CDMOs in Pharmaceutical Industry
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Pharma Tech Outlook: Pharma Tech Magazine

CDMOs in Pharmaceutical Industry

Stacey Smith, Pharma Tech Outlook | Wednesday, March 10, 2021

The CDMO market has seen a substantial expansion in recent years due to a rising global population, improved health coverage in developing countries, and an aging population in developed countries needing more medicine.

FREMONT, CA: By 2025, the CDMO (contract development and manufacturing organization) industry will be worth 158 billion dollars, up from 99 billion dollars in 2018. This results in a forecast compound annual growth rate (CAGR) of 6.9 percent, meaning that the demand will expand rapidly and continuously over the next five years. Large pharmaceutical companies' willingness to rely on outsourced facilities and smaller companies without in-house manufacturing sites has helped the CDMO industry prosper.

The CDMO market has seen a substantial expansion in recent years due to a rising global population, improved health coverage in developing countries, and an aging population in developed countries needing more medicine. Another explanation for the success is that pharmaceutical firms are getting more likely to use outsourcing facilities. The Asia Pacific region, specifically China and India, is the key source of development. This is due to significantly lower production prices than in areas like North America and Europe and more favorable regulations.

On the other hand, the U.S is the most popular destination for pharmaceutical development outsourcing, owing to the vast number of research institutions, such as university-affiliated pharmaceutical research clusters. Quality, infrastructure, regulations, and intellectual property rights concerns make developed countries a less appealing choice for outsourcing pharmaceutical production. Even though solid dosage formulations remain the most common formulations, the sterile liquids take up a greater share of the CDMO market. The growth of biologics is said to be a big cause of this expansion.

The Future of Outsourcing

The CDMO industry provides opportunities such as technological advancements, innovative organizational strategies, higher business values, and high profitability in a consolidated sector. With the rising number of complex and high-potency compounds, CDMOs can distinguish themselves by using advanced technologies and specialist knowledge. Contract Research Organizations (CROs) and CDMOs are gradually integrating their resources to offer pharmaceutical firms one-stop shopping. They span the entire industry chain, from drug discovery to commercialization, helping companies upsell initiatives by catching ventures early on.

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