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Key Takeaways
- The consulting services segment dominated the market with the largest revenue share of over 24% in 2024.
- The regulatory affairs segment is expected to witness the highest CAGR of 8.37% over the forecast period.
- The pharmaceutical companies segment dominated the market with the largest revenue share 60.0% in 2024.
- The biotechnology companies segment is expected to witness the fastest CAGR over the forecast period.
- The biotechnology and pharmaceutical services outsourcing market of North America held a significant market share in 2024.
- The biotechnology and pharmaceutical services outsourcing market in the U.S. held dominant share in North America in 2024.
Market Overview
The market is attributed to the low-cost service deployment to contract research organizations (CROs), increasing regulatory frameworks, diminishing internal capabilities, and rising drug development costs.
The biotechnology and pharmaceutical services outsourcing market deals with the practice of contracting with external organizations to perform various activities related to manufacturing, clinical trials, drug discovery, and other biotechnology and pharmaceutical services. This enables biotechnology and pharmaceutical companies to focus on their core competencies including research and development, while leveraging the resources and expertise of specialized service providers.
Well-developed outsourcing service providers, manufacturers working on contracts, management consulting companies, and contract research organizations are continuously taking care of the multifaceted demands of the biotechnological and pharmaceutical industries. However, increasing pressure on regulatory compliance, an increase in failure rates, and a rise in costs related to drug development have restrained the market growth.
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Major Applications of Biotechnology and Pharmaceutical Services Outsourcing
· Clinical Trials Management - Outsourcing clinical trials to Contract Research Organizations (CROs) to streamline patient recruitment, data management, and regulatory compliance.
· Drug Discovery and Development - Partnering with biotech firms for advanced drug research, molecular screening, and preclinical development to accelerate the discovery pipeline.
· Regulatory Affairs - Outsourcing regulatory documentation and compliance services to navigate complex FDA and EMA approval processes for drugs and therapies.
· Manufacturing and Supply Chain - Contract Manufacturing Organizations (CMOs) handling drug production, packaging, and distribution with Good Manufacturing Practices (GMP) standards.
What are the market trends?
· The rising complexity of drug discovery and clinical trials, tailored with the need to comply with stringent regulatory requirements, leads to increased demand for specialized services.
· The growing number of new outsourcing industry sectors, such as increasing screening services, is estimated to enhance market growth.
· The growing cell banking business has allowed biotechnology and pharmaceutical services outsourcing companies to create profit on a large amount, which is further expected to drive the market growth during the forecast period.
Service Outlook
The consulting services segment dominated the market with the largest revenue share of over 24% in 2024. Consulting companies offer several services to help pharmaceutical and biotechnology businesses minimize their environmental footprint and accomplish better follow-up regulatory compliance. The segment growth is attributed to the constantly changing regulatory protocols and increasing M&A activities. However, the biotech and pharma market has experienced a rapid entry of new players, such as Fieve Clinical Research, Inc., Signa Medical Writing, and bioSyntagma. These players need to be compliant with set norms and standards.
The regulatory affairs segment is expected to witness the highest CAGR of 8.37% over the forecast period. In the healthcare industry, outsourcing trends for regulatory affairs have become an important practice significantly. A rise in geographical growth activities by companies that aim for rapid approvals in local markets is anticipated to drive the market segment.
End Use Outlook
The pharmaceutical companies segment dominated the market with the largest revenue share 60.0% in 2024. A rise in investments by CROs for the development of core capabilities and an increase in research and development spending by pharmaceutical companies for the development of potential novel products are anticipated to enhance the market demand in the region.
The biotechnology companies segment is expected to grow fastest during the forecast period. The segment growth is attributed to the rapidly increasing biotech product pipelines, along with a trend toward biotechnology. In addition, contract research organizations focus on adapting their services to smaller biotechnology companies, which have developed as major players in the clinical development of novel medicines and are expected to drive the expansion and innovation of segment growth.
Regional Outlook
North America dominated the biotechnology and pharmaceutical services outsourcing market in 2023. The market growth is attributed to the strong prevalence of various developed CMOs and CROs, such as Samsung Biologics, IQVIA, Catalent, and Thermo Fisher Scientific, and increasing research and development investments by pharmaceutical companies and life sciences in the region. The rising research and development spending and the strong presence of strict regulatory policies across major factors that are expected to drive the demand for pharmaceutical and biotechnology services in the region.
Furthermore, the expansion of various CROs and CMOs into the country is expected to drive market growth. For instance, in May 2022, to improve its capabilities in the manufacture and development of inhaled formulations, Lonza expanded its inhalation facility at its Tampa (the U.S.) site.
U.S. Market Trends
The U.S. dominated the biotechnology and pharmaceutical services outsourcing market in 2024. Biotechnology and pharmaceutical companies outsource part of their regulatory functions, including product design & maintenance, clinical trial application services, and writing and publishing to regulatory service providers, thereby driving market growth. In addition, outsourcing aids a company to improve its service delivery and concentrate more on its core capabilities, thereby offering competitive benefits and further driving the market growth in the U.S.
