Pharmaceutical CDMO Market Size, Growth, Report 2024-2033

Pharmaceutical CDMO Market Size and Growth 2024 to 2033

The global pharmaceutical CDMO market size was valued at USD 169.87 billion in 2024 and is expected to be worth around USD 314.94 billion by 2033. It is growing at a compound annual growth rate (CAGR) of 7.10% from 2024 to 2033.

The pharmaceutical CDMO market is expanding rapidly due to increasing outsourcing trends in the pharmaceutical and biotech sectors. Companies are turning to CDMOs to reduce production costs, shorten drug development timelines, and access advanced technologies. The rise in demand for biologics, gene therapies, and personalized medicines has created a significant need for specialized manufacturing capabilities, which CDMOs are well-equipped to provide. Additionally, as regulatory requirements grow more stringent, pharmaceutical companies rely on CDMOs for their expertise in compliance and quality assurance. Emerging markets, particularly in Asia-Pacific, are playing a crucial role in the market's expansion due to lower labor costs, growing manufacturing infrastructure, and government support for the pharmaceutical sector. In 2022, pharmaceutical products were the world's 7th most traded product, with a total trade value of USD 835 billion, representing 3.52% of total world trade. The CDMO industry also benefits from a surge in demand for innovative therapies and increased funding for research and development globally. 

A Pharmaceutical CDMO (Contract Development and Manufacturing Organization) is a company that provides outsourced services for drug development and manufacturing to pharmaceutical and biotechnology companies. These organizations handle tasks such as formulating drugs, conducting clinical trials, scaling up production, and ensuring compliance with regulatory standards. By outsourcing to CDMOs, pharmaceutical companies can focus on innovation and market strategies while leveraging the expertise and infrastructure of CDMOs to reduce costs, time, and risks in drug development and manufacturing. CDMOs offer end-to-end solutions, from preclinical research to commercial production, making them essential partners in the pharmaceutical supply chain.

• “In a recent interview with In Vivo Editor-in-chief Lucie Ellis-Taitt, CEO Benedikt von Braunmühl discussed the CDMO landscape, global economic trends, AI's role, and growth plans in the USA. Despite challenges, the CDMO market is projected to grow by 7% annually, reaching $223.5 billion by 2030.”
• ” Lonza has appointed a new CEO from a rival as it prepares to leverage its $1.2 billion acquisition of Roche’s Genentech facility in Vacaville, California. The deal includes a $550 million investment for site upgrades and a continued drug supply contract with Roche.”

Report Highlights

• Asia-Pacific has accounted highest revenue share of 38% in 2023.
• North America has held revenue share of 24% in 2023.
• By workflow, the commercial segment has generated revenue share of 58% in 2023.

Pharmaceutical CDMO Market Growth Factors

• Rising Drug Development Costs: Increasing costs associated with drug development are driving pharmaceutical companies to outsource manufacturing and development tasks to CDMOs, allowing them to manage expenses more effectively.
• Growth in Biologics and Biosimilars: The expanding market for biologics and biosimilars has led to a higher demand for specialized manufacturing capabilities, boosting the need for CDMOs with expertise in these complex products.
• Advancements in Technology: Innovations in manufacturing technologies, such as continuous manufacturing and advanced analytics, are enhancing the efficiency and quality of drug production, fostering growth in the CDMO sector.
• Increasing Demand for Outsourcing: Pharmaceutical companies are increasingly outsourcing their development and manufacturing processes to CDMOs to focus on their core competencies and reduce operational risks.
• Regulatory Compliance Needs: The complex regulatory landscape requires CDMOs to provide specialized services that ensure compliance with stringent industry standards, driving demand for their expertise and capabilities.

Pharmaceutical CDMO Market Trends

• Aging Population and Chronic Diseases: The growing elderly population and increasing prevalence of chronic diseases drive the need for more pharmaceuticals and treatments, boosting demand for CDMO services to scale production and meet market needs.
• Emergence of Personalized Medicine: The rise of personalized medicine and targeted therapies requires specialized manufacturing processes that CDMOs are well-equipped to handle, propelling their growth in the market.
• Globalization of Pharmaceutical Supply Chains: As pharmaceutical companies expand their global reach, they rely on CDMOs to manage complex, international supply chains and ensure consistent product quality across different markets.
• Expansion into Emerging Markets: CDMOs have opportunities to grow by entering emerging markets, where there is increasing demand for pharmaceutical products and a rising need for local manufacturing capabilities.
• Development of Advanced Therapeutics: The growing field of advanced therapeutics, including gene therapies and cell-based treatments, presents new opportunities for CDMOs to offer specialized services and technologies for these cutting-edge drug products.

