HEALTHCARE CMO MARKET ANALYSIS

Market Concentration and Competitive Landscape

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Increase in demand for generics and biologics

Rising demand for generic and biosimilar drugs can drive the market growth. As patent cliffs of many blockbuster drugs concluded and patients looked for more affordable treatment options, generics offered a cost-effective solution. These contain the same active pharmaceutical ingredients as their brand-name counterparts but are often priced 80-85% lower than branded drugs. This has driven several pharmaceutical companies to turn to contract manufacturing organizations (CMOs) to help produce the increasing volumes of generics required to meet the growing needs. CMOs allow drug makers to focus on their core competencies of research and development while outsourcing production activities. This provides flexibility and capacity needed to scale up or down as market demand fluctuates for different generic products. According to the World Health Organization, as of 2020, over half the people globally do not have full access to essential health services. The pandemic further exacerbated this situation, stressing the importance of enhancing healthcare access. The development of biologics, including vaccines, to treat rare diseases has also increased in the past couple of years. However, high costs remain a significant barrier. The production of affordable biosimilars by CMOs can expand treatment to more patients. There has been rising need for generics and due to aging populations and growing prevalence of chronic diseases.