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The global biotechnology & pharmaceutical services market size was valued at USD 65.20 billion in 2021 and is projected to reach USD 105.11 billion by 2030 at a CAGR of 5.45% from 2022 to 2030.
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.
| Report Metric | Details |
|---|---|
| Base Year | 2021 |
| Study Period | 2020-2030 |
| Forecast Period | 2023-2031 |
| CAGR | 5.45% |
| Market Size | USD 105.11 billion by 2030 |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
| Report Coverage | Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends |
| Geographies Covered |
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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.
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 market expansion. 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.
This biotechnology & pharmaceutical services market can be segmented on the basis of services, end-users, geographical regions and competitors. With a percentage of revenue of 19.5% in 2021, the consulting services category led the market. Over the predicted term, the section should keep its position. The rise in M&A activity and ongoing changes to regulatory guidelines can be blamed for this. To counter this, companies like Signa Medical Writing, bioSyntagma, and Fieve Clinical Research, Inc. have been steadily entering the pharma and biotech sector. Because the newcomers lack the necessary skills, consulting is necessary for these players to be in compliance with established standards and norms.
The other services segment, which had a value of USD 10,649.1 million in 2021, is anticipated to grow at a rate of 6.4% during the projection period due to the increasing outsourcing of the production of generics and biosimilars since CMOs are providing services at a lower price. Contract manufacturing, product improvement, and IT consultancy all fall within the other division. Due to growing worries about biotechnology and pharmaceutical companies' ability to compete in the commercialisation of their products, the difficulty of conducting complex clinical trials, and the calibre of those trials, which have increased the importance of biostatistics, there is an increase in the outsourcing of biostatistics.
The market was led by the pharma sector, which in 2021 had the highest revenue share (55.7%). Over the projection period, the segment is predicted to grow at a CAGR of 5.7%. In the upcoming years, the market in the region is anticipated to be driven by rising investments made by CROs for the development of core capabilities as well as rising R&D expenditures by pharmaceutical companies for the creation of possible novel medicines. Contract service providers are acknowledged as an effective tactical choice to address the problems of drug shortage and excessive production costs while also supplying the expanding demand.
Due to a lack of resources, many pharmaceutical companies now entrust CROs and CMOs with the development of their goods and the manufacturing of their drugs. For a variety of pharmaceutical products, the CROs and CMOs provide highly sophisticated development and manufacturing services, including preclinical development, clinical development, commercial manufacturing, clinical manufacturing, precision injection moulding, high-speed automation, assembly, fill/finish, and others.
