dependent on product R&D and market expansion.
  • CRO/CMOs are able to leverage their expertise, owing to their R&D and complex manufacturing capabilities, to fill the needs of the large generic, big pharmaceutical, and biotech companies.
  • The highly fragmented nature of the US pharmaceutical contract manufacturing market, with over 150 CMOs, results in price competition and drives down CMO revenue.
  • A major stake of R&D investments and capacity expansions is likely in the injectable and sterile liquid dose formulations segment. Small biotech firms get access to specialized knowledge and resources, which help them expedite their R&D activities.
  • Greater technological complexity in drug development and greater specificity in disease targets have helped raise average R&D costs, as firms now identify drugs with particular molecular characteristics as opposed to using trial-and-error methods to find compounds that work in some desired way.
Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market

North America is Estimated to hold the largest market for CRO

  • North America is the largest market for contract research organizations (CRO), with the United States leading the market, followed by Canada. The dominance of the region is due to the presence of many pharmaceutical companies and extensive drug development activity, especially in the United States.
  • Moreover, the region has a strong foothold of CROs, which contributes to the growth of the market. Some of them include IQVIA Holdings Inc., Pharmaceutical Product Development LLC, PRA Health Sciences Inc., PAREXEL International Corp, and Laboratory Corporation of America Holdings, among others.
  • In April 2020, CRO services firm IQVIA kick-started a new matchmaking trial service to “accelerate treatment and vaccine development” against the COVID-19 outbreak. The COVID-19 Trial Matching Tool runs at c19trials.com, which the company says is one of the world’s first online platforms that match individuals with specific COVID-19 studies, and it hopes it would help speed up clinical practice research projects.
  • In April 2020, FHI Clinical Inc. announced that it had partnered with Infectious Disease Research Institute (IDRI), a Seattle-based not-for-profit organization, to offer full-service CRO capabilities for an immunotherapy clinical trial to combat moderate to severe cases of COVID-19.
  • FHI’s extensive experience in past outbreaks and global epidemics positions them to lead a diligent, coordinated response while offering high-quality services in this rapidly evolving public health crisis.
  • Growing investment for accelerating CRO’s capabilities is expected to boost the market’s growth positively. For instance, in August 2019, Signant Health, a US provider of technology for clinical research, launched the Signant Health Partner Program, a significant investment the company is making to help CROs to better serve sponsors in the areas such as patient experience, patient data, clinical supplies, and endpoint quality solutions. By becoming a signant partner, CROs would benefit from new commercial and operational advantages that only come with membership.
Pharmaceutical CDMO Market

Competitive Landscape

The CDMO Market is consolidated in nature. The need for continued research and development-related expenses push forward for the extension of business opportunities. In the pharmaceutical industry, medicine is continuously tested and is most profitable during the patent period; the emergence of competitive solutions can hamper the return rate. Such factors push for continued innovation and fast-track the introduction time to market. Major players include Catalent Inc., Recipharm AB, Jubilant Life Sciences Ltd.

  • January 2021- Samsung Bioepis Co. Ltd announced its expansion into the Asia-Pacific region in Korea with a 52,000 square feet campus to become the hub of Samsung Bioepis’ drive for accelerated development of next-generation biologic medicines.
  • January 2021- SGS announced the acquisition of the lab facilities of ISL, a laboratory providing analytical services for pharmaceutical products and substances based in Ringaskiddy (Cork), Ireland. Post-transfer, ISL becomes the strategic component of SGS’s global life sciences laboratory network, and ISL is expected to continue pharmaceutical quality control testing and support Novartis’ major manufacturing operations.
  • January 2021- Parexel and Signify Health today announced a strategic collaboration to provide customers with new solutions to enable access to a more diverse and traditionally underrepresented population for their clinical trials. The partnership will focus on improving patient access to clinical trials, bringing studies to patients in their own homes.

Recent Developments

  • January 2021- CMIC Co Ltd. joined the Decentralized Trials & Research Alliance (DTRA), an alliance seeking to accelerate the broad adoption of decentralized clinical trials, as a Founding Company. CMIC would join the DTRA Leadership Council, effectively advancing decentralized trials in Japan by strengthening its connection with respective organizations and companies in the United States.
  • December 2020- Syneos Health announced the acquisition of Illingworth Research Group, a prominent clinical research home health services provider. With healthcare already becoming more local, COVID-19 has accelerated the need for in-home clinical trial services, which have realized increasing demand in recent years.
  • October 2020- Parexel, to accelerate the development and delivery of innovative therapies to improve world health, from clinical through commercialization, announced that its Biotech division has entered a strategic collaboration with Synairgen plc, a respiratory drug discovery, and development company, to conduct a pivotal phase III study of an interferon beta (IFN-beta) treatment for patients hospitalized with COVID-19.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.2.1 Porter's Five Forces Analysis for CMO

      2. 4.2.2 Porter's Five Forces Analysis for CRO

    3. 4.3 Industry Value Chain Analysis

    4. 4.4 Industry Policies

    5. 4.5 Impact of COVID-19 on Pharmaceutical Industry

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

    2. 5.2 Market Restraints

    3. 5.3 Emphasis on Solid-based Oral Dosage Formulations

    4. 5.4 Qualitative coverage on the 3D printing developments in the OSD segment

  6. 6. Technology snapshot

    1. 6.1 Dosage Formulation Technologies

    2. 6.2 Dosage Forms by Route of Administration

    3. 6.3 Key Considerations for Outsourcing of Pharmaceutical R&D

    4. 6.4 Major Segments in CRO – Bio Analytical Testing, Central Laboratory Testing, and cGMP Testing