Asia Pacific is expected to grow fastest during the forecast period. The market growth in the region is attributed to the increasing various reforms in clinical trial evaluation and the rise in investments by developed countries to align with the standards of several countries investing in the region. The availability of a skilled workforce and low cost of drug manufacturing and development. In addition, China, India, Japan, and South Korea are the major countries in the region. For instance, in August 2022, a Chinese CDMO entity, Porton Advanced Solutions raised USD 80 million to advance the gene and cell therapy platform.
China Market Trends
China is the major country in the healthcare industry. The market growth is leading to the entry of service providers and new players in the country, which can be attributed to strict standards of patient safety in conducting clinical trials easy access to cheap labor, and a large patient pool. Furthermore, the rising adoption of global R&D standards, high R&D capacity, increasing investments to improve technology, and low operating costs to address international requirements are the major factors driving the market demand for consulting and regulatory services in China.
Company Insights
The major companies are implementing various market strategies, such as competitive pricing, service portfolio expansion, regional expansion, collaboration, and merger & acquisition, to acquire a higher market share and sustain in the competitive environment.
For instance, in May 2024, for the expansion of its production services and capacities at its Austrian site. This strategic initiative comes in response to increasing demand from pharmaceutical clients, aiming to address increased requirements for services and to address their evolving needs, such as packaging, aseptic filling, and drug development.
Some of the prominent players in the biotechnology and pharmaceutical services outsourcing market include:
- Parexel International Corporation
- The Quantic Group
- IQVIA
- Lachman Consultant Services, Inc.
- GMP Pharmaceuticals Pty Ltd.
- Concept Heidelberg GmbH
- LabCorp
- Charles River Laboratories
- ICON plc.
- Syneos Health
- Lonza
- Catalent Inc.
- Samsung Biologics
Biotechnology And Pharmaceutical Services Outsourcing Market Recent Developments
- In September 2024, ICON plc partnered with U.S. Biomedical Advanced Research and Development Authority (BARDA) for initiation of a clinical trial designed for evaluation of effectiveness of next-gen COVID-19 vaccine candidates.
- In September 2024, Charles River Laboratories International, Inc. declared a collaboration agreement encompassing multiple programs to deploy Logica across various targets within the RS portfolio previously unexplored for drug development. Logica is an Artificial Intelligence (AI)-driven drug solution that converts biological insights into refined assets.
- In September 2024, Syneos Health and Oracle extended their partnership. The companies hope to shorten the time it takes to find patients for clinical studies and broaden the patient populations taking part in medical research by utilizing the Oracle Cerner Learning Health Network (LHN) and some of Oracle's study startup solutions.
- In May 2024, LabCorp declared its commitment to enhancing the enduring strategic collaboration with Providence through a newly established agreement. As part of this arrangement, LabCorp will acquire the outreach laboratory business of Providence Oregon and specific assets situated in Oregon.
- In March 2024, Charles River launched Apollo, a cloud-based platform that assists drug developers in accessing study data, study milestones, documents, cost estimates, and program planning tools.
Related Report
- North America Biotechnology And Pharmaceutical Services Outsourcing Market- The North America biotechnology and pharmaceutical services outsourcing market size was exhibited at USD 12.85 billion in 2023 and is projected to hit around USD 21.21 billion by 2033, growing at a CAGR of 5.14% during the forecast period 2024 to 2033.
- Europe Biotechnology And Pharmaceutical Services Outsourcing Market- The Europe biotechnology and pharmaceutical services outsourcing market size was exhibited at USD 10.25 billion in 2023 and is projected to hit around USD 17.94 billion by 2033, growing at a CAGR of 5.76% during the forecast period 2024 to 2033.
- Asia Pacific Biotechnology And Pharmaceutical Services Outsourcing Market- The Asia Pacific biotechnology and pharmaceutical services outsourcing market size was exhibited at USD 19.18 billion in 2023 and is projected to hit around USD 35.23 billion by 2033, growing at a CAGR of 6.27% during the forecast period 2024 to 2033.
- U.S. Biotechnology And Pharmaceutical Services Outsourcing Market- The U.S. biotechnology and pharmaceutical services outsourcing market size was exhibited at USD 10.18 billion in 2023 and is projected to hit around USD 16.68 billion by 2033, growing at a CAGR of 5.06% during the forecast period 2024 to 2033.
Segments Covered in the Report
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 2034. For this study, Nova one advisor, Inc. has segmented the biotechnology and pharmaceutical services outsourcing market
By Service
- Consulting
o Regulatory Consulting
o Clinical Development Consulting
o Strategic Planning & Business Development Consulting
o Quality Management Systems consulting
o Others
- Regulatory Affairs
o Legal Representation
o Regulatory Writing & Publishing
o Product Registration & Clinical Trial Applications
o Regulatory Submissions
o Regulatory Operations
o Others
- Product Design & Development
o Research, Strategy, & Concept Generation
o Concept & Requirements Development
o Detailed Design & Process Development
o Design Verification & Validation
o Process Validation & Manufacturing Transfer
o Production & Commercial Support
o Auditing and Assessment
o Product Maintenance
o Training & Education
o Others
By End-use
- Pharmaceutical Companies
- Biotech Companies
By Regions
- North America
- Europe
- Asia Pacific
- Latin America
- Middle East and Africa (MEA)
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