Pharmaceutical CMO Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 173.13 Billion |
| Market Size (2029) | USD 237.56 Billion |
| CAGR (2024 - 2029) | 6.53 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Pharmaceutical CMO Market Analysis
The Pharmaceutical CMO Market size is estimated at USD 173.13 billion in 2024, and is expected to reach USD 237.56 billion by 2029, growing at a CAGR of 6.53% during the forecast period (2024-2029).
Advanced manufacturing technologies and processes are expected to contribute to the growth of the CMO market. CMOs can optimize their manufacturing processes and reduce waste and costs through new operational strategies, including continuous manufacturing. Small and mid-sized pharma companies, which account for an increasing share of new drug approvals and often lack manufacturing capacity, are expected to drive CMOs to adopt new manufacturing technologies.
- One of the main reasons for outsourcing pharmaceuticals is cost. Outsourcing gives companies access to specialized knowledge and tools at a fraction of the cost of maintaining internal capabilities, lowering operating costs and capital expenditures. Also, CMOs are expanding their capacity by purchasing manufacturing facilities from drug manufacturers, owing to the increasing demand.
- CMOs can scale up the expansion of their capabilities quickly through acquisitions. This shift in focus was accompanied by a change in the market's M&A landscape. For instance, developing novel therapeutic modalities (such as cell, gene, or mRNA therapies) and advanced vaccines over the past decade necessitated a sizable investment in new manufacturing facilities for nucleic acids, lipid-based formulations, viral vectors, and cell manipulation.
- For instance, FUJIFILM Diosynth Biotechnologies, a contract development and manufacturing organization for biologics and advanced therapies, recently held a ceremony to mark the beginning of its single-use manufacturing campus expansion project in Texas. The expansion will add a cGMP production facility that will be operational by 2024. The growth will double the Company's advanced therapy and vaccine manufacturing capacity in the United States.
- Additionally, pharmaceutical companies have been directing their priorities toward the core areas of competency. Hence, they prefer not to dispense available resources, expertise, and technology in formulating the final dose of medicines. The increased competition and shrinking profit margins compelled the pharmaceutical companies to revisit their production processes and R&D activities instead of manufacturing the formulated drug to stay competitive in the market.
- The growing geriatric population and increasing development and investment in the active pharmaceutical ingredients (APIs) market are propelling the growth of the biopharmaceutical industry. The prevalence of chronic diseases such as cardiovascular disease and cancer will also contribute to API growth. With the ongoing growth in the pharmaceutical sector, pharmaceutical innovator companies need to stock their pipelines with new drugs. However, they do not have the resources to discover, develop, and manufacture products. Hence, the requirement for CMOs is quite significant.
- Further, countries, such as China, India, and Japan, hold a significant share of the pharmaceutical CMO market, owing to low labor costs, low capital and overhead costs (compared to that of the United States and Europe), tax incentives, and undervalued currency combine that provides a significant cost advantage for pharmaceutical companies outsourcing to these countries.
- Investing in research and development (R&D) is becoming expensive, but the valuable outcomes are becoming less and less common. Many companies realize that outsourcing this part of their business while capitalizing on emerging pharmaceutical markets is the best way to reduce costs. Despite all the evidence of cost savings and the skills that can be gained, many companies don’t want to give up control. However, the situation is changing. The pressure to shorten supply chains and optimize lead time is forcing companies to take a variety of measures to meet demand, making contract manufacturing a bottleneck in their supply chain.
Pharmaceutical CMO Market Trends
Active Pharmaceutical Ingredient (API) and Intermediates are Expected to Witness Robust Demand
- The API manufacturing growth has consistently increased over the past few years. This will continue to rise steadily, with further patent expiries expected in the future and a significant increase in global generic production capacities. Most businesses in the sector emphasize creating biological APIs and boosting API production in the market under study. Compared to OTC medications, the general prescription pharmaceuticals subsegment has a higher need for API production.
- Increased government initiatives in the healthcare field, biologics innovation, and an increase in cancer and age-related disorders are just a few of the key reasons propelling the expansion of the API manufacturing market. However, the development of the business can be hampered by rigorous regulatory laws in places like Europe.
- The segment is expanding due to the rising importance placed on high-potency APIs. The cutting-edge technologies for HPAPIs can alter the in-out ratio of CMOs in this quickly growing market. Better prospects for CMOs are anticipated in the biopharmaceutical and small molecule API industries as the primary pharmaceutical firms continue to reduce their production.