  7. 7. MARKET SEGMENTATION

    1. 7.1 By Service Type – CMO Segment

      1. 7.1.1 Active Pharmaceutical Ingredient (API) Manufacturing

      2. 7.1.2 Finished Dosage Formulation (FDF) Development and Manufacturing

        1. 7.1.2.1 Solid Dose Formulation

        2. 7.1.2.2 Liquid Dose Formulation

        3. 7.1.2.3 Injectable Dose Formulation

      3. 7.1.3 Secondary Packaging

    2. 7.2 By Research Phase – CRO Segment

      1. 7.2.1 Pre-clinical

      2. 7.2.2 Phase I

      3. 7.2.3 Phase II

      4. 7.2.4 Phase III

      5. 7.2.5 Phase IV

    3. 7.3 By Geography- Global Pharmaceutical CMO

      1. 7.3.1 North America

      2. 7.3.2 Segmentation by Service Type

      3. 7.3.3 Segmentation by Country

        1. 7.3.3.1 United States

        2. 7.3.3.2 Canada

      4. 7.3.4 Europe

        1. 7.3.4.1 Segmentation by Service Type

        2. 7.3.4.2 Segmentation by Country

          1. 7.3.4.2.1 United Kingdom

          2. 7.3.4.2.2 Germany

          3. 7.3.4.2.3 France

          4. 7.3.4.2.4 Italy

          5. 7.3.4.2.5 Rest of Europe

      5. 7.3.5 Asia Pacific

        1. 7.3.5.1 Segmentation by Service Type

        2. 7.3.5.2 Segmentation by Country

          1. 7.3.5.2.1 China

          2. 7.3.5.2.2 India

          3. 7.3.5.2.3 Japan

          4. 7.3.5.2.4 Australia

          5. 7.3.5.2.5 Rest of Asia Pacific

      6. 7.3.6 Latin America

        1. 7.3.6.1 Segmentation by Service Type

        2. 7.3.6.2 Segmentation by Country

          1. 7.3.6.2.1 Brazil

          2. 7.3.6.2.2 Mexico

          3. 7.3.6.2.3 Argentina

          4. 7.3.6.2.4 Rest of Latin America

      7. 7.3.7 Middle East and Africa

        1. 7.3.7.1 Segmentation by Service Type

        2. 7.3.7.2 Segmentation by Country

          1. 7.3.7.2.1 United Arab Emirates

          2. 7.3.7.2.2 Saudi Arabia

          3. 7.3.7.2.3 South Africa

          4. 7.3.7.2.4 Rest of Middle East and Africa

      8. 7.3.8 By Geography- Global Pharmaceutical CRO

        1. 7.3.8.1 North America

        2. 7.3.8.2 Europe

        3. 7.3.8.3 Asia Pacific

        4. 7.3.8.4 Latin America

        5. 7.3.8.5 Middle East and Africa

  8. 8. COMPETITIVE LANDSCAPE – COMPANY PROFILES

    1. 8.1 CMO Vendors

      1. 8.1.1 Catalent Inc.

      2. 8.1.2 Recipharm AB

      3. 8.1.3 Jubilant Life Sciences Ltd

      4. 8.1.4 Patheon Inc.

      5. 8.1.5 Boehringer Ingelheim Group

      6. 8.1.6 Pfizer CentreSource

      7. 8.1.7 Aenova Holding GmbH

      8. 8.1.8 Famar SA

      9. 8.1.9 Baxter Biopharma Solutions

      10. 8.1.10 Lonza Group

    2. 8.2 CRO Vendors

      1. 8.2.1 CMIC Holdings Co. Ltd

      2. 8.2.2 Covance Inc.

      3. 8.2.3 Syneos Health Inc.

      4. 8.2.4 LSK Global Pharma Service Co. Ltd

      5. 8.2.5 Novotech Pty Ltd

      6. 8.2.6 PAREXEL International Corporation

      7. 8.2.7 Pharmaceutical Product Development LLC

      8. 8.2.8 PRA Health Sciences Inc.

      9. 8.2.9 Quanticate Ltd

      10. 8.2.10 IQVIA Holdings Inc.

      11. 8.2.11 SGS Life Science Services SA

      12. 8.2.12 Hangzhou Tigermed Consulting Co. Ltd

      13. 8.2.13 Samsung Bioepis Co. Ltd

      14. 8.2.14 WuXi AppTec Inc.

      15. 8.2.15 Sagimet Biosciences (3V Biosciences Inc.)

  9. 9. Investment Scenario

  10. 10. Future OUTLOOK of the Global Pharmaceutical Contract Development AND Manufacturing Market

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Frequently Asked Questions

The Pharmaceutical CDMO Market market is studied from 2019 - 2026.

The Pharmaceutical CDMO Market is growing at a CAGR of 6.5% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2020.

Catalent Inc., Recipharm AB, Jubilant Life Sciences Ltd., Patheon Inc., Boehringer Ingelheim Group are the major companies operating in Pharmaceutical CDMO Market.

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