According to latest report, the global active pharmaceutical ingredient CDMO market size was estimated at USD 119.80 billion in 2023 and is projected to hit around USD 249.22 billion by 2033, growing at a CAGR of 7.6% during the forecast period from 2024 to 2033. Asia Pacific had dominated in the market with the largest revenue share of 38.11% in 2023.
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The Active Pharmaceutical Ingredient (API) Contract Development and Manufacturing Organization (CDMO) market refers to the sector of the pharmaceutical industry where companies outsource the development and manufacturing of APIs to specialized third-party organizations. CDMOs provide a range of services, including drug development, process optimization, and large-scale production of APIs, allowing pharmaceutical companies to focus on core activities such as R&D and marketing.
The rising global demand for pharmaceuticals, driven by an aging population, increasing prevalence of chronic diseases, and growing access to healthcare, is a significant growth driver for the API CDMO market. The growing complexity of APIs, including biologics and highly potent APIs, necessitates advanced capabilities and technologies that many pharmaceutical companies lack in-house, boosting demand for CDMO services. Continuous advancements in API development and manufacturing technologies, such as continuous manufacturing and process analytical technology (PAT), are enhancing the capabilities of CDMOs and driving market growth.
Active Pharmaceutical Ingredient CDMO Market Key Takeaways
- Asia Pacific dominated the overall Active Pharmaceutical Ingredient CDMO market with a revenue share of 38.11% in 2023.
- The U.S. accounted for a dominant revenue share in the API CDMO market in North America in 2023.
- The traditional active pharmaceutical ingredient segment held the largest share of 39.85% in 2023.
- The antibody-drug conjugate segment is expected to show lucrative growth during the forecast period.
- The synthetic segment dominated the API CDMO market and accounted for the largest revenue share of 73.19% in 2023.
- The biotech segment is estimated to register a faster CAGR over the forecast period.
- The innovative drugs segment dominated the API CDMO market and accounted for the largest revenue share of 73.63% in 2023.
- The generic segment has been anticipated to showcase lucrative growth over the forecast period.
- The oncology segment dominated the active pharmaceutical ingredient CDMO market and accounted for the largest revenue share of 35.72% in 2023.
- The glaucoma segment has been anticipated to experience lucrative growth over the forecast period.
- The commercial segment held a dominant market share of 90% in 2023.
- The clinical segment has been anticipated to showcase lucrative growth over the forecast period.
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Asia Pacific Active Pharmaceutical Ingredient CDMO Market Size and Trends 2024 to 2033
The Asia Pacific active pharmaceutical ingredient CDMO market size was USD 45.66 billion in 2023, calculated at USD 50.71 billion in 2024 and is expected to reach around USD xx billion by 2033, expanding at a CAGR of 7.5% from 2024 to 2033.
Asia Pacific dominated the overall Active Pharmaceutical Ingredient CDMO market with a revenue share of 38.11% in 2023. The regional market is anticipated to be driven by factors such as an enhanced regulatory framework, substantial opportunities for cost savings, heightened complexity, and robust drug pipelines. Additionally, the availability of a skilled workforce at a lower cost compared to developed economies, such as the U.S., is expected to further propel market expansion.
Countries such as India and China are the largest manufacturers of APIs globally, primarily due to the high pharmaceutical R&D investment and well-established CDMOs across Asian countries. Furthermore, India is anticipated to witness the fastest CAGR during the analysis timeframe in this region, with the COVID-19 pandemic highlighting the importance of strengthening the supply chain of pharmaceuticals. The Indian government is taking several initiatives to eliminate its dependencies on China for APIs by augmenting production facilities and investing in R&D activities to bolster domestic production of APIs. These aforementioned factors are responsible for this regional dominance.
China accounted for the largest revenue share in the Active Pharmaceutical Ingredient (API) CDMO market in Asia Pacific region in 2023. The country offers a robust infrastructure, cost advantages, and a skilled workforce, making it an attractive destination for pharmaceutical manufacturing. Additionally, China's vast chemical and pharmaceutical manufacturing capabilities, coupled with its ability to produce a wide range of APIs, have positioned it as a key player in the regional and global API market.
