Global Active Pharmaceutical Ingredients CDMO Market Size (2024 - 2029)

Active Pharmaceutical Ingredients CDMO Market Analysis

The Global Active Pharmaceutical Ingredients CDMO Market size is estimated at USD 118.09 billion in 2024, and is expected to reach USD 178.47 billion by 2029, growing at a CAGR of 8.61% during the forecast period (2024-2029).

Various factors, such as increasing pharmaceutical research and development investment, rising demands for generic drugs, complex manufacturing, and patent expiration, will lead to market growth during the forecast period.

The increase in pharmaceutical research and development (R&D) investment is one of the factors significantly driving the market growth. The rise in pharmaceutical R&D investment is expected to fuel the adoption of active pharmaceutical ingredient (API) contract development and manufacturing organizations (CDMO) to develop APIs. For instance, the report published by the European Federation of Pharmaceutical Industry and Associations in June 2023 highlighted that pharmaceutical companies invested USD 49,112 million in R&D in Europe in 2022. Additionally, the same source reported that the R&D investments were majorly allocated to clinical trials (49.2%), followed by pre-clinical functions (14.7%) and pharmacovigilance (12.9%). Thus, significant investments by pharmaceutical companies are the primary factors expected to boost the market during the forecast period.

In addition, the increasing demand for generic drugs due to the growing burden of chronic diseases contributes significantly to the market growth. Generic drugs are used to treat complicated chronic disorders like cancers, cardiovascular disorders, neurological disorders, and infections. For instance, an article published by the National Institutes of Health in July 2023 mentioned that about 10.5 million people had dementia in 2022, which is expected to increase to 18.7 million in 2050. Moreover, according to 2023 updated data published by the International Diabetes Federation, diabetic patients are expected to reach 643 million and 784 million globally by 2030 and 2045, respectively. Thus, the increase in chronic disease prevalence is anticipated to fuel the demand for generic drugs, further strengthening the market growth of API CDMO during the forecast period.

The market players have adopted various strategies to expand API manufacturing, further boosting market growth. For instance, in December 2022, Novasep invested approximately USD 6.3 million (EUR 6 million) to enhance its Chasse-sur-Rhône facility in France. The investment focused on improving the site's capabilities in handling advanced APIs related to specialized medical fields, including oncology, central nervous system (CNS) disorders, and infectious diseases. Additionally, in May 2022, Piramal Pharma Solutions stated that the company's new active pharmaceutical ingredient (API) plant in Aurora, Ontario, went online and completed its initial production runs. Thus, such initiatives are anticipated to drive the API CDMO market growth during the forecast period.

Hence, increasing R&D investments and rising demand for generic drugs due to the growing burden of chronic diseases among patients are the major factors driving the market growth. However, compliance issues while outsourcing and concerns about data quality and security are expected to affect the market growth of API CDMO during the forecast period.

Active Pharmaceutical Ingredients CDMO Industry Segmentation

As per the scope of this report, an active pharmaceutical ingredient (API) is the part of the drug that produces the intended effects. It is the biologically active component of a drug product, such as a capsule, tablet, injectable, or cream. Traditionally, pharmaceutical companies would produce APIs. However, in recent years, many companies have opted to outsource the production of API, as most companies have realized that the returns on investments have been worthwhile. With the right outsourcing partner, the advantages outweigh the potential risks.

The active pharmaceutical ingredients CDMO market is segmented by molecule type, synthesis, drug type, workflow, application, and geography. By molecule type, the market is segmented into small and large molecules. By synthesis, the market is segmented into biotech and synthetic. By drug type, the market is segmented into innovative and generics. By workflow, the market is segmented into clinical and commercial. The market is segmented by application into cardiology, oncology, ophthalmology, neurology, orthopedic, and other applications. The market is segmented by geography into North America, Europe, Asia-Pacific, the Middle East and Africa, and South America. For each segment, the market size is provided in terms of USD value.