Contract Development and Manufacturing Organization (CDMO) Market Size, Share & Industry Analysis, By Service (CMO [API Manufacturing, Finished Product Manufacturing {Solid Dosage Forms, Injectables, and Others}, and Packaging] and CRO [Early Phase Development Services {Chemistry, Manufacturing and Controls (CMC), Preclinical Service, and Discovery}, Clinical {Phase 1, Phase 2, Phase 3, and Phase 4}, Laboratory Service, and Others]), and Regional Forecast, 2024-2032

The global Contract Development and Manufacturing Organization (CDMO) market size was valued at USD 224.86 billion in 2023. The market is projected to grow from USD 242.62 billion in 2024 to USD 465.14 billion by 2032, exhibiting a CAGR of 8.5% during the forecast period. North America dominated the contract development and manufacturing organization market with a market share of 38.7% in 2023.

Numerous CDMOs are currently offering services, including drug discovery, preclinical and clinical trials, API and finished product manufacturing, dosage form development, and others. These services encompass the entire process from drug discovery to commercialization. The increasing complexities in therapies and the lack of in-house manufacturing capabilities and manufacturing processes in small pharmaceutical companies are some of the factors that are expected to fuel the market growth throughout the forecast period.

• For instance, in March 2024, Alcami Corporation announced a partnership with Tanvex CDMO, a biologics developer offering preclinical to commercial biologic CDMO services. Through this partnership, both companies started offering their clients a complete solution, from bulk drug substance production to finished drug products.

Furthermore, the increasing funding from life science firms for the research and development of innovative treatments, coupled with government efforts to enhance the healthcare infrastructure and supply chain, are some of the additional factors contributing to the expansion of the market in the key regions.

• For example, in August 2023, the U.S. Department of Health and Human Services granted over USD 1.00 billion to four BARDA Clinical Trial partners to back vaccine Phase IIb clinical trial studies.

Due to the COVID-19 pandemic, the market for Contract Development and Manufacturing Organization (CDMO) experienced a slightly moderate positive growth in 2020 than the previous year. As a result of this pandemic, the progress of drug development was impeded in the first half of the fiscal year 2020. However, many biopharmaceutical and pharmaceutical industry players ramped up their research and production efforts in the latter part of 2020 to create and distribute testing kits, vaccines, and medications for the SARS-CoV-2 virus.

After the COVID-19 pandemic, there was significant growth in the CDMO services market. This was caused by the resumption of postponed early-phase development and clinical trial services and the increased awareness regarding the outsourcing of clinical trials and manufacturing, especially biologics. Such factors are expected to support the Contract Development and Manufacturing Organization (CDMO) industry growth.

Contract Development and Manufacturing Organization (CDMO) Market Trends

Growing Mergers and Acquisitions among CDMOs is Identified as Key Market Trend

Currently, the competitive landscape of the market for Contract Development and Manufacturing Organization (CDMO) is fragmented. Pharmaceutical companies are largely focusing on providing rapid innovations to improve the drug development and manufacturing process. Numerous contract development and manufacturing organizations are seeking to enhance their service offerings by merging with both small and large pharmaceutical companies, biotech firms, and many life science companies.

• In July 2021, ICON plc announced the acquisition of PRA Health Sciences. Both companies have kept the name ICON plc and transferred 38,000 employees to 47 countries, establishing the world's most advanced healthcare intelligence and clinical research organization.

Moreover, market players have also been focusing on initiatives for their geographical expansion in key regions.

• For example, in February 2024, Ergomed Group revealed that it is increasing its footprint in the U.S. by opening a new office at Kendall Square in Cambridge, Massachusetts. This growth strategy boosted customer service and increased presence in important biotech and pharma hubs throughout the U.S.

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Contract Development and Manufacturing Organization (CDMO) Market Growth Factors

Rising Demand for Pharmaceutical and Biopharmaceutical Products to Boost Market Growth

The number of chronic diseases is increasing globally due to population growth, Western lifestyle adoption, and economic development. Pharmaceutical companies are increasingly developing effective medical products to speed up treatment due to the increase in chronic diseases and the aging population.

