Healthcare Contract Manufacturing Organization Market Size

Healthcare Contract Manufacturing Organization Market Analysis

The Healthcare Contract Manufacturing Organization Market size is estimated at USD 234.55 billion in 2024, and is expected to reach USD 381.40 billion by 2029, growing at a CAGR of 9% during the forecast period (2024-2029).

The major factors propelling the market's growth are the increasing trend of inclination of pharmaceutical and medical device manufacturers toward outsourcing, expiration of patents, increasing expansion of the services offering, and rising investment in R&D.

Medical device and pharmaceutical manufacturers are inclined toward contract manufacturing owing to several benefits offered by CMO companies, such as contract manufacturing, which allows companies to leverage the expertise and efficiency of specialized third-party manufacturers. This can lead to cost savings in labor, equipment, facilities, and materials. In addition, contract manufacturing allows companies to concentrate on their core strengths, such as research and development, regulatory compliance, and marketing, while leaving the production process to specialized partners. Thus, owing to the benefits offered by the CMO to the pharmaceutical and medical devices industry are expected to boost the healthcare CMO market during the forecast period.

Additionally, CMOs' increasing expansion of manufacturing services and facilities is expected to contribute to the market's growth during the forecast period. For instance, in June 2022, Jubilant Pharmova, a wholly-owned subsidiary of Jubilant Pharma Limited, announced that the Government of Quebec granted a loan of CAD 25 million (USD 18.22 million), which includes a forgivable portion of CAD 6.3 million (USD 4.56 million) to fund the CAD 100 million (USD 72.34 million) capacity expansion at the CMO Montreal facility. Similarly, in October 2022, multiple Evonik production sites were upgraded with advanced technologies, such as high-potency API (HPAPI), fermentation, mPEGs, and continuous processing. Thus, expanding these contract manufacturing services is likely to increase its adoption by the pharmaceutical and medical devices industry and is anticipated to boost the market's growth.

Moreover, market players' strategic activities are expected to boost the market's growth during the forecast period. For instance, in September 2023, Aspen Pharmacare Holdings Limited and its wholly-owned South African subsidiary, Aspen SA Operations (Pty) Ltd, agreed with Novo Nordisk AS for the technical transfer and commercial manufacture of human insulin.

Hence, the increasing trend of outsourcing, manufacturing facility expansion, and strategic activities are expected to boost the market during the forecast period. However, stringent regulatory guidelines, increasing lead time, and logistics costs are expected to restrain the market during the forecast period.