The global biotechnology & pharmaceutical services market size was valued at USD 72.50 billion in 2023 and is projected to reach USD 116.88 billion by 2032 at a CAGR of 5.45% the forecast period (2024-2032)
Clinical trials have been delayed, suspended, and terminated as a result of the COVID-19 pandemic, which has had a severe impact on biotechnology and pharmaceutical third-party service providers. The demand for virtual trials and the use of technology and software solutions has increased due to the worldwide crisis. The recovery from the pandemic has accelerated the implementation of machine learning-based platforms, artificial intelligence, automation in the drug manufacturing process, and creative trial designs, all of which are expected to fundamentally alter the CRO and CMO landscape in the years to come.
The R&D activity, along with drug development services, is being driven by biopharmaceutical and pharmaceutical investments in cutting-edge therapies, like regenerative medicine. The development of service offerings by Contract Manufacturing Organizations (CMOs)/Contract Research Organizations (CROs) for biotechnology and pharmaceutical products is a result of the increased demand for biologics as well as small molecules.
Pharmaceutical and biopharmaceutical companies provide cost-saving options to their customers because selecting eco-friendly vendors may result in lower prices over time. Additionally, they aid in reducing the amount of time needed for the management and operation of a facility for manufacturing and research. It is possible to develop products at low cost and manufacture them at low-cost thanks to contract research and production. Services for outsourcing also help businesses enter overseas markets more easily and get around trade barriers. Many businesses decide to outsource services due to these benefits rather than spending money on production equipment and recruiting experienced employees.
Margin pressure from rising prices, complicated regulations, and patent expiration has caused the biotech and pharmaceutical industries to see a decline. Given that they assist in resolving these problems, contract services are regarded by the firms as a "strategic competitive weapon."
The biologics sector has expanded significantly in recent years to incorporate novel product categories like nanobodies, rDNA, synthetic vaccines, fusion proteins, soluble receptors, immunoconjugates, and immuno-therapeutics. This industry has also given many chances to investigate hybrid structures that incorporate biologics with well-defined chemical entities because biologics have revolutionised the treatment of disease. The demand for outsourcing biologics development and manufacturing is anticipated to rise as a result of the increasing increase in biologics.
| Study Period | 2020-2032 | CAGR | 5.45% |
| Historical Period | 2020-2022 | Forecast Period | 2024-2032 |
| Base Year | 2023 | Base Year Market Size | USD 72.50 Billion |
| Forecast Year | 2032 | Forecast Year Market Size | USD 116.88 Billion |
| Largest Market | North America | Fastest Growing Market | Asia Pacific |
The highest revenue shares in 2021 (53.8 %) belonged to North America, which dominated the market. This development is the result of a number of well-established CROs and CMOs, including Covance Inc., IQVIA, Catalent, and Samsung Biologics, as well as rising R&D expenditures by the region's life sciences and pharmaceutical firms. One of the variables that are predicted to increase the need for outsourcing of services by pharmaceutical and biotechnology companies in the area is the existence of strict regulatory laws and growth in R&D expenditure. In addition, it is anticipated that the entry of overseas CMOs and CROs will spur biotechnology & pharmaceutical services market growth. For instance, to increase its footprint outside of Asia and boost its market position, Bora Pharmaceuticals received FDA certification for its CMO services in September 2019, and in October 2019, it built a sales office in Delaware.
Due to an increase in investments from developed nations and various regulatory reforms in clinical trial evaluation to conform to the standards of various countries investing in the region, the Asia Pacific biotechnology and pharmaceutical services outsourcing market is predicted to experience a CAGR of 6.1% over the forecast period. Due to the low cost of producing drugs and the availability of trained labour, contract manufacturing and development are anticipated to flourish in this area. Additionally, it is projected that economic policy changes in nations like China would lead to the development of an open and balanced economy, which will provide market participants with several opportunities to engage in this area. With the opening of Novotech SMO Korea Co. Limited in July 2017, Novotech expanded its site management services in Korea.
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The global biotechnology & pharmaceutical services market is segmented by services and by end users
The market is segmented into consulting, regulatory affairs, product design & development, auditing and assessment, product maintenance, training & education, and, others.
The pharmaceutical and biotechnology services sector offers diverse expertise. Regulatory consulting, clinical development consulting, and navigating the quality management system are just a few areas where consulting organizations help with strategic planning and regulatory needs. Regulatory affairs experts handle legal issues, product registration applications and formal deliveries to ensure compliance throughout the drug life cycle. Product design and development covers all stages of the process, from preliminary research to post-commercialization support. In addition, product maintenance ensures continued drug safety, audit and evaluation services maintain quality, and training programs provide employees with the necessary skills.
The consultancy sector is presently dominating the biotechnology & pharmaceutical services industry, potentially as a result of the pharmaceutical industry's long existence and the continued need for conventional drugs. The consulting industry continues to face a large percentage of regulatory challenges, which emphasizes the critical role that handling complicated regulations plays throughout the drug development process.
The market is segmented into pharmaceutical companies and biotech companies.
Pharmaceutical and biotechnology firms are the two primary end consumers that are catered to by the pharmaceutical and biotechnology services companies. At the moment, the pharmaceutical industry leads the market. The pharmaceutical industry's established practices, the enormous number of medications in use and requiring for development and maintenance services, and the relative maturity of the regulatory landscape for traditional pharmaceuticals relative to emerging biotechnologies are all likely contributing factors to this dominance. With advancements in fields like gene therapy and customized medicine, the biotechnology segment is rising considerably even if its present market share is less. This suggests that the market's position might shift in the future.
