Pharmaceutical Analytical Testing Market

Market Overview

The global pharmaceutical analytical testing market size was valued at USD 7.13 billion in 2021. It is predicted to reach an expected value of USD 13.45 billion by 2030, registering a CAGR of 7.3% during the forecast period (2022-2030).

Pharmaceutical analytical testing outsourcing is the structure of public services from the testing, manufacturing, and supporting the pharmaceuticals and therapeutics. This includes validating pharmaceutical components, mixtures, and manufacturing methods necessary for advancing these drugs.

According to the 2019 study published in the International Journal of Environmental Research and Public Health, around 40 medications are recalled annually in the United States and South Korea. However, the poor quality of medicines would adversely affect the patient's health and the fund systems. Therefore, analytical testing is critical to ensure the drug's safety and efficacy.

The significant contributors to the market growth are the focus on analytical testing of biologics and the increasing number of clinical trials. This emerges the requirement for testing the products and ensuring safety. Medicines are intended for a better outcome for humans and animals.

Market Dynamics

Global Pharmaceutical Analytical Testing Market Drivers

Increasing Number of Clinical Trials

Along with the increased disease burden, the growing patient population also contributed to drug discovery research and development, which helped the industry's need for clinical trials. Additionally, it is anticipated that clinical trial expenditures would benefit the market's growth in the near future.

According to the OECD'sOECD's Health at a Glance 2019 report, on average, across 27 OECD countries worldwide, about one-third of adults aged 15 and over reported having two or more chronic diseases, which include diabetes, cancer, heart disease, and stroke. Nearly one in two people in Germany and Finland have a chronic condition.

As per June 2021 updated data by Clinicaltrials.gov, it was found that currently, around 379,601 studies are undergoing globally with locations in all 50 States and 220 countries; a significant number of trials are related to various types of drugs which is likely to drive the demand for the pharmaceutical analytical testing services during their development process.

Thus, an increasing number of clinical trials coupled with other growth strategies adopted by key players in clinical trials is likely to drive market growth during the forecast period.

Focus on Analytical Testing of Biologics and Biosimilars

Because these vast molecules are susceptible to and influenced by changes in their manufacturing process, biologics testing is a crucial step during development and production. As a result, quality, safety, and efficacy must be continuously checked to meet tight regulatory criteria.

The development of a biologic or biosimilar is primarily focused on determining the comparability (European Union) or similarity (USA) of the biosimilar to the original, as well as the confirmation of similarity, which depends on in-depth analytics looking at physiochemical, structural, and biological potency attributes. Preclinical and necessary clinical trials, together with related pharmacokinetics, immunogenicity, pharmacodynamic, and bioanalysis studies that support comparative safety and efficacy studies, are carried out after this phase.

For instance, In September 2020, a UK-based contract development and manufacturing organization (CDMO), Almac Sciences, launched GMP lot release and stability testing services to support drug substance and drug product programs for novel biosimilars and biologics. Therefore, it is expected to propel further the market studied over the forecast period.

Global Pharmaceutical Analytical Testing Market Restraint

Complex Regulatory Framework for Maintaining Laboratories

The manufacturer of biopharmaceuticals faces challenges when ensuring product quality and patient safety. The development of pharmaceuticals brought a transformation in human health. However, these pharmaceuticals would serve their intent only if they are free from impurities and are administered in an appropriate amount. 

The information required to create a safe and effective drug product can be obtained from analytical testing. While the analytical platform technologies for monoclonal antibody products have helped the biopharmaceutical industry successfully lower risk, novel compounds and drug conjugates present additional difficulties. Biopharmaceuticals are challenging to manufacture and need specialized and expensive processing and purification methods. Their sensitivity to environmental conditions also makes it challenging to develop their biosimilars, as a minor variation in the production process may significantly disrupt the safety and efficacy of the final product.