North America is expected to hold a substantial market share due to the presence of several established biotechnology and pharmaceutical companies. Rising R&D investments made by life sciences and pharmaceutical companies are anticipated to fuel the demand for API contract manufacturing in this region. Stringent regulations governing manufacturing and product quality are likely to create growth opportunities for domestic contract manufacturing services. The rising regulatory emphasis on quality control in manufacturing stands as another crucial factor expected to propel market growth during the forecast period.
The U.S. accounted for a dominant revenue share in the API CDMO market in North America in 2023. The U.S. pharmaceutical industry is characterized by significant research and development activities, a robust regulatory framework, and a high concentration of major pharmaceutical companies. This environment fosters a strong demand for outsourced API development and manufacturing services, driving the growth of the API CDMO market.
Market Dynamics
Driver
Cost Efficiency and Focus on Core Competencies
Outsourcing API production to CDMOs allows pharmaceutical companies to achieve significant cost efficiencies. Developing and maintaining in-house capabilities for API production requires substantial investments in infrastructure, technology, and skilled personnel. By partnering with CDMOs, pharmaceutical companies can avoid these high costs and instead leverage the CDMOs' specialized expertise and economies of scale. This enables pharmaceutical companies to allocate more resources towards their core competencies, such as drug discovery, clinical development, and marketing, ultimately leading to faster innovation and improved competitiveness in the market.
Restraint
Supply Chain Vulnerabilities
The reliance on external CDMOs for API production introduces potential supply chain vulnerabilities. Disruptions in the supply chain, such as delays in raw material supply, geopolitical tensions, or operational issues at the CDMO facilities, can significantly impact the timely availability of APIs. This can lead to production delays, increased costs, and potential shortages of essential drugs in the market. Additionally, managing and coordinating activities with external partners requires robust supply chain management and quality assurance practices, which can be challenging and resource-intensive for pharmaceutical companies.
Opportunity
Expansion in Emerging Markets
Emerging markets, particularly in Asia-Pacific and Latin America, present significant growth opportunities for the API CDMO market. These regions are witnessing increasing pharmaceutical production due to the growing demand for affordable medicines, favorable government policies, and improving healthcare infrastructure. CDMOs that establish or expand their presence in these markets can benefit from the rising demand for API development and manufacturing services. Additionally, partnerships with local pharmaceutical companies in emerging markets can enhance market penetration and provide access to a broader customer base, further driving growth opportunities for CDMOs.
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Active Pharmaceutical Ingredient CDMO Market Segments Insights
By Product Insights
The traditional active pharmaceutical ingredient segment held the largest share of 39.85% in 2023.The market is further anticipated to experience significant growth throughout the forecast period. This growth is attributed to factors such as increased pharmaceutical Research and Development (R&D) activities, a rise in chronic disease occurrence, the growing adoption of generics, and a rising preference for biopharmaceuticals. Moreover, increasing adoption of advanced therapeutics, development of personalized medicines, and the introduction of innovative and novel delivery systems are expected to contribute to market growth.
The growing trend among major pharmaceutical companies to outsource, particularly in the realm of traditional Active Pharmaceutical Ingredient (API) Contract Development and Manufacturing Organizations (CDMO), is poised to drive industry demand. Additionally, rising investments in Research and Development (R&D) that are focused on refining API production processes are anticipated to propel advancement of this market segment.
The antibody-drug conjugate segment is expected to show lucrative growth during the forecast period. The effectiveness of antibody-drug conjugates (ADC) and checkpoint inhibitors in combating cancer is profoundly influencing the research and development landscape of ADCs. Moreover, there is a notable surge in exploring novel and compelling applications of antibody-drug conjugates. The ADC biopharmaceutical sector is witnessing a substantial uptick in R&D efforts, focusing on both combination therapies for cancer treatment and extending the application of ADCs beyond oncology to address various non-cancerous diseases.
