The global healthcare contract development and manufacturing organization market size was USD 250.19 billion in 2023, calculated at USD 274.43 billion in 2024 and is expected to reach around USD 630.87 billion by 2033, expanding at a CAGR of 9.69 % from 2024 to 2033. North America dominated the healthcare CDMO market with the largest revenue share of 41.56% in 2023.
The Healthcare CDMO (Contract Development and Manufacturing Organization) sector is poised for significant growth, driven by its ability to provide manufacturing technology on par with that of established pharmaceutical companies. To achieve a status akin to semiconductor foundries, Healthcare CDMO must continuously acquire and develop cutting-edge manufacturing technologies. The industry has seen numerous technological advancements in both drug discovery and manufacturing processes, reinforcing the importance of a horizontal division model. In this model, biopharmaceutical and biotech companies concentrate on drug discovery and development, while CDMOs specialize in process development and manufacturing. This specialization not only enhances efficiency but also fuels the expansion of the healthcare CDMO market.
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Market Overview
The healthcare CDMO market is experiencing rapid growth, driven by the significant advancements in the biopharmaceutical industry post-millennium. With the continuous development of novel biopharmaceuticals and blockbuster drugs, the demand for biopharmaceuticals has surged, giving rise to the CDMO business model. CDMOs are entrusted with developing and manufacturing production processes for pharmaceutical companies, similar to the foundry model in the semiconductor industry. The success of Healthcare CDMO can be attributed to their ability to provide innovative technologies and expertise, keeping pace with the latest trends in drug development and manufacturing.
By leveraging their experience and advanced equipment, CDMOs can help biopharmaceutical companies accelerate time to market, optimizing processes and streamlining development, manufacturing, and approval timelines. This capability positions CDMOs as crucial partners in the evolving pharmaceutical landscape, driving the growth and expansion of the healthcare CDMO market.
- In October 2023, SHL Medical and Lifecore Biomedical entered into a co-marketing partnership agreement
- In November 2023, Sysmex and Fujirebio expanded their CDMO partnership into the field of neurodegenerative diseases under their immunoassay collaboration
Healthcare Contract Development and Manufacturing Organization Market Report Highlights
- Based on services, the contract manufacturing segment dominated the market with a revenue share of 74.12% in 2023 due to increase in the outsourcing of manufacturing services by pharmaceutical and medical device companies.In addition, cost-effectiveness, and the increasing number of CMOs are some of the key factors that are positively affecting the market growth
- By small molecule contract development sub-segment, the preclinical/segment is expected to register the highest CAGR of 9.53% in the forecast period due to the rising pipeline of novel therapeutics
- North America dominated the healthcare contract development and manufacturing organization industry with the largest revenue share of 41.56%in 2023. High shares of the region are majorly due to the presence of a large number of actively functioning CROs and CMOs in the region, especially across the U.S.
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U.S. Healthcare Contract Development and Manufacturing Organization Market Size and Growth 2024 to 2034
The U.S. healthcare contract development and manufacturing organization market is valued at USD 71.19 Billion in 2023 and is projected to reach a value of USD 179.84 Billion by 2033 at a CAGR (Compound Annual Growth Rate) of 9.71% between 2024 and 2033.
The North American healthcare CDMO market commands the largest share globally, driven by significant players such as Pharma science, which aims to lead the sterile injectable CDMO segment and deliver world-class services to meet global customer and patient needs. Within this region, the healthcare sector in Mexico is notable for its complexity and diversity, featuring a substantial private hospital sector that caters to individuals seeking premium healthcare outside the public system. Meanwhile, the United States, with its population exceeding 330 million, boasts one of the most intricate healthcare systems worldwide. This system is characterized by complex interactions among providers, payers, and patients, and is continually evolving to adapt to new challenges and innovations. These dynamics underscore the pivotal role of North America in the healthcare CDMO market, driven by a robust infrastructure and continuous advancements in healthcare delivery.
- In June 2024, Bionova Scientific, a U.S. biologics CDMO of the Asahi Kasei Group, announced the establishment of a facility in Texas and the launch of its plasmid DNA business.
The healthcare CDMO market in Asia Pacific is poised for robust growth, with a significant compound annual growth rate (CAGR) expected. Pharmaceutical sectors in this region increasingly rely on CDMOs for clinical candidate development, manufacturing, candidate registration, and market authorization. Companies are re-evaluating their traditional production processes by leveraging CDMO facilities to manage resources and assets more efficiently while controlling costs. India’s CDMO sector has quickly emerged as a crucial player in the global healthcare landscape. Concurrently, China is witnessing a surge in development products, with a shift from me-too products to those with novel mechanisms of action, particularly in addressing unmet therapeutic needs like cancer. These advancements highlight the dynamic growth and strategic importance of the Asia Pacific CDMO market in the global pharmaceutical industry.