Other challenges, such as the development and maintenance of expertise, maintenance and updating of equipment, and the introduction of new test methods, are familiar in analytical laboratories. Hence, these challenges are expected to hinder the market growth.

Global Pharmaceutical Analytical Testing Market Opportunities

Increased Trend of Outsourcing Laboratory Testing Services

The increasing development of pharmaceutical drugs globally is raising the demand for outsourcing services. Not all pharma or biotech companies can perform analytical testing independently with in-house capabilities. Thus most pharma and biotech firms outsource analytical testing services from outsourcing firms. For instance, As of 2020, approximately 4,500 medicines were in the preclinical development phase of the drug pipeline in the United States as per the Pharmaceutical Research and Manufacturers of America (PhRMA)

Companies are strengthening their market positions by providing various services and solutions due to the rising trend of outsourcing laboratory testing services. Major participants also concentrate on other strategies, including mergers, acquisitions, and other advancements. Charles River announced the acquisition of Citoxlab in April 2019. Due to Citoxlab's competence in offering CRO (Contract Research Organization) services to North America and Europe, this acquisition helped Charles River further expand its geographic dominance. This acquisition is a calculated strategic move, given the growing popularity of outsourcing pharmaceutical and biotechnology services. Therefore, the abovementioned reasons are anticipated to drive the Pharma analytical testing market.

Regional Analysis

By Region, the global pharmaceutical analytical testing market is segmented into North America, Europe, Asia Pacific, and LAMEA. 

North America accounted for the largest market share and is estimated to grow at a CAGR of 7.1% during the forecast period. In terms of R&D expenditures in analytical chemistry, pharmaceuticals, and life sciences, the United States is the global leader. Additionally, it is the biggest market for completed dosage formulations and bulk medications. As Pharmaceutical Analytical Testings are used extensively in drug discovery, cancer research, and clinical diagnostics, these industries' growth is expected to impact the market positively. Factors include:

• Increased cancer and infectious and chronic diseases.
• Investments by major companies.
• Higher amounts of product launches.

Pharmaceutical Research and Manufacturers of America (PhRMA) member businesses have been at the forefront of the discovery of new medications, and the American pharmaceutical sector continues to be one of the leaders in the world. According to Pharmaceutical Research and Manufacturers of America, the pharmaceutical industry invested an estimated USD 83 billion in research and development (R&D) in 2019. The FDA distributed six grants in 2020 to support fresh clinical investigations and advance the creation of pharmaceuticals for treating rare disorders. The demand for pharmaceutical analytical testing, which is heavily utilized during the drug discovery process, will increase.

Europe is the second largest region. It is estimated to reach an expected value of USD 3340 million by 2030, registering a CAGR of 7.6%. The German health care system provides patients access to technologically-advanced products and is a high-focus market for most diagnostic manufacturers. Factors such as high government investment and growing product launches are some growth factors driving the market studied. As per the Johns Hopkins University, around 3,708,898 confirmed cases of COVID-19 were reported in Germany, with about 89,249 deaths, as of June 6, 2021. This has led to a considerable increase in research, increasing the demand for pharmaceutical analytical testing.

Furthermore, the country observes high demand for bioanalytical services; as a result, companies have been adopting growth strategies, such as partnerships, acquisitions, and mergers, to grow their presence in this country. In October 2020, TherapeutAix, based in Germany, offered biotech consulting services partnered with Alderley Analytical, a contract research organization that provides bioanalytical services to support drug development programs. Thus, such developments are expected to fuel the market studied.

