Market Challenges And Opportunities

Global Biopharmaceutical CMO and CRO Market Drivers:

High demand for biologics/biosimilars to propel market growth

One of the key factors expected to augment the growth of the global biopharmaceutical CMO and CRO market over the forecast period is the increasing demand for biologics and biosimilars around the world. For instance, in February 2023, Enzene Biosciences, subsidiary of Alkem Laboratories begun commercial supplies of adalimumab biosimilar used for treating autoimmune disease such as rheumatoid arthritis and ankylosis spondylitis. Enzene Biosciences believes that the commercial launch using continuous manufacturing technology will help reduce a cost of rheumatoid arthritis treatment for millions of patients across India.

Growing trend of outsourcing to boost market growth

Another factor which is driving the growth of the global biopharmaceutical CMO and CRO market is the growing trend of outsourcing in the biopharmaceutical industry. For instance, in November 2021, Baxter International Inc. announced around US$ 100 million expansion of its sterile fill and finish manufacturing facility located in Halle or Halle Westfalen, Germany. The facility is operated by BioPharma Solutions (BPS), a business unit of Baxter that specializes in partnering with leading pharmaceutical and biotech companies on the development and contract manufacturing of drug products for parenteral (injectable) pharmaceuticals.

Global Biopharmaceutical CMO and CRO Market Opportunities:

Growing incidence of chronic diseases around the world is expected to provide significant growth opportunities for players in the biopharmaceutical CMO and CRO market. For instance, with the rise in burden of chronic diseases, the demand for safe and effective therapeutics is also increasing with a rapid pace. Which in turn propel the drug discovery and drug development process. In May 2023, Alkem Oncology announced the launch of Cetuxa, the world’s first biosimilar of Cetuximab used to treat head and neck cancer. Cetuxa has been researched and manufactured indigenously by Enzene Biosciences Limited, the biological arm of Alkem Laboratories.

Rapid growth of the biopharmaceutical industry is expected to offer lucrative growth opportunities for players in the biopharmaceutical CMO and CRO market. For instance, with the rapid growth of the biopharmaceutical industry, the trend of outsourcing is also increasing with the rapid pace. According to India Brand Equity Foundation (IBEF), Indian biotechnology industry is expected to reach around US$ 150 billion by 2025 and has the potential to reach around US$ 270-300 billion by the year 2030. Moreover, by 2025, the contribution of the Indian biotechnology industry to the global biotechnology market is expected to grow to 19%

Global Biopharmaceutical CMO and CRO Market Restraints:

Stringent rules and regulations to hamper market growth

One of the key factors expected to hamper growth of the global biopharmaceutical CMO and CRO market is the stringent rules and regulations or stringent regulatory framework. The Food and Drug Administration (FDA) defines and regulates contract research organizations (CROs), and may hold CRO directly responsible for any sponsor obligations it assumes under an investigational new drug application. The CRO needs to ensure that the drug trial is properly managed, and that it complies with the Good Clinical Practice and Harmonisation Guidelines.

However, to increase productivity and improve efficiency, reliance on the Contract Manufacturing Organizations (CMOs) and Clinical Research Organizations (CROs) continues to increase.

Rise in cost of raw materials to hinder market growth

Another factor hampering the growth of the global biopharmaceutical CMO and CRO market is the rise in cost of raw materials. According to the Indian Drug Manufacturers Association (IDMA), as of July 2021, the cost of raw materials for essential drugs, called APIs in the pharma sector, has seen a steep rise of around 140% since the pre-pandemic levels, posing a challenge for the industry. The overall increase, averaging around 50% owing to high-priced imports and supply disruptions from China, has raised concerns regarding the availability of drugs and could lead to shortages.