Global Healthcare CMO Market: Analysis By Type (Pharmaceutical and Medical Device), By Region (North America, Europe, Asia Pacific, ROW), Size and Trends with Impact of COVID-19 and Forecast up to 2029

Global Healthcare CMO Market: Analysis By Type (Pharmaceutical and Medical Device), By Region (North America, Europe, Asia Pacific, ROW), Size and Trends with Impact of COVID-19 and Forecast up to 2029 - Report Summary

Report Metrics	Details
Years Considered	2019-2023
Base Year	2023
Forecast Period	2024-2029
Page Count	144
Units Referenced	US $
Segments/Key Topics	By Type, By Service
Regions Covered	North America (The US, Canada, and Mexico), Europe (Germany, The UK, France, Italy, Spain, and Rest of Europe), Asia Pacific (China, Japan, India, South Korea, and Rest of Asia Pacific), ROWa
Key Companies Mentioned	Catalent Pharma Solutions, Inc., Samsung Biologics Co. Ltd., Aurobindo Pharma Limited, Boehringer Ingelheim GmbH, Integer Holdings Corporation, Piramal Enterprises Limited, Lonza Group AG, Thermo Fisher Scientific Inc., Recipharm AB, Fareva Group, Symbiosis Pharmaceutical Services, Curia, Cytovance Biologics

Five FAQs about the Report

What is the size of this market?
The global healthcare CMO market in 2023 was valued at US$145.83 billion.

What is the forecasted growth for this market?
The global healthcare CMO market is expected to reach US$291.25 billion by 2029. The market is projected to grow at a CAGR of 12.22% during the forecast period of 2024-2029.

What are key factors driving this market?
The healthcare CMO market flourished over the past years due to the increased demand for expertise in manufacturing and development of drugs and devices, patent expiration of major drugs, rising healthcare expenditure, and cost effective manufacturing of the pharmaceutical products. Small pharmaceutical companies opt for contract manufacturing in order to reduce their manufacturing and research & development cost.

How is this market segmented in this report?
In the report, the global healthcare CMO market is segmented on the basis of type (pharmaceutical and medical device). Pharmaceutical CMO segment is further divided into two segments on the basis of service: active pharmaceutical ingredients (API) and others.

What is the definition of this market in this report?
Contract manufacturing is one of the emerging trends in healthcare industry which involves outsourcing of manufacturing activities to a third party. Healthcare CMOs, or healthcare contract manufacturing organizations, are businesses that provide comprehensive services such as drug development and manufacturing for a set period of time under a legal contract. In the healthcare industry, a Contract Manufacturing Organization (CMO) provides services to pharmaceutical companies, hospitals, and others. Pre-formulation, formulation development, stability studies, method development, pre-clinical and Phase I clinical trial materials, and late-stage clinical trial materials are among the services offered.

What are the major influences driving the growth/decline of this market?
The global healthcare CMO market is expected to grow owing to escalating role of artificial intelligence technology, personalized medicine, sustainability and green manufacturing, advanced manufacturing technologies, expansion in cell and gene therapy, exploration of alternative expression systems, growing inclination towards herbal products, etc. However, some challenges are also impeding the growth of the market such as regulatory compliance, dependent on patents, copyrights, trademarks and trade secrets.Healthcare CMOs, or healthcare contract manufacturing organizations, are companies that provide comprehensive services such as drug development and manufacturing for a set period of time under a legal contract. The global healthcare CMO market was valued at US$145.83 billion in 2023, and is predicted to grow to US$291.25 billion in 2029.

The healthcare CMO market has experienced significant growth over the years primarily due to the increasing demand for pharmaceutical and biopharmaceutical products, spurred by the rising prevalence of chronic diseases and the aging global population. Also, the trend of pharmaceutical companies outsourcing manufacturing to CMOs to reduce costs and focus on core competencies has contributed significantly to market expansion. Advancements in manufacturing technologies and processes have also enabled CMOs to offer high-quality, scalable, and cost-effective production solutions. Other significant trends include escalating role of artificial intelligence technology, personalized medicine, sustainability and green manufacturing, advanced manufacturing technologies, expansion in cell and gene therapy etc. The global healthcare CMO market is determined to grow at a CAGR of 12.22% over the forecasted period of 2024-2029.

Market Segmentation Analysis:

By Type: The report identifies two segments on the basis of type: Pharmaceutical and Medical Device. The pharmaceuticals manufacturing segment acquired majority of share in the market in 2023 and is expected to grow at the fastest rate in the market during the forecast period, owing to increasing prevalence of chronic diseases and the rising global demand for complex drugs has driven pharmaceutical companies to outsource manufacturing to CMOs. Additionally, the surge in the development of complex biologics, personalized medicines, and specialty drugs necessitates advanced manufacturing capabilities, which many CMOs possess. Further, the ongoing advancements in pharmaceutical manufacturing technologies, coupled with the trend towards outsourcing, are expected to sustain and accelerate the growth of the pharmaceuticals manufacturing segment in the healthcare CMO market. Pharmaceutical CMO segment is further divided into two segments on the basis of service: Active Pharmaceutical Ingredients (API) and Others.