Report Scope

Pharmaceutical CDMO Market Dynamics

Drivers

Increased Focus on R&D and Innovation:

• Pharmaceutical companies are significantly investing in R&D to discover innovative drugs and therapies. CDMOs support these efforts by providing critical expertise, infrastructure, and advanced technologies for drug development, from preclinical to clinical phases, thus accelerating time-to-market and enhancing the quality of new therapies.

Contractual Flexibility and Scalability:

• CDMOs offer flexible and scalable manufacturing solutions, allowing pharmaceutical companies to adjust production volumes based on demand fluctuations without substantial capital investment. This flexibility helps companies manage production costs effectively and respond swiftly to market changes or regulatory requirements.

Restraints

Regulatory Compliance and Quality Control:

• Navigating the complex and stringent regulatory requirements across different regions poses a significant challenge. Ensuring compliance with varying standards and maintaining consistent quality control can be resource-intensive and may lead to delays or increased costs for CDMOs.

Intellectual Property Risks:

• The management of intellectual property (IP) is a major concern in the pharmaceutical CDMO market. Protecting proprietary formulations and processes while collaborating with multiple pharmaceutical companies can be challenging, as IP disputes or breaches could potentially undermine competitive advantages and lead to legal conflicts.

Opportunities

Expansion into Emerging Markets:

• There is significant growth potential for CDMOs in emerging markets due to increasing pharmaceutical production and demand in these regions. By establishing operations or partnerships in emerging markets, CDMOs can tap into new revenue streams and cater to the growing pharmaceutical needs of these regions.

Advancements in Biotechnology:

• The rise of biotechnology and biopharmaceuticals presents new opportunities for CDMOs. By investing in capabilities to handle complex biologics, cell and gene therapies, and other advanced therapeutics, CDMOs can position themselves as key players in the rapidly expanding biotech sector, attracting new clients and projects.

Challenges

Integration of Advanced Technologies 

• Adopting and integrating advanced technologies such as automation, artificial intelligence, and advanced analytics into existing manufacturing processes can be challenging. CDMOs must continually invest in and upgrade their technological capabilities to stay competitive and meet evolving client needs.

Talent Acquisition and Retention: 

• The pharmaceutical CDMO sector faces challenges in attracting and retaining skilled professionals with specialized expertise in drug development and manufacturing. High turnover rates and the competitive job market for talent in this field can impact operational efficiency and innovation capabilities.

Pharmaceutical CDMO Market Segmental Analysis

The pharmaceutical CDMO market is segmented into service, product, indication, end users, and region. Based on service, the market is classified into development services, manufacturing services, packaging services, and testing services. Based on product, the market is classified into small molecules, and biologics. Based on indication, the market is classified into cancer, cardiovascular disease, diabetes, pain, respiratory disease, and others. Based on end users, the market is classified into pharmaceutical companies, biotechnology companies, generic drug manufacturers, and nutraceutical companies.

Service Analysis

Development Services: Development services in the Pharmaceutical CDMO market encompass preclinical and clinical development, formulation, analytical development, and regulatory affairs. These services support drug discovery, optimization, and regulatory compliance. There's a rising trend in personalized medicine and biologics, driving demand for advanced development services. Increasing complexity in drug formulations and regulatory requirements is leading to greater reliance on CDMOs for specialized expertise and accelerated development timelines.

Manufacturing Services: Manufacturing services include API production, finished dosage form manufacturing, packaging, and labeling. These services cover the entire production process, from synthesizing active ingredients to producing the final product. The shift towards biologics and complex molecules is expanding the scope of manufacturing services. There is also an emphasis on automation and scaling up production to meet increasing global demand, while ensuring high quality and compliance.

Packaging Services: Packaging services involve primary and secondary packaging and serialization of pharmaceutical products. These services ensure product protection, compliance with regulations, and facilitate distribution. Growing focus on patient safety and anti-counterfeiting measures is driving advancements in packaging technologies. Serialization and smart packaging are becoming more prevalent, improving traceability and security throughout the supply chain.

Testing Services: Testing services include stability, quality control, and microbiological testing. These services ensure the safety, efficacy, and quality of pharmaceutical products through rigorous testing procedures. There is an increasing demand for comprehensive testing services due to stricter regulatory standards and the need for high-quality assurance. Innovations in analytical techniques and the growth of biologics are driving advancements in testing methodologies and capacities.

Product Analysis

Small Molecules: Small molecules are low molecular weight compounds, typically less than 900 Daltons, used in pharmaceutical drugs. They are synthesized chemically and can penetrate cells easily to exert their therapeutic effects. The market for small molecules in CDMO is growing due to increased demand for generic drugs and new small-molecule drugs. Advances in synthetic chemistry and continuous manufacturing are improving efficiency and reducing costs.

