Global healthcare CMO market is estimated to be valued at USD 171.10 Bn in 2024 and is expected to reach USD 447.11 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 14.7% from 2024 to 2031.
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Growing expenditure on research and development and increasing outsourcing of clinical trial activities by pharmaceutical and biotechnology companies can boost demand for healthcare CMO services. Furthermore, growing generics market and emergence of biopharmaceuticals have prompted biopharma companies to rely on contract manufacturing organizations for their large-scale commercial manufacturing needs. However, pricing pressure faced by CMOs due to intensifying competition and regulatory challenges associated with manufacturing cell and gene therapies can hamper the market growth during the forecast period.
Market Driver: Rising Prevalence of Chronic Diseases
Rising prevalence of chronic diseases such as cancer, diabetes, cardiovascular diseases can drive the market growth. These diseases often require prolonged treatment therapies and complex medical procedures. According to WHO data, chronic diseases are responsible for over 70% of global deaths each year. The increasing number of patients dealing with complex chronic conditions has put substantial strain on healthcare systems worldwide. Pharmaceutical companies are facing escalating R&D costs for creating advanced therapies. To address this, they are outsourcing non-core functions such as clinical trials, manufacturing, and logistics to specialized Contract Manufacturing Organizations (CMOs). This strategy allows drug makers to concentrate on their core competencies, thereby driving up the demand for CMO services.
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.
Healthcare Cmo Market Report Snapshots
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