Europe Pharmaceutical Contract Manufacturing Market Size (2024 - 2029)

Europe Pharmaceutical Contract Manufacturing Market Analysis

The Europe Pharmaceutical Contract Manufacturing Market size is estimated at USD 43.02 billion in 2024, and is expected to reach USD 54.94 billion by 2029, growing at a CAGR of 5.01% during the forecast period (2024-2029).

• By outsourcing production, pharmaceutical companies can focus on core competencies like research and development, marketing, and sales. Contract manufacturers bring expertise, state-of-the-art facilities, and cost-effective operations, allowing pharma companies to accelerate time-to-market, increase production capacity, and reduce operational costs. These benefits are encouraging pharmaceutical firms to opt for contract manufacturing.
• Furthermore, pharmaceutical companies are increasing their R&D expenditures. The level of R&D spending is a crucial indicator of a pharmaceutical company's commitment to drug discovery. Consequently, increased government investments in pharmaceutical R&D are expected to enhance research activities, improve the conversion of products into market-ready forms through pharmaceutical contract manufacturers, and drive the market's growth. For instance, according to the European Federation of Pharmaceutical Industries and Associations (EFPIA) and Pharmaceutical Research and Manufacturers of America (PhRMA), the pharmaceutical research and development spending annual growth rate in Europe registered a growth rate of 6.7% in 2019-2023 increased from 3.7% in 2014-2018.
• However, in Europe, the pharmaceutical industry's preference for maintaining control over manufacturing processes is limiting the market's growth. Despite the cost savings and operational efficiencies that outsourcing offers, companies are reluctant to give up control over critical production aspects. This hesitation is primarily due to concerns about intellectual property protection, quality standards, and supply chain reliability.
• Contract-based manufacturers in the United Kingdom encounter challenges due to the political implications of the United Kingdom's departure from the EU. UK/EU-based CMOs must adhere to rigorous testing protocols for various products under two regulatory frameworks. The government is promoting increased exports to diversify the UK economy away from its traditional reliance on financial services and credit-driven spending. As a result, pharmaceutical companies with limited production capacities may seek to outsource parts of their manufacturing operations, thereby increasing the demand for CMOs.
• The pandemic had a varied impact on the market studied, further driving its growth in the region. This was primarily due to the increased demand for vaccines, therapeutics, and personal protective equipment, which strained manufacturing capacities. As a result, contract manufacturers expanded production to meet the demand. However, supply chain disruptions, labor shortages, and regulatory challenges posed some obstacles.

Europe Pharmaceutical Contract Manufacturing Industry Segmentation

Pharmaceutical contract manufacturing involves outsourcing the production of pharmaceutical products to specialized third-party manufacturers and handles various stages of drug production, including APIs, synthesis, formulation development, and finished dosage form manufacturing.

The European pharmaceutical contract manufacturing market is segmented by service type (active pharmaceutical ingredient (API) manufacturing, finished dosage formulation (FDF) development and manufacturing (solid dose formulation, liquid dose formulation, and injectable dose formulation), and secondary packaging), and by country (United Kingdom, Germany, France, Italy, and Rest of Europe). 

The market sizes and forecasts are provided in terms of value (USD) for all the above segments.