June 20, 2024
Contract Pharmaceutical Manufacturing Market

Contract Pharmaceutical Manufacturing is Expected to be Flourished by Growing Demand for Generic Drugs

Contract pharmaceutical manufacturing refers to the outsourcing of pharmaceutical production to third-party contract manufacturing organizations. Companies engage contract manufacturing organizations to gain economies of scale, manage capacities, focus on core competencies, and reduce capital expenditures. Key services provided by contract manufacturing organizations include active pharmaceutical ingredients production, solid dosage manufacturing such as tablets and capsules, liquid formulation production, and packaging and labeling. The global contract pharmaceutical manufacturing market is gaining traction with the increasing demand for generic drugs worldwide. Generic drugs are marketed at significantly lower prices than branded drugs and offer similar therapeutic efficacy. As patents of several blockbuster drugs expire globally, generic manufacturers are expected to gain opportunities to market bioequivalent generic drugs. This transition from branded to generic drugs is anticipated to boost the demand for contract pharmaceutical manufacturing services.

The global contract pharmaceutical manufacturing market is estimated to be valued at US$ 101.45 Mn in 2023 and is expected to exhibit a CAGR of 7.7% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:
The global contract pharmaceutical manufacturing market is flourishing, as signified by the market opportunity highlighted in the heading – growing demand for generic drugs. Generic drugs market is growing substantially owing to patent expiries of many blockbuster drugs. This provides immense opportunities for generic drug manufacturers to produce cheaper alternatives through contract manufacturing organizations. Additionally, rising focus on core competencies by pharmaceutical companies is another key driver favoring outsourcing of manufacturing activities. Outsourcing non-core activities to contract manufacturers helps pharmaceutical companies optimize resources and focus on drug development and marketing. The cost advantages arising from economies of scale achieved by large contract manufacturers compared to in-house manufacturing is boosting adoption. Further, contract manufacturers help mitigate regulatory risks and ensure compliance with manufacturing regulations such as cGMP.

Segment Analysis
The contract pharmaceutical manufacturing market is segmented by type, product type and geography. The type segment is further divided into active pharmaceutical ingredients (APIs) and finished dosage formulations (FDFs). APIs segment dominates the market and accounts for around 60% share due to growing demand for generic and low-cost drugs.

PEST Analysis
Political: The government regulations regarding drug manufacturing and approvals have increased in recent years, especially in developed countries. This has made the approval process lengthy and compliance requirement stringent.

Economic: The contract pharmaceutical manufacturing market is growing at a steady pace due to rising healthcare spending, increasing demand for generic drugs and shortage of in-house manufacturing capabilities of big pharmaceutical companies.

Social: With growing aging population and increasing lifestyle diseases, the demand for drugs has gone up globally. This has boosted the contract drug manufacturing business.

Technological: Advanced technologies like continuous manufacturing, 3D printing are being adopted to enhance efficiency and reduce costs. Automation is also being used to minimize human errors in production.

Key Takeaways
The Global Contract Pharmaceutical Manufacturing Market Size is expected to witness high growth in the forecast period due to rising outsourcing of manufacturing activities by large pharmaceutical firms. North America dominates with over 40% share due to presence of many pharmaceutical companies and CMOs in the region.

Regional Analysis: Europe is the second largest regional market for contract drug manufacturing due to stringent regulations and growing generic drug industry in the region. Countries like Germany, UK, and Switzerland are the major markets.

Key players operating in the contract pharmaceutical manufacturing market are Accenture plc, Belden Inc., Cisco Systems, Inc., Claroty Ltd., Cyberbit, Darktrace, Deloitte Touche Tohmatsu Limited, Bayshore Networks, Hitachi Systems Security Inc., Fortinet, Inc., OTORIO Ltd., IBM Corporation, Dragos, Inc., Indegy, IOActive Inc., Kaspersky Lab, Leidos, Thales Group, TÃœV SÃœD, Wurldtech Security Technologies Inc., Honeywell International Inc. (NextNine Ltd.), Nozomi Networks Inc., and NCC Group. Accenture and Belden captured significant market share due to their diverse service portfolio and global presence.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it