By Synthesis Insights
The synthetic segment dominated the API CDMO market and accounted for the largest revenue share of 73.19% in 2023.This is attributed to the heightened accessibility of raw materials and the ease of synthesizing these molecules. The expected expiration of patents for various synthetic molecules in the coming years is poised to stimulate growth in this industry. Moreover, the use of synthetic APIs empowers developers to swiftly create and prototype applications, eliminating the need to wait for the actual APIs to be developed or become available. This expedites the development process, facilitating a faster time-to-market for new products and services.
The biotech segment is estimated to register a faster CAGR over the forecast period.This growth is being propelled by factors such as increased demand for biopharmaceuticals and enhanced molecular efficiency. Moreover, the advancement of this segment can be attributed to substantial investments in the biotechnology and biopharmaceutical industries. While biotech active pharmaceutical ingredients currently represent a limited share of the overall active pharmaceutical ingredient market, the sector is poised for a positive outlook. This stems from the rapid expansion of the biopharmaceutical industry and growing utilization of biotech drugs.
By Drug Insights
The innovative drugs segment dominated the API CDMO market and accounted for the largest revenue share of 73.63% in 2023. Segment growth is propelled by factors such as a rise in FDA approvals for new molecular entities, the elevated cost of innovative active pharmaceutical ingredients compared to generic pharmaceuticals, and a heightened emphasis on research and development. An extensive research in this field has led to a pipeline containing numerous unique molecules, anticipated to be launched during the forecast period. The high share of this segment is majorly due to a growing pace of new drug approvals in recent years. For instance, as per U.S. FDA, around 46 novel drugs were approved as of 2023.
The generic segment has been anticipated to showcase lucrative growth over the forecast period. The expansion of the generic pharmaceutical sector is primarily attributed to the patent expiration of branded drugs and cost-effectiveness associated with generics. The growing number of patents set to expire, with approximately 190 drugs expected to lose exclusivity by 2033 according to the U.S. FDA, presents a substantial market opportunity for this segment. Among these, 69 are considered blockbuster drugs, contributing to the anticipated growth in this segment.
By Application Insights
The oncology segment dominated the active pharmaceutical ingredient CDMO market and accounted for the largest revenue share of 35.72% in 2023.The market is growing due to the rising number of cancer cases globally. Thus, a rising demand for new cancer therapies is anticipated to be the outcome of this steady increase in incidence rates. The growing presence of novel drugs in cancer is expected to create further opportunities for this segment. For instance, as per the U.S. FDA, as of 2023, the global oncology pipeline includes 16 oral medications and 6 injectable drugs, with 6 drugs dedicated to breast cancer and 3 aimed at addressing non-small cell lung cancer (NSCLC).
The glaucoma segment has been anticipated to experience lucrative growth over the forecast period. This is largely attributed to the rising prevalence of diabetes, the growing elderly population, and an increase in healthcare spending globally. According to the WHO, glaucoma is the world's second-largest cause of blindness. Thus, a rapidly growing need for lowering the disease burden of glaucoma is likely to support market growth of this segment in the near future.
By Workflow Insights
The commercial segment held a dominant market share of 90% in 2023. The rising global disease burden supports segment growth, boosting demand for active pharmaceutical ingredients. For instance, an article published by the Europa Group states that, as of September 2023, cardiovascular disease (CVD) continues to remain the primary cause of death in both men and women. Approximately 620 million individuals worldwide are affected by heart and circulatory conditions.
Every year, approximately 60 million people globally are diagnosed with heart or circulatory diseases. Thus, the increasing prevalence of chronic diseases and mortality rates is driving the global demand for CDMO operations in the production of Active Pharmaceutical Ingredients (APIs). Furthermore, key market players are focusing on expanding their presence by improving their API manufacturing capabilities. For instance, in June 2022, Merck & Co., Inc. announced a capacity expansion at its High Potency Active Pharmaceutical Ingredient production facility in Wisconsin, the U.S., to enhance its ability to produce cancer medication.
The clinical segment has been anticipated to showcase lucrative growth over the forecast period. A substantial rise in the volume of molecules advancing through preclinical and clinical development pipelines, accompanied by increased investment in research and development activities, stands as a significant contributing factor. This surge reflects the global demand for novel treatment options, leading to more frequent engagement in clinical research activities and thereby fostering growth within this segment.