• For example, as per the data provided by the World Health Organization (WHO) in September 2023, due to non-communicable diseases, around 41.0 million people are dying every year, which is equivalent to 74.0% of the deaths.

Moreover, the ability of CDMOs to provide one-stop-shop services in the manufacturing of biopharmaceutical products is one of the factors expected to contribute to global Contract Development and Manufacturing Organization (CDMO) market growth throughout the forecast period. The CDMO sector is experiencing significant growth due to the expanding therapeutic uses of pharmaceutical and biological drugs and a higher portion of pipeline molecules.

• As per the data published by the World Health Organization (WHO) in June 2024, the number of antibacterial drugs in the clinical pipeline increased from 80 in 2021 to 97 in 2023.

Furthermore, the growth of the Contract Development and Manufacturing Organization (CDMO) sector is expected to be boosted by the growing investments in infrastructure and the improved abilities of CDMOs to offer comprehensive services using innovative technologies.

Increasing Number of Clinical Trials Being Conducted Globally Have Been Fueling Demand for CRO Services

Healthcare companies have increased their focus on carrying out clinical trials to create advanced and efficient medical devices and treatments to meet the rising demand for effective diagnosis and treatment. The number of clinical trials conducted annually has been increasing substantially across the world.

• According to the data provided by the World Health Organization (WHO), approximately 42,227 clinical trials were conducted in 2015, which increased to 54,952 in 2022.

From the beginning of research to the final approval of the drug, the process of drug development is lengthy and expensive.

• For example, the data provided by Sofpromed in January 2024 stated that the average costs for phases 1, 2, and 3 are approximately USD 4.0 million, USD 13.0 million, and USD 20.0 million, respectively.

In addition, not all pipeline candidates need to be approved and commercialized; some are terminated or put on hold due to trial budgetary constraints and other challenges.

• For example, according to information released by the Congressional Budget Office in April 2021, just 12.0% of medications in clinical trials receive approval from the FDA.

To overcome these challenges, numerous small and mid-sized pharmaceutical firms have increased their emphasis on outsourcing their R&D tasks to CROs, as these partnerships assist in saving time and money for developing treatments or medical equipment. The market is experiencing significant growth due to the rise in clinical trials and outsourcing of clinical trial activities by healthcare companies.

RESTRAINING FACTORS

Stringent Regulatory Scenarios and Limited Funds for R&D May Restrict Market Growth

When establishing a research site, examiners must navigate the strict administrative, ethical, and regulatory requirements. These administrative protocols are crucial for ensuring the safety of the selected patients. In addition, if the time needed to get all the approvals is not considered in the planning phase, then delays in both recruitment procedures and initiation of clinical trials would occur.

• For instance, according to a research study released by the National Center for Biotechnology Information (NCBI) in 2021, one of the main causes of delays in starting clinical studies is delays in obtaining ethical, legal, and regulatory approval. Moreover, according to the same source, clinical studies also face challenges in meeting the desired sample size within the scheduled timeframe due to delays in regulatory approvals.

Moreover, disbelief toward medical research and lack of media attention can hinder the encouragement of patients to engage in such research endeavors. Another significant obstacle faced during clinical trials is ensuring adequate balance. Possible causes for inadequate funds may stem from mistakes made by the primary investigator when planning the budget for the clinical trials. Furthermore, additional reasons for a lack of funds may include starting the clinical trial with only a small amount of money and the principal investigator's struggle to secure additional funding while the trial is in progress. If the principal investigator cannot secure more funding, the study can be discontinued prematurely. The factors mentioned above limit the growth of the market for Contract Development and Manufacturing Organization (CDMO) by preventing new pharmaceutical and biotechnological companies from investing large amounts in research and development for new drug development.

Contract Development and Manufacturing Organization (CDMO) Market Segmentation Analysis

By Service Analysis

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Opening of New Facilities to Provide Advanced Manufacturing Services Led to CMO Segment’s Dominance in 2023

Based on service, the market is divided into Contract Manufacturing Organization (CMO) and Contract Research Organization (CRO). The Contract Manufacturing Organization (CMO) segment is further categorized into API manufacturing, finished product manufacturing, and packaging. Moreover, the finished product manufacturing segment is further divided into solid dosage forms, injectables, and others.