- In January 2024, Alcami announced the acquisition of Pacific Pharmaceutical Services, a West Coast-based company
Healthcare Contract Development And Manufacturing Organization Market Regional Trends
U.S. Healthcare Contract Development And Manufacturing Organization Market Trends
The healthcare contract development and manufacturing organization market in the U.S. held the largest share in 2023. The country accounts for the highest share of the North American Healthcare contract development and manufacturing organization industry owing to increasing outsourcing practices by pharmaceutical companies. Besides, the CDMOs’ support in reducing operational and capital expenses is among the key factors responsible for its lucrative growth. Medical device companies in the U.S. are popular globally for their technologically advanced products. In addition, strong R&D practices in the country and the promotion of new therapies have significantly contributed to the market share held by the U.S.
Europe Healthcare Contract Development And Manufacturing Organization Market Trends
The healthcare contract development and manufacturing organization market in Europe is expected to grow significantly due to the presence of established market players coupled with superior manufacturing capabilities. Furthermore, increasing investments by multinational companies are anticipated to boost the market.
Germany healthcare contract development and manufacturing organization market held the largest share in 2023. The medical device industry in Germany is known for producing high-quality medical equipment. It is the third-largest market for medical devices globally. Besides, the demand for healthcare CDMOs in the country has increased considerably over recent years. Increasing complexity in product designs and stringent regulatory norms are key factors anticipated to propel the market during the forecast period.
The healthcare contract development and manufacturing organization market in the UK is anticipated to grow over the forecast period. The presence of various multinational CDMOs in the country is anticipated to contribute to market growth. Some of the key CDMOs present in the country are Catalent, Inc., Almac Group Ltd., GlaxoSmithKline Plc, and PCI Pharma Services. Such factors are
Asia Pacific Healthcare Contract Development And Manufacturing Organization Market Trends
The healthcare contract development and manufacturing organization market in Asia Pacific is expected to grow at a CAGR of 10.60% during the forecast period. The healthcare contract development and manufacturing organization market in Asia Pacific has witnessed significant growth due to increased complexity in product designs, improved regulatory framework, and a growing number of regional medical device companies expected to drive the market. Furthermore, the availability of a skilled workforce in the region at a lower cost than the U.S. is anticipated to propel the market.
China healthcare contract development and manufacturing organization market is expected to grow over the forecast period due to the growing geriatric population, and the presence of a large middle-income group is likely to boost the demand for innovative and cost-effective medical equipment, attracting major medical device companies to the country.
The healthcare contract development and manufacturing organization marketin Japan held the largest share in 2023 due to rapid technological advancements and high healthcare expenditure. Besides, the presence of a stringent regulatory framework and high standards for medical device manufacturing is leading to an increase in overall costs, thus increasing the need to maintain standards while reducing healthcare expenditure.
India healthcare contract development and manufacturing organization market is anticipated to grow at the fastest CAGR over the forecast period. Low labor costs, improvements in infrastructure, and easy availability of technical expertise are some of the major drivers of this market.
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Report Highlights
By Services
Based on services, the healthcare contract development and manufacturing organization (CDMO) market is divided into contract development and contract manufacturing, with the latter commanding the largest market share. Pharmaceutical contract manufacturing involves services rendered by a contract manufacturer who produces goods or services for a pharmaceutical company. These manufacturers can produce various pharmaceutical forms, including pills, liquid medicines, and lotions, based on specific instructions. Alongside manufacturing, contracting has become increasingly prevalent in research, where pharmaceutical research contractors offer a range of services, such as product development and formulation, clinical trials, and the preparation and submission of New Drug Applications to the Food and Drug Administration. This dual focus on manufacturing and research services highlights the comprehensive capabilities and growing significance of CDMOs in the pharmaceutical industry.
The contract development segment is anticipated to experience the fastest compound annual growth rate (CAGR) within the healthcare CDMO market. This segment provides a comprehensive blend of research and manufacturing services, delivering end-to-end support for pharmaceutical companies. From the early stages of research and development to the manufacturing and packaging of the final product, contract development services ensure a seamless transition through each phase. This holistic approach not only accelerates the drug development process but also enhances efficiency and cost-effectiveness, underscoring the growing importance and rapid expansion of the contract development segment in the pharmaceutical industry.
