SMALL MOLECULE DRUG DISCOVERY MARKET ANALYSIS

Small Molecule Drug Discovery Market Size and Trends

Global small molecule drug discovery market is estimated to be valued at USD 56.10 Bn in 2024 and is expected to reach USD 100.01 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 8.6% from 2024 to 2031.

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Global small molecule drug discovery market growth is driven by increasing investment in research and development by pharmaceutical companies to develop small molecule drugs for treating various therapeutic applications. Growing prevalence of chronic diseases such as cancer and rising demand for small molecule drugs with better efficacy can drive the market growth. Development of advanced technologies to expedite the small molecule drug discovery process can offer lucrative opportunities in the near future. However, high costs associated with drug development and strict regulatory framework can hamper the market growth over the forecast period.

Market Driver - Growing pharmaceutical R&D expenditure

Global pharmaceutical industry has witnessed rising research and development expenditure over the past few years. Major pharmaceutical companies are investing heavily in drug discovery and development, in order to build robust pipelines of new molecular entities. There has been intense competition among leading pharma players to be the first to launch new drugs in high potential therapy areas. This boosts huge capital investment for setting up state-of-the-art R&D facilities, conducting clinical trials, and acquiring promising drug candidates from smaller biotech companies through mergers and acquisitions. Small molecule drugs still account for the majority of new drug approvals by regulatory agencies despite the rising popularity of biologics. Developing a new small molecule drug requires extensive experimentation, screening of chemical compounds, and optimization processes that are highly capital-intensive in nature. The continual need to replace blockbuster drugs that are going off-patent coupled with rising costs of drug development have forced pharma companies to focus on areas with higher commercial potential. This is evidenced by the growing dominance of specialty drug segments like oncology, neurology, and immunology in terms of R&D spending and pipeline candidates of major players. Developing drugs for complex therapeutic areas also necessitates newer paradigms like target identification, assay development, screening, molecular modeling, and analytics which are enabled by advancements in technologies. Small molecule approaches also  play an important role in these segments due to advantages over biologics in terms of cost of goods, stability, and delivery mechanisms.

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Increasing demand for generic drugs

The huge patient population suffering from chronic lifestyle disorders worldwide has put immense economic burden on healthcare systems of various countries. This factor, along with patent expiry of several blockbuster drugs, boosts demand for affordable generic versions. According to estimates, generics account for over 80% of total prescriptions filled in the U.S. currently. Major pharmaceutical markets like the U.S., key European nations, India, China are taking initiatives to promote generic drugs penetration through policies and investments. India has emerged as the global ‘pharmacy,’ owing to its large generics manufacturing capabilities and low cost of production. Meanwhile, companies in developed markets are also expanding generics portfolios and building affordable manufacturing capacities. The generic drug development process relies significantly on bioequivalence studies involving small molecule drugs to demonstrate therapeutic equivalence to reference listed drugs. Generic drugs offer up to 80% lower costs as compared to their branded counterparts. However, developing generic versions also pose technical challenges related to complex drug delivery mechanisms, multi-component formulations, and lack of readily available process information. This necessitates investments in enhancing reverse engineering capabilities, analytical techniques, and manufacturing infrastructure. Rising healthcare access and awareness about cost benefits of generics in emerging pharma hubs can stoke demand. Affordable small molecule generics also play a key role in easing treatment costs for a variety of chronic conditions globally.