On the other hand, the CRO segment is divided into early phase development services, clinical, laboratory service, and others. The early phase development services segment is further categorized into Chemistry, Manufacturing and Controls (CMC), preclinical service, and discovery. Moreover, the clinical segment is sub-segmented into phase 1, phase 2, phase 3, and phase 4.

In terms of service, the CMO segment dominated the global Contract Development and Manufacturing Organization (CDMO) market share in 2023. The increasing number of contract manufacturing organizations involved in providing advanced manufacturing solutions is one of the main factors driving the CMO segmental growth.

The API manufacturing segment held the highest share in the CMO segment in 2023. The increasing number of biologics APIs in the pipeline stage, greater use of API biologics in various treatments, and establishment of new API manufacturing plants are some of the factors expected to drive segmental growth during the forecast period.  

• For instance, in July 2024, Eurofins CDMO Alphora Inc. announced the expansion of its API capacity and capabilities by opening a new API manufacturing facility in Mississauga, Canada.

Moreover, the finished product manufacturing segment accounted for the second-largest share in 2023 after API manufacturing. The injectables segment of the finished product manufacturing segment is projected to witness significant growth during the forecast period. This is due to the growing demand for injectables and the increased preference for injectable drug delivery systems, such as prefilled syringes and auto-injectors for the administration of biologics and biosimilars.

Furthermore, moderate growth is expected in the packaging segment throughout the forecast period. Many pharmaceutical contract manufacturing companies are prioritizing the implementation of patient-centric packaging innovations to enhance patient adherence through the inclusion of dose-monitoring features in packaging. Moreover, the rising collaborations between different CDMOs to offer creative packaging solutions are expected to drive growth in the packaging segment during the forecast period.

The growing emphasis of pharmaceutical, biotechnology, and medical device companies on research and development has been driving the need for CRO services in areas such as laboratory services and early-phase development, leading to the growth of the CRO segment.

Under the CRO segment, the early phase development services segment held a dominant market share in 2023 and is expected to grow at the highest CAGR during the forecast period. The presence of a larger number of CRO’s across the world providing preclinical research services is one of the factors driving market growth throughout the forecast period. Furthermore, the growth of the early phase development services segment is attributed to the increasing focus of CROs on providing novel technology-based services to improve research studies. 

• For example, in April 2024, Cureline, Inc. announced the launch of its new in-silico service that predicts molecule properties of the research moiety with higher accuracy and helps in providing greater precision in designing preclinical studies. In addition, this software based technology can help in discovering new preclinical leads at negligible costs.


• Jubilant Biosys Ltd. is one of the contract research organizations located in India involved in providing preclinical CRO services. In addition, Charles River Laboratories is the U.S.-based CRO involved in providing preclinical CRO services for assessing the safety of drug moiety via in-vivo and in-vitro testing.

The clinical segment is expected to grow at a moderate CAGR during the forecast period. The increase in demand for successful treatments and the growing number of products being developed are the reasons behind this trend. Furthermore, the growth of the clinical segment is attributed to the increasing focus of pharmaceutical, biotechnology, and medical device companies and research institutes on outsourcing their clinical trial activities.

• For instance, in December 2023, the Biomedical Advanced Research and Development Authority selected Thermo Fisher Scientific Inc. for conduction of the phase 2 clinical trial to treat acute respiratory distress syndrome.

Moreover, a rise in R&D investments and partnerships between top pharmaceutical companies to outsource clinical trials are expected to boost the need for clinical trial services, leading to further growth of the clinical segment.

REGIONAL INSIGHTS

Based on region, the market for Contract Development and Manufacturing Organization (CDMO) is studied across North America, Europe, Asia Pacific, and the rest of the world.

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North America held the largest market share in 2023 by generating a revenue of USD 87.03 billion. Throughout the forecast period, the region is anticipated to hold a leading position in the market. The growth of the market is mainly attributed to the presence of well-established CDMOs in this region. Along with this factor, increasing partnerships between pharmaceutical companies and CDMOs for providing a wide range of pharmaceutical products is an additional factor responsible for the dominant share of this region in the market.

Furthermore, the region's dominance is attributed to the rising investment in research and development activities by local companies and the growing number of registered clinical trials, particularly in the U.S.