Biologics: Biologics are large, complex molecules or mixtures of molecules derived from living organisms. They include products like monoclonal antibodies, vaccines, and cell and gene therapies. The biologics sector is rapidly expanding, driven by advancements in biotechnology and personalized medicine. CDMOs are investing in advanced facilities and technologies to handle the complex production processes of biologics, including cell culture and fermentation. Increased focus on precision medicine and immunotherapies is further boosting growth in this segment.

Indication Analysis

Cancer: Cancer treatments often involve complex drugs, including biologics and small molecules. CDMOs provide development and manufacturing services for oncology drugs, ensuring high quality and compliance with regulatory standards. Increasing investment in cancer research has driven demand for specialized CDMO services. There's a growing emphasis on personalized medicine and advanced therapies like CAR-T cells, necessitating sophisticated manufacturing capabilities.

Cardiovascular Disease: CDMOs support the development of drugs and biologics for cardiovascular diseases, including hypertension, heart failure, and atherosclerosis. These services cover the entire spectrum from preclinical to commercial production. There is a rising focus on novel therapies for cardiovascular diseases. Advanced drug delivery systems and biologics are gaining traction, leading to increased demand for CDMO expertise in these areas.

Diabetes: The management of diabetes involves insulin and other drug formulations. CDMOs offer services to develop, manufacture, and package these critical diabetes treatments. The demand for diabetes treatments is growing due to rising prevalence. Innovations like insulin pumps and continuous glucose monitors are driving the need for advanced manufacturing solutions and new drug formulations.

Pain: CDMOs provide services for developing and manufacturing analgesics and other pain management therapies. This includes both over-the-counter and prescription medications. There is a shift towards developing non-opioid pain management solutions due to the opioid crisis. CDMOs are focusing on novel drug delivery systems and biologics to meet this evolving need.

Respiratory Disease: For respiratory diseases like asthma and chronic obstructive pulmonary disease (COPD), CDMOs develop and manufacture inhaled therapies and biologics. The rise in respiratory conditions and demand for innovative inhalers and biologics are boosting the CDMO market. Advances in targeted therapies and personalized medicine are further driving growth in this sector.

Others: This category includes CDMO services for a variety of other conditions, such as neurological disorders, autoimmune diseases, and infectious diseases. The expansion into rare and niche diseases is increasing. CDMOs are adapting to the growing need for specialized treatments and orphan drugs, with a focus on tailored solutions and advanced technologies.

End Users Analysis

Pharmaceutical Companies: Pharmaceutical companies, leveraging CDMO services, focus on outsourcing drug development and manufacturing to reduce costs and expedite time-to-market. Trends include increased demand for specialized services, like advanced formulation and high-potency API manufacturing, driven by the need for complex drug development and regulatory compliance.

Biotechnology Companies: Biotechnology companies utilize CDMOs for their expertise in biologics and complex therapeutic products. Trends show a rising need for CDMOs with capabilities in biologics production, including monoclonal antibodies and cell therapies, as biotech firms focus on innovative treatments and personalized medicine.

Generic Drug Manufacturers: Generic drug manufacturers turn to CDMOs for cost-effective and scalable production solutions. Trends include a shift towards outsourcing to manage production costs and meet stringent regulatory requirements, while also focusing on speed to market for generic drugs amidst increasing competition.

Nutraceutical Companies: Nutraceutical companies collaborate with CDMOs to develop and manufacture dietary supplements and functional foods. Trends indicate a growing demand for high-quality, scientifically validated products and advanced packaging solutions, driven by consumer health awareness and regulatory scrutiny.

Others: This category encompasses various end users such as medical device companies and contract research organizations (CROs). Trends involve increased outsourcing to CDMOs for specialized manufacturing and development needs, reflecting a broader adoption of contract services across the healthcare and wellness sectors.

Pharmaceutical CDMO Market Regional Analysis

Why is Asia-Pacific leading the pharmaceutical CDMO market?

The Asia-Pacific pharmaceutical CDMO market size woth at USD 64.55 billion in 2024 and is expected to reach around USD 119.68 billion by 2033. The Asia-Pacific region is leading, due to its expanding pharmaceutical and biotechnology industries. Trends include a surge in outsourcing activities driven by cost advantages, increasing investments in state-of-the-art facilities, and rising demand for high-quality production services to cater to both local and global markets.

Why is North America expanding rapid growth in Pharmaceutical CDMO market?

The North America pharmaceutical CDMO market size accounted for USD 40.77 billion in 2024 and is projected to hit around USD 75.59 billion by 2033. In North America is driven by a high concentration of pharmaceutical and biotech companies, leading to strong demand for contract manufacturing services. Trends include a growing emphasis on advanced manufacturing technologies and regulatory compliance, as well as increasing partnerships and mergers among CDMOs to expand capabilities and geographical reach.

