Global healthcare CMO market is estimated to witness high growth, owing to increasing demand for outsourcing and growing generic market
Global Healthcare CMO Market is estimated to be valued at USD 171.10 Bn in 2024, exhibiting a CAGR of 14.7% over the forecast period of 2024-2031. The market growth is driven by rising demand for outsourcing drug development and manufacturing activities from small pharmaceutical and biotech companies. Furthermore, growing generic drugs market can also drive growth of contract manufacturing organizations.
Market Dynamics:
Increasing demand for outsourcing: Pharmaceutical and biotechnology companies are increasingly outsourcing research and development activities such as clinical trials, preclinical and basic research, and drug development to contract manufacturing organizations, in order to reduce development costs and focus on their core competencies. This drives the global healthcare CMO market growth.
Growing generic drugs market: The patent expiry of many blockbuster drugs and growing demand for low-cost generics drugs globally has stimulated pharmaceutical companies to outsource generic drug production to CMOs. This has boosted demand for healthcare CMOs with capabilities to manufacture generics.
Growing Demand for Generic Drugs Can Drive Growth of Healthcare CMO Market
The patent expiration of many blockbuster drugs and rising healthcare costs has boosted demand for lower-cost generic drugs globally. Contract manufacturing organizations (CMOs) allow pharmaceutical companies to outsource their generic drug production to focus on R&D and their core therapies. CMOs offer cost-effective generic drug manufacturing services to meet the increasing demand. Their specialized manufacturing facilities and regulatory expertise help generic drug makers to launch products quickly without significant capital investments. This has boosted outsourcing of generics production to CMOs.
Need for Flexible and Specialized Manufacturing Drives Healthcare CMO Industry
Pharma companies increasingly prefer using CMOs' flexible manufacturing facilities rather than investing in specialized production equipment themselves. CMOs offer a wide range of specialized manufacturing capabilities from clinical trial material production to manufacturing of complex biologics. These also provide multi-product lines to respond faster to changing market needs. These advantages help drug makers access technologies and facilities on demand without long-term commitments. The flexible and specialized manufacturing services of CMOs have boosted outsourcing and can drive the healthcare CMO market growth.
Stringent Regulatory Requirements Pose Significant Challenge
Healthcare CMO industry operates in a highly regulated environment. CMOs need to adhere to good manufacturing practices and gain regulatory approvals to manufacture products for different markets. Complying with the regulatory standards of global healthcare authorities like the FDA and EMA increases operational complexities and costs for CMOs. Unexpected regulatory delays or inspection failures can impact project timelines. The stringent regulations subject CMOs to risks of penalties, import bans, and approval withdrawals if not followed properly. This hampers outsourcing decisions and market growth.
Dependence on Few Large Pharma Companies Increases Business Risks
The top CMOs often depend on a small number of large pharmaceutical clients for a major share of their revenues. Loss of key customer can significantly impact a CMO's financials. Moreover, consolidation in the pharma industry leads to loss of contracts as the merged entities shift manufacturing in-house or to their preferred partners. CMOs also face pricing pressures from large customers trying to reduce costs. This business risk gives pause to potential pharma partners and limits outsourcing.
Growing Biologics Market Offers Lucrative Opportunities
The biologics industry is one of the fastest-growing pharmaceutical sectors, driven by pipeline expansion and patent expiries of major biologic drugs. CMOs with capabilities to manufacture complex biologics find huge outsourcing opportunities in this space. These help small biotech firms and virtual pharmaceutical companies access specialized cGMP manufacturing facilities and approvals without major capital expenditure.
Emerging Markets Promote Growth through Higher Demand
Emerging countries across Asia Pacific, Latin America, Middle East, and Africa are witnessing increased healthcare spending and generics uptake. Their growing populations and improving standards of living boosts demand for pharmaceutical. However, these markets have limited manufacturing capabilities. CMOs see opportunities to tap the emerging markets through partnerships, tech transfers and manufacturing agreements. This helps address unmet local needs while opening up a new revenue stream. The rising demand from emerging economies can drive the global healthcare CMO industry.
Link - https://www.coherentmarketinsights.com/market-insight/healthcare-cmo-market-4622
Key Development
- In July 2023, Recipharm opened a new analytical laboratory in Bangalore, India, that is designed to expand its global testing capabilities. The 5,000-square-foot laboratory will enhance Recipharm's analytical services, including testing for nitrosamines, extractables, leachables, and elemental impurities. This facility will support the company's biotech and pharmaceutical clients in the research and development of oral solids, drug delivery systems, inhalation products, vaccines, and injectables, all while maintaining full cGMP compliance.
- In March 2023, BioseIndustria, a leading name in Live Biotech Process Development and Production (LBP), announced the inauguration of its new facility in Boston, Massachusetts. This new facility will further enhance Biose's established success in LBP process development and manufacturing, reinforcing its presence and operations within the US market.
- In January 2023, Catalent announced a development and license agreement with Ethicann Pharmaceuticals Inc., a specialty pharmaceutical company based in Canada and the U.S. Ethicann focuses on high-value cannabinoid drug therapies and will leverage Catalent's Zydis orally disintegrating tablet (ODT) technology to advance its clinical drug pipeline. Under the agreement, Catalent will use its Zydis technology to create pharmaceutical products containing cannabidiol (CBD) and tetrahydrocannabinol (THC) for use in Ethicann’s clinical trials targeting various conditions.
- In June 2022, Glenmark Pharmaceuticals launched a pioneering fixed-dose combination (FDC) medication, Indacaterol + Mometasone, for patients with uncontrolled asthma in India. Marketed under the brand name Indamet, Glenmark is the first company in India to commercialize this innovative FDC. The combination features Indacaterol, a long-acting beta-agonist, and Mometasone Furoate, an inhaled corticosteroid, and has been approved by the Drug Controller General of India (DCGI).
Key Players: Lonza Group, Catalent, Inc., Thermo Fisher Scientific (Patheon), Recipharm AB, Siegfried Holding AG, Aenova Group, Almac Group, Piramal Pharma Solutions, Evonik Industries AG, Famar Health Care Services, Boehringer Ingelheim, Consort Medical plc, Pfizer CentreOne, Baxter BioPharma Solutions, Jubilant HollisterStier, Vetter Pharma International GmbH, Ajinomoto Bio-Pharma Services, Fareva Group