- Companies are actively pursuing acquisition and expansion strategies to bolster API manufacturing, driving growth in the sector. For instance, in January 2023, an active pharmaceutical ingredient (API) production plant in Ringaskiddy, Ireland, was acquired by Sterling Pharma Solutions, a multinational contract development and manufacturing company from Novartis. Additionally, the deal includes an ongoing supply agreement with Novartis to continue to manufacture several APIs for cardiology, immunology, and oncology medications at Ringaskiddy. The facility will add capacity to Sterling's expanding API manufacturing capabilities. Financial information was kept private.
- The execution of a collaboration agreement for optimizing cell line productivity development to produce large volumes of anti-infective active pharmaceutical ingredients through precision fermentation was jointly announced by Willow Biosciences Inc. and SUANFARMA in October 2023. To develop a more cost-effective production process, SUANFARMA will have access to Willow's proprietary strain optimization technology through this partnership.
North America is expected to Hold a Significant Share in the Market
- Contract manufacturing organizations (CMOs) in the United States have evolved from an initial offering of essential manufacturing services to a wide range of services to meet market and outsourcer demand. Steady growth in the US pharmaceutical industry and increasing outsourcing by major pharmaceutical companies focusing on their core competencies to improve profit margins drive the country's market.
- Stricter domestic regulations ensure superior manufacturing quality and final products that CMOs adhere to. For instance, manufacturing an autologous or allogeneic therapy is complex, and the manufacturing facility must obtain its GMP certification.
- The country has emerged as one of the largest drug markets, accounting for almost half of the R&D spending in pharmaceutical and biotechnology markets. Hence, CMOs play a critical role in this market and have invested in new facilities and technologies to cater to various outsourcers. The country is experiencing a shortage in manufacturing capability for specific sectors, like cell, peptide, and gene therapy. CMOs have increased their manufacturing bases over the past two years.
- The Canadian pharmaceutical industry is one of the most innovative in terms of products. Pharmaceuticals, a key sector of the Canadian economy, is supported by the Canadian government, which provides a business-friendly environment for pharmaceutical companies and can leverage assets for short- and long-term business strategies.
- Canada holds the advantage of having a skilled workforce. Although Canada is going to face intense competition from emerging Asian countries, the complex manufacturing processes required for certain drugs, which need skilled personnel, a stable political environment, and the proximity to end markets, such as the United States, are expected to drive the growth of the pharmaceutical CMO market in this region.
- Further, the recent regulation of cutting prices for prescription drugs is likely to affect the CMOs in terms of their margins. This long-term effect is expected to hamper the productivity margins of CMOs in the country. Contract service providers (CSPs) in Canada are ideal replacements due to the complex manufacturing processes for certain products and the proximity to the end markets in Canada and the United States.
Pharmaceutical CMO Industry Overview
The market studied is highly fragmented, with major vendors accounting for most of the market share. The presence of many players in the market impacts the pricing of services, making it a direct competing factor, especially for small-scale vendors. The vendors in the market studied are expected to focus on providing one-stop-shop services, providing them with a competitive advantage. These practices would be possible for CMOs with access to large capital. This factor increases the competition and creates a new players' entry barrier. Some of the major players in the market are Patheon Inc. (Thermo Fisher Scientific Inc.), Lonza Group, Catalant Inc., Pfizer CentreOne (Pfizer Inc.), and Boehringer Ingelheim Group.
- February 2024: Catalent Inc. and Novo Holdings announced that they had entered into a merger contract under which Novo Holdings acquired Catalent for USD 16.5 billion in all-cash transactions. The acquisition of Catalent is aligned with Novo Holding's order to invest in high-quality life sciences companies to benefit the Novo Nordisk Foundation's mission and philanthropic causes.
- December 2023: Advanced and Emerging Therapeutic Business Unit of ReciBioPharm and biotechnology company Acuitases Therapeutics announced that they are expanding their strategic partnership and are prepared to conduct technology transfers as well as CGMP manufacturing for clients licensing Acuitas' LNP (Lipid nanoparticle) formulations for mRNA-based therapeutics and vaccines.
Pharmaceutical CMO Market Leaders
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Catalent Inc.
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Recipharm AB
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Jubilant Biosys Ltd.(Jubilant Pharmova Ltd)
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Patheon Inc. (Thermo Fisher Scientific Inc.)