Europe hold second highest position in market

The Europe pharmaceutical CDMO market size is estimated at USD 52.66 billion in 2024 and is anticipated to surpass around USD 97.63 billion by 2033. The Europe market is characterized by a focus on innovation and regulatory adherence, with a significant demand for CDMOs specializing in biologics and complex generics. Trends include increased investment in cutting-edge manufacturing technologies and a rise in cross-border collaborations due to stringent European regulatory standards and diverse pharmaceutical needs.

LAMEA is in growing phase

The LAMEA pharmaceutical CDMO market size is calculated at USD 11.89 billion in 2024 and is projected to reach around USD 22.05 billion by 2033. The LAMEA market is growing due to rising healthcare infrastructure and pharmaceutical production capacities. Trends include increased outsourcing by local pharmaceutical companies seeking cost efficiencies, a focus on expanding capabilities in emerging markets, and collaborations aimed at meeting the region's diverse regulatory requirements and market needs.

Pharmaceutical CDMO Market Top Companies

• Lonza Group AG
• Catalent, Inc.
• Recipharm AB
• Alcami Corporation
• Samsung Biologics Co., Ltd.
• WuXi AppTec, Inc.
• Fujifilm Diosynth Biotechnologies
• Boehringer Ingelheim GmbH
• Pfizer CentreOne
• Charles River Laboratories International, Inc.
• Evonik Industries AG
• Siegfried Holding AG
• Cobra Biologics
• Aenova Group
• NantPharma

Recent entrants like Aenova Group and Cobra Biologics have adopted advanced technologies such as continuous manufacturing and cell and gene therapy to differentiate themselves in the pharmaceutical CDMO market. They are investing in state-of-the-art facilities and specialized services to cater to evolving client needs. Lonza Group AG and Catalent, Inc. are market leaders due to their extensive global presence and comprehensive service offerings. Lonza excels in biologics and small molecules, while Catalent's expertise spans across clinical and commercial supply, driving their market dominance.

Recent Developments

The pharmaceutical CDMO market has seen several key developments in recent years, with companies seeking to expand their market presence and leverage synergies to improve their offerings and profitability. Some notable examples of key development in the market include:

• In 2024, Recipharm has signed an exclusive licensing and collaboration agreement with Medspray and Resyca. The partnership focuses on developing soft mist nasal delivery devices for both single and combination pharmaceutical products, enhancing delivery options in the market.
• In 2024, Parexel and the Japanese Foundation for Cancer Research have formed a strategic alliance to expedite access to oncology clinical trials in Japan. This collaboration aims to enhance the availability and efficiency of cancer research and treatment options in the region.
• In 2023, The Bridgewest Group, a global private investment firm specializing in life sciences and CDMO, launched NovaCina, a new sterile injectables CDMO. NovaCina is focused on advancing products to full-scale commercial production, enhancing their market presence.
• In 2023, Vector Biomed secured $15 million in funding to enter the CDMO sector as a startup. The investment will enable the company to address the growing need for manufacturers specializing in gene and cell therapies, expanding its market reach.
• In 2022, Medipost has launched a new CDMO business for cell and gene therapy products in Korea. This initiative aims to provide a one-stop solution for the development of pharmaceuticals and biopharmaceuticals, enhancing service offerings in the region.

This key development helped companies expand their offerings, improve their market presence, and capitalize on growth opportunities in the pharmaceutical CDMO Market. The trend is expected to continue as companies seek to gain a competitive edge in the market.

Market Segmentation

By Services

• Development Services
  
  • Preclinical Development
  • Clinical Development
  • Formulation Development
  • Analytical Development
  • Regulatory Affairs
• Manufacturing Services
  
  • API (Active Pharmaceutical Ingredient) Manufacturing
  • Finished Dosage Form (FDF) Manufacturing
  • Packaging
  • Labeling
• Packaging Services
  
  • Primary Packaging
  • Secondary Packaging
  • Serialization
• Testing Services
  
  • Stability Testing
  • Quality Control Testing
  • Microbiological Testing

By Product

• Small Molecules
• Biologics
  
  • Monoclonal Antibodies
  • Vaccines
  • Gene Therapies
  • Cell Therapies

By Indication

• Cancer
• Cardiovascular Disease
• Diabetes
• Pain
• Respiratory Disease
• Infectious Diseases
• Neurological Disorders
• Metabolic Disorders
• Autoimmune Diseases
• Ophthalmology
• Gastrointestinal Disorders
• Hormonal Disorders
• Hematological Disorders
• Others

By Workflow

• Commercial
• Clinical

By End User

• Pharmaceutical Companies
• Biotechnology Companies
• Generic Drug Manufacturers
• Nutraceutical Companies
• Others

By Regions

• North America
• APAC
• Europe
• LAMEA