The Asia Pacific is the third largest region. China represents one of the major pharmaceutical industries in the Asia-Pacific Region. For instance, in 2019, as per the data published by the Medicines and Healthcare Products Regulatory Agency (MHRA), Chinese manufacturers make up around 40% of all APIs used worldwide. It is among the fast-growing nations and sources of many bioanalytical services performed across many cities. The country's low investment and high output excite the companies to benefit from this region and explore more into the Asia-Pacific region. Some significant factors affecting the pharmaceutical analytical testing market include increasing research and development expenditure and the rising number of clinical trials. According to the data provided on clinicaltrials.gov, as of April 2021, around 20,311 clinical studies are being performed in China. The rising research and development activities by pharma and biopharmaceutical companies are one of the critical trends in the escalating market growth in China. According to the National Bureau of Statistics, in 2019, China'sChina's total R&D expenditure was YUAN 2.214 trillion, an increase of YUAN 246.57 billion over the previous year. Thus, the growth in government funding related to research and drug discovery is triggering the overall market growth.

Segmental Analysis

The global pharmaceutical analytical testing market is segmented by service type and region. 

By Service Type, the global pharmaceutical analytical testing market is segmented into bioanalytical testing, method development and validation, stability testing, drug substances testing, and others. 

The bioanalytical testing segment accounted for the largest market share and is estimated to grow at a CAGR of 7.6% during the forecast period. Quantitative assessment of xenobiotics, such as small molecule medicines, their metabolites, and biological molecules, is done during bioanalytical testing. They are using bioanalytical testing services and developing and validating reliable bioanalytical techniques in body fluids and tissue samples. These tests support Preclinical and Phase I through Phase IV clinical trials. There are different bioanalytical tests such as Bioavailability and Bioequivalence Studies, Pharmacokinetics, Pharmacodynamics tests, etc. Market players are expanding their market position by offering various services, launching new methods for method development and assay validation, and offering laboratory solutions. For instance, In January 2021, Nexelis US-based immunology-focused CRO expanded its bioanalytic services by acquiring GSK's GCLP-certified clinical bioanalytical laboratory in Marburg, Germany. Thus, owing to the abovementioned factors, the bioanalytical testing segment is expected to grow significantly during the forecast period.

The method development and validation segment is the second largest. Key components of every pharmaceutical development program include the development and validation of analytical methods. This technical brief will concentrate on drug product development and validation activities. The advantage that well-developed analytical procedures can provide to a program's overall development time and cost-effectiveness is frequently overlooked since it is seen as ordinary. Method development is conducted to evaluate the ability to measure compounds of interest in the final solution of interest under actual use. Before any reachable quantitative assessment of the medicinal product, specific analytical methods need to be developed and validated. Method validation is recommended before performing any analytical study. The fundamental parameters for method validation are linear, accurate, precise, recovery, and selective for the analyte(s) of interest. Several research activities and conferences related to method development and validation will likely positively impact the market growth.

The stability testing segment is the third largest. Stability testing is used to assess whether different environmental conditions, such as light, temperature, and humidity, have the potential to change a drug substance's or drug product quality over time. Stability testing includes stability-indicating method validation, accelerated stability testing, photostability testing, and others. Photostability testing consists of two parts: forced degradation testing and confirmatory testing. Charles River Laboratories is one of the significant players that offers a Stability Testing Programme for pharmaceutical products, which includes Real-time and accelerated stability testing, forced degradation study, and long-term stability study. Testing the stability of the finished products is outsourced to developed countries like the United States, Germany, and the United Kingdom because of better resources and environmentally friendly nature for drug testing, accelerating the market growth.

Recent Developments

• August 2022 - Pace® Life Sciences, LLC, a full-service contract development and manufacturing organization (CDMO) and subsidiary of Pace® Science and Technology Company, announced today that it had acquired Meridian BioGroup (Meridian). Meridian specializes in bringing industry experts from regulatory affairs, quality, validation, and related backgrounds to meet its client's needs in FDA-regulated environments.
• July 2022 - The EPA has approved Pace® Analytical Method PAM-16130-SSI for the detection of Dioxins and Dibenzofurans through cutting-edge Gas Chromatography-Mass Spectrometry (GC-MS/MS), according to the company's division Pace® Analytical Services, which is the preferred provider of in-lab, mobile, and emergency onsite specialty-contaminant and regulatory testing and analysis services.