• For example, as per the data obtained from clinicaltrials.gov, in January 2024, there were 477,346 clinical trials registered globally, with 30% (145,575) of these trials registered in the U.S.

On the other hand, Asia Pacific’s market for Contract Development and Manufacturing Organization (CDMO) is expected to capture the second-largest share during the forecast period. It experiences notable development because of the skilled workforce and the cost advantage for R&D and manufacturing present in the region. The regional market is also experiencing growth due to the rising presence of pharmaceutical and medical device startup companies, increasing clinical trial registrations, growing disease prevalence, escalating healthcare spending, and advancing healthcare infrastructure, among other factors.

• As per the World Health Organization (WHO), the number of clinical trials registered in Southeast Asia rose from 7,430 in 2019 to 11,030 in 2022.

Europe market for Contract Development and Manufacturing Organization (CDMO) held a moderate share in 2023 and is projected to grow at a moderate CAGR during the forecast period. Pharmaceutical companies are increasingly investing in R&D activities, and there is a growing demand for effective treatments for chronic diseases, which is contributing to the market growth in the region.

• For example, as per the data provided by the European Federation of Pharmaceutical Industries and Association (EFPIA) in 2021, pharmaceutical research and development spending in Europe increased by 52.3% compared to 2010, reaching 46,031.4 million.

Furthermore, the rest of the world captured a considerable share of the global market in 2023.

The markets in the rest of the world are currently in an early stage of development. However, improving healthcare facilities and regulatory frameworks in Brazil, Mexico, Peru, and South Africa are expected to drive the growth of the market in these regions in the coming years.

KEY INDUSTRY PLAYERS

Several CROs and CMOs are Taking Part in Development of Innovative Therapies to Treat Various Diseases

The CDMO market is highly fragmented. Companies including Lonza, IQVIA Inc., ICON plc, and Syneos Health accounted for a significant portion of the market share in 2023. These companies have a robust focus on R&D activities and their core competencies to introduce new solutions and upskill their services.

• For instance, in November 2021, IQVIA Inc. announced a data aggregation strategy as the foundation to optimize the market insights. It helped the company harness the right data and services to optimize the treatment procedures for patients. This increased the efficiency of the company’s services.

In addition, some of the prominent companies operating in the global market include Unither, Parexel International Corporation, Thermo Fisher Scientific Inc., and Vetter. These companies are concentrating on various strategic developments such as service expansion, partnerships, and collaborations.

List of Top Contract Development and Manufacturing Organization (CDMO) Companies:

• IQVIA (U.S.)


• ICON plc (Ireland)


• Syneos Health (U.S.)


• Vetter (Germany)


• Parexel International (MA) Corporation (U.S.)


• Recipharm AB (Sweden)


• Curia Global, Inc. (U.S.)


• Thermo Fisher Scientific Inc. (U.S.)


• Unither (France)


• DPT Laboratories, LTD. (U.S.)


• NextPharma Technologies (U.S.)


• Lonza (Switzerland)

KEY INDUSTRY DEVELOPMENTS

• February 2024 - Novo Holdings announced the acquisition of Catalent, Inc., a contract development manufacturing organization, at USD 16.5 billion.


• November 2023 - Syneos Health signed an agreement with P3 Research Ltd Network. The agreement helped the company expand its clinical trial capabilities in New Zealand (NZ) across varied therapeutic areas.


• May 2023 - Worldwide Clinical Trials collaborated with NEXT Oncology in Spain and Pratia Research through its Site Alliance Collaboration. This collaboration expanded the company’s presence outside the U.S.


• June 2022 - Parexel International (MA) Corporation launched the Community Alliance Network to integrate clinical research into the community healthcare setting. CVS Health and Javara joined this network.


• November 2021 - ICON plc revealed that its Accellacare Site Network had expanded its capabilities by forming new collaborations with six research sites in four different countries.

REPORT COVERAGE

The report provides an in-depth analysis of the industry. It offers the global market forecast in relation to the current market dynamics, the impact of COVID-19, and the latest market trends. In addition, the report consists of several factors that have contributed to the market’s growth. The report also provides the competitive landscape of the market.

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Report Scope & Segmentation