by The Healthcare CMO Market is estimated to be valued at US$ 326.8 Million in 2021 and is expected to exhibit a CAGR Of 16.1% over the forecast period 2021-2028, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Contract manufacturing organizations (CMOs) provides contract development and manufacturing services towards pharmaceutical and biotechnology companies on a contract basis. CMOs helps companies to outsource parts of its operations such as manufacturing, testing and packaging which reduce fixed operating costs. CMOs specializes in the production of sterile injectables, solid oral medications, biologics and cell and gene therapies.
Market Dynamics:
The healthcare CMO market is primarily driven by increasing drug discovery outsourcing and capacity expansion done by many pharmaceutical companies. As per assessment, drug development process can take up to 12 years at an average cost of $2.6 billion. Through CMO partnership, pharmaceutical companies can significantly reduce development cost and timelines. Further, CMOs are expanding production capacity through expansion of existing facilities or setting new manufacturing plants globally to meet growing demand from biopharma clients. For instance, in 2019, Thermo Fisher Scientific has expanded biologics manufacturing capacity at its site in Greenville, North Carolina. However, stringent regulatory requirements poses a challenge for CMOs to meet strict quality standards in production. Despite challenges, potential for biologics outsourcing and cell and gene therapy contract manufacturing offers huge growth opportunities for CMOs over the forecast period.
Segment Analysis
The global healthcare CMO market is dominated by the pharmaceutical CMO segment. This segment accounted for over 50% market share in 2021 owing to the high demand for outsourcing core activities pertaining to drug development and manufacturing. Factors such as cost efficiency, expertise in specialized manufacturing, and focus on core competencies of pharmaceutical companies have propelled the demand for pharmaceutical CMO services over the years.
PEST Analysis
Political: Government regulations pertaining to drug manufacturing and quality standards have increased compliance requirements for healthcare CMOs. Stringent regulatory approval processes also affect the timelines of outsourced drug development projects.
Economic: The growth of the biopharmaceutical industry and rising demand for generic drugs have fueled investments in healthcare CMO market. However, economic slowdowns can potentially delay outsourcing decisions of pharma companies.
Social: Rising incidence of chronic diseases and increasing access to medicines are driving the demand for pharmaceutical products globally. This has presented opportunities for healthcare CMOs to partner with drug developers and increase production capacities.
Technological: Advanced manufacturing technologies like continuous manufacturing, 3D printing, and prefilled syringes have helped CMOs improve efficiencies, flexibility and compliance with design to market timelines for life sciences clients.
Key Takeaways
The global Healthcare CMO Market size is expected to witness high growth, exhibiting CAGR of 16.1% over the forecast period, driven by rising generic and biologics drug production. The US dominated the North America healthcare CMO market in 2021 owing to presence of majority pharmaceutical companies actively outsourcing drug manufacturing activities. The Asia Pacific region is poised to be the fastest growing market during the forecast period due to rising investments by global pharmaceutical companies in China, India, and other emerging Asian countries to leverage low-cost skilled workforce for drug manufacturing and development. Key players operating in the healthcare CMO market are Boehringer Ingelheim GmbH, Catalent Pharma Solutions, Inc., DSM, Fareva, Greatbatch, Inc., Lonza Group, Patheon, Inc. Piramal Healthcare, Binex, Cytovance Biologics, Emergent BioSolutions Inc., MilliporeSigma, Symbiosis Pharmaceutical Services, Albany Molecular Research Inc., Samsung Biologics, and Symmetry Medical, Inc. Strategic partnerships and investments in expanding capacities of niche service offerings are some of the key strategies adopted by the major players.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
