Pharmaceutical Contract Packaging Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

Pharmaceutical Contract Packaging Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Pharmaceutical Contract Packaging Market size is estimated at USD 18.15 billion in 2024, and is expected to reach USD 29.03 billion by 2029, at a CAGR of 9.84% during the forecast period (2024-2029).

The pharmaceutical industry is growing exponentially, driven by global economic growth, an aging population, and new product launches. The increasing sales of pharmaceuticals are driving the logistics and warehousing requirements as vendors in the market are constantly expanding their facilities. With the understanding that pharmaceutical companies can boost their profits by outsourcing the packaging of their products, there has been a noticeable rise in the use of pharmaceutical contractors for commercial and clinical packaging.

Continued Endeavors to Implement Serialization to Support Market Expansion

Key Highlights

• The pharmaceutical packaging market's key factors are growth in self-medication and multi-drug protocols, safety and compliance, product and patient engagement, and serialization. Packaging that helps and engages patients via ease of managing doses and drug compliance is among the foremost trends.
• Technological and innovative packaging is critical to protecting the integrity of the supply chain and ensuring that consumers have access to safe and reliable medicines and medical devices. Serialization and tracking capabilities not only help brands fight off counterfeit goods but can also be used to generate more value by creating new channels for revenue generation. Because these approaches are essential in the fight to protect patients from counterfeit medicines, the printing and packaging industry must stay ahead of illicit manufacturers and prevent potentially dangerous counterfeits from falling into the hands of unsuspecting patients.

Competition from In-house Packaging Key Verticals to Restrict the Market Growth

Key Highlights

• Contract packaging can be time-consuming, as products are transported several times between manufacturers and packagers, thus increasing the potential for damage. In the case of a liquid product, the percentage will be higher since damage to one bottle can destroy multiple units.​ Many companies may choose to handle packaging in-house because it can be more cost-effective for them. By doing so, they can have more control over the entire packaging process, including material sourcing, design, and production, potentially reducing costs compared to outsourcing to a contract packaging provider.​
• Factors such as unwillingness to share information with contract packagers, availability of in-house machinery, and high switching costs encourage in-house packaging and act as a restraining factor for contract packagers.​

In the pharmaceutical contract packaging market, microeconomic factors like surging input costs, escalating labor expenses, and mounting pressures from regulatory compliance are driving up business costs. Concurrently, there's a rising demand for intricate and tailored packaging solutions spurred by technological advancements and a wave of competitive consolidations. These dynamics present lucrative opportunities for firms adept at innovation and efficient scaling. Companies that navigate these challenges through strategic tech investments, forging partnerships, and emphasizing sustainability are poised to excel in this fiercely competitive landscape.

Pharmaceutical Contract Packaging Market Trends

The Primary Segment to Register Significant Growth

• The primary packaging of pharmaceuticals in bottles entails filling the bottles. The bottle-filling services hold a significant market share in the studied market as multiple pharmaceutical companies depend on contract packaging companies to partake in the filling procedure.
• The ease of outsourcing bottling services allows pharmaceutical companies to focus on the research and development of drug discovery and getting it certified and approved by regulatory authorities like the Food and Drug Administration (FDA). Furthermore, companies can detach themselves from their primary packaging responsibilities. The cost and the time-saving shift of responsibility of filling pharmaceutical bottles drive the growth in demand for the studied segment.
• Over the forecast period, plastic bottle filling is expected to grow significantly due to its various advantages, including its lightweight, which further saves space, transportation, and freight charges. Unlike pharmaceuticals filled in glass bottles, plastic bottles are not prone to breakage and help with the necessary cost savings associated with glass bottles.
• Vial packaging of pharmaceuticals is one of the critical packaging processes as vials are usually made of glass, and quartz which can be brittle and further lead to breakage and huge losses during filling, packaging, and transportation.
• The demand for contract packaging for vials significantly increased, owing to th increasing complexity in the supply chain of drug development. The COVID-19 pandemic has played a vital role in increasing vial production due to the drastically large need for vaccines.
• Over the forecast period, vials made out of borosilicate glass are expected to hold a significant market share owing to the rising complexity of diseases like diabetes that require self-injecting pharmaceuticals. According to the International Diabetes Federation, the global adult population of Around 10.5 percent suffer from diabetes in 2021, and by the year 2045, this ratio is expected to rise to over 12 percent. Vials are increasingly used for storing single-shot medicines and the market is expected to grow.

North America Holds Largest Market Share

• In North America, the pharmaceutical contract packaging market is swiftly adopting diverse packaging methods. This shift is largely driven by evolving consumer preferences and heightened environmental concerns, leading to a surge in demand for sustainable packaging solutions within the industry.
• Moreover, the growing integration of automation in pharmaceutical contract packaging has significantly reduced the risks associated with human errors, further fueling the market's expansion in the region. Additionally, rising disposable incomes coupled with heightened health awareness among consumers are boosting the demand for contract packaging services.
• To meet the surging demand for packaging solutions, the market is seeing a flurry of acquisitions and partnerships. For example, in October 2024, GenNx360 Capital Partners (GenNx360) proudly announced Nutra-Med's acquisition of Legacy Pharma Solutions. Nutra-Med, a proud member of GenNx360's portfolio, specializes in contract packaging services catering to the pharmaceutical, Over-the-Counter (OTC), medical device, and dietary supplement sectors.
• By leveraging contract packaging, pharmaceutical companies can sharpen their focus on core competencies. This shift, coupled with rising R&D expenditures in the pharmaceutical realm, is poised to propel the global pharmaceutical contract market's growth. Data from the Pharmaceutical Research and Manufacturers of America (PhRMA) highlights a consistent uptick in R&D spending across the pharmaceutical sector since 2015. Moreover, the urgency brought on by the COVID-19 pandemic has further amplified research endeavors in the industry.
• North America, a hub for major pharmaceutical players and packaging solution providers, is witnessing a surge in demand. Given the escalating packaging requirements from pharmaceutical firms, the market is set for growth during the forecasted period.

Pharmaceutical Contract Packaging Industry Segmentation

The pharmaceutical contract packaging market remains highly fragmented, with many players competing for contracts from leading pharmaceutical companies. In response to intensifying competition, larger firms increasingly turn to mergers and acquisitions to broaden their capabilities and extend their geographic reach. The imperative primarily fuels this trend toward consolidation to provide integrated services and scale operations for enhanced competitiveness.

Market players engage in continuous product development, breakthrough innovations, and strategic acquisitions and partnerships to target high-growth or emerging use cases. Key players in the global pharmaceutical contract packaging market include Sharp, Nelipak BV, Almac Group, AmeriPac, Sepha Ltd., and Wasdell Group. These companies are channeling investments into innovation, automation, and sustainability to ensure they stay competitive and adept at addressing the growing complexities of pharmaceutical packaging demands.

Advancements in biopharmaceuticals, regulatory compliance needs, and outsourcing trends drive the global pharmaceutical contract packaging market toward sustained growth. To remain competitive and address the pharmaceutical industry's evolving demands, key market players are prioritizing innovation, especially in areas like serialization, sustainability, and automation.

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