Active Pharmaceutical Ingredient CDMO Market Recent Developments
- In November 2023, Hovione expanded its nasal drug delivery through a partnership with IDC (Industrial Design Consultancy), introducing innovative nasal powder devices for local, systemic, and nose-to-brain drug delivery. The partnership enhances Hovione's integrated nasal drug development and manufacturing services
- In May 2023, GHO Capital and Partners Group announced an investment in Sterling Pharma Solutions, a leading CDMO. The investment supports Sterling's global growth, production capacity expansion, and strategic acquisitions, with GHO remaining the majority shareholder
- In April 2023, Cognizant announced a strategic partnership with Boehringer Ingelheim, a prominent research-focused biopharmaceutical firm, with an aim to accelerate the pace and enhance the quality of medicinal therapy developments
- In March 2023, NAGASE and HALIX partnered to offer comprehensive contract development and manufacturing services for biopharmaceuticals and APIs in Japan. The collaboration leverages HALIX's expertise in biomanufacturing, expanding NAGASE's presence in the high-molecular pharmaceuticals space
- In November 2022, Exelixis, Inc. signed a new license agreement with Catalent’s subsidiary, Redwood Bioscience. As per the agreement, Exelixis, Inc. paid USD 30 million to Catalent for developing 3 ADC programs for the former
- In May 2022, Piramal Pharma Solutions announced the successful launch of its new active pharmaceutical ingredient (API) facility in Aurora, Ontario, which at that time had already commenced operations and completed its initial production runs
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Active Pharmaceutical Ingredient CDMO Market Top Key Companies:
The following are the leading companies in the active pharmaceutical ingredient CDMO market. These companies collectively hold the largest market share and dictate industry trends. Financials, strategy maps & products of these active pharmaceutical ingredient CDMO companies are analyzed to map the supply network.
- Cambrex Corporation
- Recipharm AB
- Thermo Fisher Scientific Inc. (Pantheon)
- CordenPharma International
- Samsung Biologics
- Lonza
- Catalent, Inc.
- Siegfried Holding AG
- Piramal Pharma Solutions
- Boehringer Ingelheim International GmbH
Active Pharmaceutical Ingredient CDMO Market Report Segmentation
This report forecasts revenue growth at country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Nova one advisor, Inc. has segmented the Active Pharmaceutical Ingredient CDMO market.
By Product
- Traditional Active Pharmaceutical Ingredient (Traditional API)
- Highly Potent Active Pharmaceutical Ingredient (HP-API)
- Antibody Drug Conjugate (ADC)
- Others
By Synthesis
- Synthetic
- Biotech
By Drug
- Innovative
- Generics
By Workflow
- Clinical
- Commercial
By Application
- Oncology
- Hormonal
- Glaucoma
- Cardiovascular disease
- Diabetes
- Others
By Region
- North America
- Europe
- Asia-Pacific
- Latin America
- Middle East & Africa (MEA)
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Reasons to Purchase this Report
- Qualitative and quantitative analysis of the market based on segmentation involving both economic as well as non-economic factors
- Provision of market value (USD Billion) data for each segment and sub-segment
- Indicates the region and segment that is expected to witness the fastest growth as well as to dominate the market
- Analysis by geography highlighting the consumption of the product/service in the region as well as indicating the factors that are affecting the market within each region
- Competitive landscape which incorporates the market ranking of the major players, along with new service/product launches, partnerships, business expansions, and acquisitions in the past five years of companies profiled
- Extensive company profiles comprising of company overview, company insights, product benchmarking, and SWOT analysis for the major market players
- The current as well as the future market outlook of the industry with respect to recent developments which involve growth opportunities and drivers as well as challenges and restraints of both emerging as well as developed regions
- Includes in-depth analysis of the market from various perspectives through Porter’s five forces analysis
- Provides insight into the market through Value Chain
- Market dynamics scenario, along with growth opportunities of the market in the years to com
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