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Boehringer Ingelheim Group
*Disclaimer: Major Players sorted in no particular order
Pharmaceutical CMO Market News
- January 2023: Catalent announced that it had signed a development and license agreement with Ethicann Pharmaceuticals Inc., a Canadian/American specialty pharmaceutical company specializing in creating high-value cannabinoid drug therapies using Zydisorally disintegrating tablet (ODT) technology to advance Ethicann's clinical drug pipeline. Per the agreement, Catalent would use its Zydis technology to develop pharmaceutical products containing cannabidiol (CBD) and tetrahydrocannabinol (THC) for Ethicann's use in clinical trials for various conditions.
- March 2023: Biose Industria, a renowned leader in Live Biotech Process Development and Production (LBP), announced the opening of its new facility in Boston, Massachusetts. After Biose Industries' phenomenal success in developing and producing LBP processes and manufacturing worldwide, Biose's new facility will further strengthen its relationship with the US market.
- July 2023: Recipharm Opens New Analytical Laboratory in Bangalore, India, to Increase Global Testing Capabilities for Nitrosamines, Extractables, Leachables, and Elemental Impurity Testing. 5,000 Sq Ft. Laboratory will support Recipharm's existing analytical capacity to support biotech and pharma customers in the Research and Development of Oral Solids, Drug Delivery, Inhalation, Vaccine, and Injectables with Full cGMP Compliance.
Pharmaceutical CMO Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
- 4.1 Market Overview
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4.2 Industry Attractiveness-Porter's Five Forces Analysis
- 4.2.1 Bargaining Power of Suppliers
- 4.2.2 Bargaining Power of Buyers
- 4.2.3 Threat of New Entrants
- 4.2.4 Intensity of Competitive Rivalry
- 4.2.5 Threat of Substitute Products
- 4.3 Industry Value Chain Analysis
- 4.4 Industry Policies
5. MARKET DYNAMICS
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5.1 Market Drivers
- 5.1.1 Increasing Outsourcing Volume by Pharmaceutical Companies
- 5.1.2 Increasing Investment in Research and Development
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5.2 Market Restraints
- 5.2.1 Increasing Lead Time and Logistics Costs
- 5.2.2 Stringent Regulatory Requirements
- 5.2.3 Capacity Utilization Issues Affecting the Profitability of CMOs
- 5.3 Analysis of Current Licensing and Business Models in the CMO Industry
- 5.4 Key Criteria Considered for Selection of CMO
6. MARKET SEGMENTATION
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6.1 By Service Type
- 6.1.1 Active Pharmaceutical Ingredient (API) Manufacturing
- 6.1.1.1 Small Molecule
- 6.1.1.2 Large Molecule
- 6.1.1.3 High Potency API (HPAPI)
- 6.1.2 Finished Dosage Formulation (FDF) Development and Manufacturing
- 6.1.2.1 Solid Dose Formulation
- 6.1.2.1.1 Tablets
- 6.1.2.1.2 Other Types (Capsules, Powders, etc.)
- 6.1.2.2 Liquid Dose Formulation
- 6.1.2.3 Injectable Dose Formulation
- 6.1.3 Secondary Packaging
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6.2 By Geography***
- 6.2.1 North America
- 6.2.1.1 United States
- 6.2.1.2 Canada
- 6.2.2 Europe
- 6.2.2.1 United Kingdom
- 6.2.2.2 Germany
- 6.2.2.3 France
- 6.2.2.4 Italy
- 6.2.2.5 Spain
- 6.2.3 Asia
- 6.2.3.1 China
- 6.2.3.2 India
- 6.2.3.3 Japan
- 6.2.3.4 Australia
- 6.2.4 Australia and New Zealand
- 6.2.5 Latin America
- 6.2.5.1 Brazil
- 6.2.5.2 Mexico
- 6.2.5.3 Argentina
- 6.2.6 Middle East and Africa
- 6.2.6.1 United Arab Emirates
- 6.2.6.2 Saudi Arabia
- 6.2.6.3 South Africa
7. COMPETITIVE LANDSCAPE
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7.1 Company Profiles*
- 7.1.1 Catalent Inc.
- 7.1.2 Recipharm AB
- 7.1.3 Jubilant Biosys Ltd (Jubilant Pharmova Ltd)
- 7.1.4 Patheon Inc. (Thermo Fisher Scientific Inc.)
