The Healthcare CMO market is estimated to be valued at US$ 447.11 Bn in 2031

A newly published report by Coherent Market Insights reveals a sustainable growth opportunity in the healthcare CMO market. Coherent Market Insights’ analyst projected the healthcare CMO market to be valued at US$ 447.11 Bn in 2031. It is expected to exhibit a CAGR of 14.7% over the forecast period 2024-2031.

Increasing research and development expenditure by pharmaceutical and biotechnology companies drives market. The huge capital required for R&D activities has compelled many small and medium pharmaceutical companies to outsource their manufacturing needs to contract manufacturing organizations.

Furthermore, advancements in technologies such as 3D printing, artificial intelligence, and the Internet of things are facilitating the development of personalized medicines and targeted therapies. Healthcare CMOs are well-equipped to manufacture such novel therapies through their facilities, expertise, and technical know-how.

Key market trends include:  One of the major trends in the Healthcare CMO market is the shift towards single-use technologies. Single-use systems reduce the risks of cross-contamination and product mix-ups, which is crucial for the production of drugs with a low dosage. They also help in minimizing cleaning and validation efforts. Several Healthcare CMOs are adopting single-use technologies such as single-use bioreactors, tubing, connectors, containers, and mixing systems to streamline their manufacturing processes.

Another trend gaining traction in the market is outsourcing of novel drug formulations. With technological advancements, novel drug delivery systems such as long-acting injectables, controlled-release formulations, and targeted drug delivery are being developed. However, manufacturing these complex formulations requires specialized expertise and infrastructure that is best provided by Healthcare CMOs.

Healthcare CMO Market Opportunities The pharmaceutical contract manufacturing services segment held the largest market share of over 45% in 2023. Within this segment, active pharmaceutical ingredients (API) manufacturing dominated due to the increased outsourcing of API production by pharmaceutical companies. As a result, many drug makers prefer outsourcing API manufacturing to contract manufacturers who have specialized production facilities.

The FDF manufacturing and packaging segment is expected to witness the fastest growth during the forecast period, growing at a CAGR of 15.3%. Increased outsourcing of secondary packaging, labelling and distribution of pharmaceutical drugs to contract packs is driving the growth of this segment.

Key Market Takeaways: The global healthcare CMO market is anticipated to witness a CAGR of 14.7% during the forecast period 2024-2031. This is driven by the rising need of pharmaceutical companies to reduce manufacturing costs and focus on their core activities.

On the basis of service type, the pharmaceutical contract manufacturing services segment is expected to hold a dominant position. This is owing to increased outsourcing of API and secondary packaging activities.

On the basis of region, North America is expected to hold a dominant position over the forecast period. This is due to presence of major pharmaceutical companies outsourcing production.

Competitor Insights: Key players operating in the healthcare CMO market include Lonza Group, Catalent, Inc., Thermo Fisher Scientific (Patheon), Recipharm AB, Siegfried Holding AG, Aenova Group, Almac Group, Piramal Pharma Solutions, Evonik Industries AG and Famar Health Care Services.

Recent Developments: In January 2023: Catalent announced a development and license agreement with Ethicann Pharmaceuticals Inc., a specialty pharmaceutical company based in Canada and the US. Ethicann focuses on high-value cannabinoid drug therapies and will leverage Catalent’s Zydis orally disintegrating tablet (ODT) technology to advance its clinical drug pipeline. Under the agreement, Catalent will use its Zydis technology to create pharmaceutical products containing cannabidiol (CBD) and tetrahydrocannabinol (THC) for use in Ethicann’s clinical trials targeting various conditions. More information in full report