By Region: In the report, the global healthcare CMO market is divided into four regions: North America, Europe, Asia Pacific, and ROW. North America accounted for the maximum share of the global market in 2023. The market in North America is being driven by the region’s increased emphasis on drug discovery and manufacturing outsourcing. The region is increasing its use of scientific exploration of disease mechanisms leading to the discovery and development of agents. Pre-clinical testing is an important stage in pharmaceutical research. At this stage, several tests are performed to determine whether a drug is ready for clinical trials.

Asia Pacific is predicted to grow at a significantly high rate during the forecasted period because the region offers substantial cost advantages, including lower labor and operational costs, making it an attractive hub for manufacturing activities. Many countries in Asia Pacific, such as China and India, have invested heavily in developing their pharmaceutical and biotechnology infrastructure, providing state-of-the-art facilities and expertise. Secondly, the region has a large and growing population, increasing the demand for healthcare services and pharmaceutical products. This demographic shift is driving local and international pharmaceutical companies to expand their presence in Asia Pacific. Additionally, supportive government policies, including favorable regulations and incentives for foreign investment, have created a conducive environment for the growth of CMOs.

Market Dynamics:

Growth Drivers: One of the key drivers of the global healthcare CMO market's expansion is the increasing trend of pharmaceutical companies outsourcing their manufacturing processes. This strategic move allows pharmaceutical companies to reduce their operational costs significantly and focus more on their core competencies, such as research and development, marketing, and distribution. By partnering with CMOs, these companies can access advanced manufacturing technologies and expertise without the need for substantial capital investments in infrastructure. Outsourcing also provides flexibility in scaling production up or down based on demand, which is particularly beneficial in the rapidly evolving pharmaceutical market. This trend is bolstered by the growing complexity of drug manufacturing, especially with the rise of biologics and personalized medicines, which require specialized skills and equipment that many CMOs are equipped to provide. Other significant growth factors of the market include, surging geriatric population, rising healthcare expenditure, increasing spread of chronic diseases, escalating demand for generic drugs, and increasing demand for API.

Challenges: However, some challenges are impeding the growth of the market such as rapid technological advancement and dependent on patents, copyrights, trademarks and trade secrets. Industry players rely on a combination of know-how, trade secrets, patents, copyrights, trademarks, and other intellectual property laws, nondisclosure and other contractual provisions, and technical measures to protect many of company’s offerings and intangible assets. The company’s exclusive rights under certain of the offerings are protected by patents, some of which would expire in the near term. When patents covering an offering expire, loss of exclusivity may occur, which may force companies to compete with third parties, thereby negatively affecting the revenue and profitability and simultaneously hinders the growth of the industry.

Trends: The market is projected to grow at a fast pace during the forecast period, due to escalating role of artificial intelligence technology and evolution of advanced respiratory equipment. Healthcare artificial intelligence (AI) has transformed by assisting in repetitive tasks, designing treatment plans, medication management, and drug discovery. It can also be effectively used for healthcare data management by collecting, storing, and normalizing the data. Contract manufacturers are incorporating AI and other technological innovations to become more cost-effective and speed up production time. In addition, pharmaceutical CMOs are constantly developing AI technology in order to facilitate better risk detection and, in turn, improve the quality and safety of pharmaceutical products. The market is also projected to grow at a fast pace during the forecast period, due to various other latest trends such as personalized medicine, sustainability and green manufacturing, advanced manufacturing technologies, expansion in cell and gene therapy, exploration of alternative expression systems and growing inclination towards herbal products.

Impact Analysis of COVID-19 and Way Forward:

The COVID-19 pandemic had a positive demand shock, attributable to the increasing number of biopharmaceutical services provided to CMOs. CMOs invested in and acquired facilities in order to be ready for high-volume production units. This pandemic has proven to be an era of exponential growth in facility and bioprocessing units to have a higher output for increased and continuous supply.

Vaccine development and manufacturing activity in the healthcare CMO market has increased during pandemic, owing primarily to the industry's response to the COVID-19 pandemic. This expansion is expected to continue in the coming years as well. CMOs have made capacity and resource investments to address supply chain challenges. The CMO industry has seen an increase in modular construction and expansion, investments in cutting-edge technology, and process intensification strategies. Furthermore, many CMOs expanded their capabilities in new modalities such as [messenger RNA] mRNA and cell and gene therapy, which would drive the growth of the market during the post COVID period.

Competitive Landscape:

Global healthcare CMO market is fragmented. There is a wide array of CMOs ranging from large multinational corporations to small and mid-sized firms specializing in niche areas or regional markets.

The key players in the healthcare CMO market provides a detailed competitive landscape and focus on launching novel products with the necessary approvals. There is a continuing need for research and development, which is still a key strategy among market players.

The key players in the global healthcare CMO market are:

Catalent Pharma Solutions, Inc.
Samsung Biologics Co. Ltd.
Aurobindo Pharma Limited
Boehringer Ingelheim GmbH
Integer Holdings Corporation
Piramal Enterprises Limited
Lonza Group AG
Thermo Fisher Scientific Inc.
Recipharm AB
Fareva Group
Symbiosis Pharmaceutical Services
Curia
Cytovance Biologics

These major players have been implementing novel strategies to expand market prospects in the coming years. On July 11, 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 would 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.