Browse More Insights of Towards Healthcare: Nova One Advisor
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· Active Pharmaceutical Ingredient CDMO Market Size (USD 249.22 Billion ) Report by 2033
· Cell And Gene Therapy CDMO Market Size (USD 69.11 Billion ) Report by 2033
· Advanced Therapy Medicinal Products CDMO Market Size (USD 34.53 Billion ) Report by 2033
· Biotechnology Market Size (USD 5.68 Trillion ) Report by 2033
· Clinical Trials Market Size (USD 153.59 Billion) Report by 2033
Market Dynamics
Driver
Integrated Solutions in the Healthcare
A contract development and manufacturing organization (CDMO) provides end-to-end, fully integrated drug development and manufacturing solutions and services to biotechnology and pharmaceutical companies. By offering customized services that encompass drug discovery, preclinical development, clinical trial support, manufacturing, and regulatory compliance, CDMOs specialize in the timely and cost-effective development and production of high-quality pharmaceutical products. This comprehensive service model is a significant driver of growth in the healthcare CDMO market, as it allows pharmaceutical companies to streamline their operations, reduce costs, and accelerate the time-to-market for new drugs.
- In April 2024, Curida, a CDMO specializing in small molecules and biologics, secured a private equity investment from Signet Healthcare Partners.
Restraint
Supply Chain and Speed Challenges
The healthcare CDMO market faces significant restraints due to supply chain challenges and the need for extraordinary agility. High demand for critical supplies from manufacturing, healthcare, and other essential businesses, coupled with nations ramping up stockpiling measures, creates persistent supply shortages. For CDMOs, maintaining pandemic levels of activity requires adapting to rapidly changing needs with exceptional speed, demanding extreme agility. These challenges in supply chain management and the ability to swiftly respond to dynamic demands limit the growth potential of the healthcare CDMO market.
Opportunity
AI Integration
AI offers transformative opportunities for the healthcare CDMO market by enhancing the analysis of consumer complaints and deviation reports. By processing large volumes of text, AI can identify cluster problem areas and prioritize continual improvement efforts. This capability allows for the detection of trends in manufacturing-related deviations, facilitating more comprehensive root cause identification, as endorsed by the FDA. Integrating AI with process performance and capability metrics enables proactive monitoring of manufacturing operations, predicting thresholds for triggering corrective and preventive action effectiveness evaluations. This technological advancement not only supports operational efficiency but also creates substantial growth opportunities within the healthcare CDMO market.
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Healthcare Contract Development And Manufacturing Organization Market Top Key Companies:
- Catalent Inc.
- Lonza
- Recipharm AB
- Siegfried Holding AG
- Thermo Fisher Scientific, Inc.
- Labcorp Drug Development
- Jabil Inc
- Syngene International Limited
- IQVIA Inc.
- Almac Group
- Ajinomoto Bio-Pharma
- Adare Pharma Solutions
- Alcami Corporation
- Vetter Pharma International
Healthcare Contract Development And Manufacturing Organization Market Recent Developments
- In March 2024, LGM Pharma announced 50% expansion and an investment exceeding USD 2 million in its Analytical Testing Services (ATS) with the introduction of new suppository manufacturing capabilities to its contract development and manufacturing (CDMO) portfolio.
- In September 2023, WuXi Vaccines had announced vaccines CDMO site in China. The site will add drug substance and drug product capacity with end-to-end services for diversified vaccine that will accelerate project time from process development and drug product development to clinical-scale drug substance and small-to-medium sterile drug product manufacturing.
- In April 2024, Blue Wolf Capital acquired OSD CDMO sites from Recipharm
- In June 2024, Lotte Biologics and Merck KGaA inked a partnership deal for biopharma production,
- In July 2024, MedPharm, Ltd., and Tergus Pharma merged to form a leading topical and transepithelial CDMO
- In July 2024, Tergus Pharma merged with fellow dermatology CDMO MedPharm.
Healthcare Contract Development And Manufacturing Organization 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 Healthcare Contract Development And Manufacturing Organization market.
By Services
- Contract Development
- Small Molecule
- Preclinical
- Bioanalysis and DMPK Studies
- Toxicology Testing
- Other Preclinical Services
- Clinical
- Phase I
- Phase II
- Phase III
- Phase IV
- Laboratory Services
- Bioanalytical Services
- Analytical Services
- Preclinical
- Large Molecule
- Cell Line development
- Process Development
- Upstream
- Microbial
- Mammalian
- Others
- Downstream
- MABs
- Recombinant Proteins
- Others
- Others
- Small Molecule
- Contract Manufacturing
- Small Molecule
- Large Molecule
- MABs
- Recombinant Proteins
- Others
- High Potency API
- Finished Dose Formulations
- Solid Dose Formulation
- Liquid Dose Formulation
- Injectable Dose Formulation
- Medical Devices
- Class I
- Class II
- Class III
By Region
- North America
- Europe
- Asia-Pacific
- Latin America
- Middle East & Africa (MEA)
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