U.S. Biotechnology And Pharmaceutical Services Outsourcing Market Size to Reach USD 16.68 Billion By 2033

October 4, 2024 |

1 min read

The U.S. biotechnology and pharmaceutical services outsourcing market size was USD 10.18 billion in 2023, calculated at USD 10.70 billion in 2024 and is expected to reach around USD 16.68 billion by 2033, expanding at a CAGR of 5.06% from 2024 to 2033.

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Key Takeaways

Based on the end-use, the pharmaceutical companies segment held the highest market share of 57.16% in 2023.
The biotech companies’ segment is expected to register a CAGR of 5.4% from 2024 to 2033.
The consulting services segment dominated the market and accounted for a revenue share of 24.96% in 2023.
The product design & development segment is expected to witness a CAGR of 4.19% from 2024 to 2033.

The market growth is fuelled by an increasing inclination towards outsourcing certain business functions such as clinical trials, drug development, and research. Furthermore, changing regulatory landscapes generate requirements for pharmaceutical and biotechnology companies. A rise in the availability of cost-effective services and drug development costs provided by outsourcing contractors also drive market growth in the U.S.

The U.S. 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. Various biotechnology and pharmaceutical companies are opting to outsource major business functions in the U.S. such as clinical trial applications, product registration, clinical development, and design verification & validation.

In addition, operational elements, such as training, auditing, product maintenance, strategy & concept generation, and quality management are also being outsourced to contractors, hence contributed to the growth of the U.S. biotechnology and pharmaceutical services outsourcing market.

Well-established contract research organizations, management consulting companies, manufacturers working on contracts, and outsourcing service providers are consistently taking care of the multifaceted demands of the pharmaceutical and biotechnological industry. However, an increase in failure rates, a rise in costs related to drug development, and increasing pressure on regulatory compliance have significantly affected the market growth in the U.S.

The U.S. Biotechnology and Pharmaceutical Services Outsourcing Market Trends

· The increasing complexity of clinical trials and drug discovery, tailored with the need to comply with strict regulatory requirements, leads to increased demand for specialized services.

· The increasing number of new outsourcing industry sectors, such as rising screening services, is expected to drive market growth.

· The growing cell banking business has enabled pharmaceutical and biotechnology services outsourcing companies to create profit on a large amount, which is further anticipated to enhance the growth of the market in the U.S.

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The U.S. Biotechnology and Pharmaceutical Services Outsourcing Market Segment Insights

By service insights

The consulting services segment dominated the U.S. biotechnology and pharmaceutical services outsourcing market share of 24.96 in 2023. Consulting companies provide various services to help biotechnology and pharmaceutical businesses reduce their environmental footprint and accomplish better follow to regulatory compliance. These companies deliver a greater level of experience and proficiency for a pharmaceutical company. Continuous growth in scientific innovations and a rise in fraudulent incidents in scientific innovations are the major challenges faced by biotechnological and pharmaceutical companies. Hence, these businesses choose to outsource some of their business functions.

The product design and development segment is expected to grow fastest during the forecast period. The product design and development companies offer services, such as formulation of optimizing and analyzing physical and chemical properties of API, formulation development studies analyzing the manufacturing route, composition, and optimal dosage form, analytical solutions for stability studies and complex research needs, such as time and requirements for regulatory submissions, management of changing CMC issues and nonclinical studies to support ongoing development activities.

By end use types

The pharmaceutical companies segment held the largest market share of 57.16% in 2023, based on the end-use. The segment growth is fueled by major factors such as enhanced quality standards attained through expert assistance, improved product responses, progress and developments accomplished by competitors via outsourcing, and changes in regulatory scenarios. To leverage their robust networks in different regions, pharmaceuticals have also been outsourcing distribution to different service providers.

The rising expenses in areas such as research and development, by pharmaceutical companies for the development and detection of potential exclusive products are expected to drive market growth in the coming years. In addition, the biotechnology companies' segment is anticipated to grow fastest during the forecast period.

U.S. Biotechnology and Pharmaceutical Services Outsourcing Company Insights

Some of the developing and major companies in the pharmaceutical and biotechnology services outsourcing market such as Simtra (Baxter), ICON Plc, Charles River Laboratories, Covance Inc. (Labcorp Drug Development), Lachman Consultant Services, Inc., Parexel International (MA) Corporation, IQVIA Inc., Lifecore Biomedical, Inc., AbbVie Inc., and others. The highly competitive market has been inspiring major companies to improve advanced technologies, develop highly competitive and skilled teams of experts, and accommodate changes in manufacturing processes.

· Covance, Inc. is a Contract Research Organization (CRO) that provides its services to pharmaceutical and biopharmaceutical industries. This mainly includes commercialization and clinical services, such as drug development. The company provides its services to companies operating in 60 nations across the globe and is owned by LabCorp Drug Development.

· AbbVie Inc. Is a pharmaceutical company in the U.S. that offers manufacturing services and contract development services associated with custom APIs, microbial fermentation, eye care, biologics, and more.

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Some of the prominent players in the U.S. biotechnology and pharmaceutical services outsourcing market include:

AbbVie Inc.
Lifecore Biomedical, Inc.
IQVIA Inc.
Parexel International (MA) Corporation
Lachman Consultant Services
Covance, Inc. (Labcorp Drug Development)
Charles River Laboratories
ICON plc
Simtra (Baxter)
Alcami Corporation

U.S. Biotechnology and Pharmaceutical Services Outsourcing Recent Developments

· In January 2024, one of the experienced CDMOs in the U.S. market, acquired Pacific Pharmaceutical Services Inc., a preferred provider of warehousing and related services for companies engaged in pharmaceutical developments. Alcami Corp. This enables Alcami Corp to enhance the safeguarding of materials from frequent natural disasters with multi-location facilities and cater to market needs on the West Coast.

· In October 2023, in Ahmedabad, India, a leading Contract Development and Manufacturing Organization (CDMO), Piramal Pharma Limited's Pharma Solutions (PPS) business, announced the launch of a world-class high-throughput screening facility that augments the existing in-vitro biology capabilities at its drug discovery services site. This new expansion significantly adds secondary and primary screening capabilities of compounds prepared at the Ahmedabad site.

· In April 2024, a Lithuania-based contract development and manufacturing organization, Memel Biotech announced the launch of a fully integrated advanced therapy development and manufacturing service at its facility in Klaipeda, Lithuania which will serve markets in the European Union (EU). With this new service. The aim behind this launch was to target partnerships with developing and developed biotech companies seeking to enter the advanced therapy medicinal product (ATMP) space.

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 2033. For this study, Nova one advisor, Inc. has segmented the U.S. biotechnology and pharmaceutical services outsourcing market

End-use