- 7.1.5 Boehringer Ingelheim Group
- 7.1.6 Pfizer CentreSource (Pfizer Inc.)
- 7.1.7 Aenova Holdings GmbH
- 7.1.8 Famar SA
- 7.1.9 Baxter Biopharma Solutions (Baxter International Inc.)
- 7.1.10 Lonza Group
- 7.1.11 Tesa Labtec GmbH (Tesa SE)
- 7.1.12 Tapemark
- 7.1.13 ARX LLC
8. ANALYSIS OF MAJOR CMOS WHO ARE EQUIPPED TO MANUFACTURE SCHEDULED DRUGS
9. INVESTMENT ANALYSIS
10. FUTURE OUTLOOK OF THE MARKET
** Subject To AvailablityPharmaceutical CMO Industry Segmentation
The study tracks and analyzes the demand for outsourcing CMO activities within the pharmaceutical industry based on current trends and market dynamics. The market numbers are derived by tracking the revenue generated by the players operating in the market who are providing CMO services. The study provides a detailed breakdown of the various types of service types. This report analyzes the factors based on the prevalent base scenarios, key themes, and end-user vertical-related demand cycles.
The pharmaceutical CMO market is segmented by service type (active pharmaceutical ingredient (API) manufacturing (small molecule, large molecule, and high potency API (HPAPI)), finished dosage formulation (FDF) development and manufacturing (solid dose formulation (tablets and others), liquid dose formulation, and injectable dose formulation), and secondary packaging) and geography (North America (United States and Canada), Europe (United Kingdom, Germany, France, Italy, Spain, and Rest of Europe), Asia Pacific (China, India, Japan, Australia, and Rest of Asia-Pacific), Latin America (Brazil, Mexico, Argentina, and Rest of Latin America), Middle East and Africa (United Arab Emirates, Saudi Arabia, South Africa, and Rest of Middle East and Africa)). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.
| By Service Type | Active Pharmaceutical Ingredient (API) Manufacturing | Small Molecule | |
| Large Molecule | |||
| High Potency API (HPAPI) | |||
| By Service Type | Finished Dosage Formulation (FDF) Development and Manufacturing | Solid Dose Formulation | Tablets |
| Other Types (Capsules, Powders, etc.) | |||
| By Service Type | Finished Dosage Formulation (FDF) Development and Manufacturing | Liquid Dose Formulation | |
| Injectable Dose Formulation | |||
| By Service Type | Secondary Packaging | ||
| By Geography*** | North America | United States | |
| Canada | |||
| By Geography*** | Europe | United Kingdom | |
| Germany | |||
| France | |||
| Italy | |||
| Spain | |||
| By Geography*** | Asia | China | |
| India | |||
| Japan | |||
| Australia | |||
| By Geography*** | Australia and New Zealand | ||
| Latin America | Brazil | ||
| Mexico | |||
| Argentina | |||
| Middle East and Africa | United Arab Emirates | ||
| Saudi Arabia | |||
| South Africa |
Pharmaceutical CMO Market Research FAQs
How big is the Pharmaceutical CMO Market?
The Pharmaceutical CMO Market size is expected to reach USD 173.13 billion in 2024 and grow at a CAGR of 6.53% to reach USD 237.56 billion by 2029.
What is the current Pharmaceutical CMO Market size?
In 2024, the Pharmaceutical CMO Market size is expected to reach USD 173.13 billion.
Who are the key players in Pharmaceutical CMO Market?
Catalent Inc., Recipharm AB, Jubilant Biosys Ltd.(Jubilant Pharmova Ltd), Patheon Inc. (Thermo Fisher Scientific Inc.) and Boehringer Ingelheim Group are the major companies operating in the Pharmaceutical CMO Market.
Which is the fastest growing region in Pharmaceutical CMO Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Pharmaceutical CMO Market?
In 2024, the North America accounts for the largest market share in Pharmaceutical CMO Market.
What years does this Pharmaceutical CMO Market cover, and what was the market size in 2023?
In 2023, the Pharmaceutical CMO Market size was estimated at USD 161.82 billion. The report covers the Pharmaceutical CMO Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Pharmaceutical CMO Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Pharmaceutical CMO Industry Report
Statistics for the 2024 Pharmaceutical CMO market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Pharmaceutical CMO analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
