Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market Size, Share & Trends Analysis Report By Service Type (Drug Development Services, Pharmaceutical Manufacturing Services, Biologics Manufacturing Services, Packaging & Labelling Services, Fill-finish Services, Others), By Research Phase (Pre-clinical, Phase I, Phase II, Phase III, Phase IV), By End-User (Big Pharmaceutical Companies, Small & Mid-Sized Pharmaceutical Companies, Generic Pharmaceutical Companies, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2025-2033

Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market Size

The global pharmaceutical contract development and manufacturing organization (CDMO) market size was valued at USD 200.9 billion in 2024 and it is projected to reach from USD 214.69 billion in 2025 to USD 378.94 billion by 2033, exhibiting a CAGR of 6.9% during the forecast period (2025-2033).

Advanced manufacturing techniques and processes are set to drive growth in the global pharmaceutical CDMO market. CMOs are expected to enhance their manufacturing efficiency by adopting operational strategies like continuous manufacturing, which minimizes waste and reduces costs. The rise of small and mid-sized pharmaceutical firms, responsible for a growing share of new drug approvals but often lacking manufacturing capacity, is likely to propel CMOs to implement these new technologies.

Market growth is also fueled by the increasing complexity of drug development and the demand for cost-effective solutions. For instance, the WHO's 2022 study estimated that the cost to develop a new drug ranges from approximately USD 43.4 million to USD 4.2 billion. By outsourcing to CDMOs, companies can access specialized expertise and advanced manufacturing capabilities without incurring high overhead costs.

This approach allows them to concentrate on core activities, reduce financial risks, and enhance operational flexibility, further driving the growth of the CDMO market in the coming years.

Pharmaceutical Contract Development and Manufacturing Organization (CDMO) Market Trends

Increasing demand for biopharmaceuticals to treat rare diseases

The growing demand for biopharmaceuticals aimed at treating rare diseases is a significant market trend in the pharmaceutical CDMO market. Companies are increasingly focusing on specialized manufacturing capabilities, particularly in areas like exosome-based therapies. As these firms innovate and develop new treatments, they turn to CDMOs for essential services such as formulation development and manufacturing.

This reliance allows pharmaceutical companies to streamline their research and development processes, boost productivity, and accelerate drug development timelines, all while reducing costs and mitigating risks.

• For instance, in January 2024, EXO Biologics SA launched ExoXpert, a CDMO for the GMP production of exosomes, leveraging its proprietary ExoPulse manufacturing platform to meet the rising demand for exosomes to treat rare diseases with high unmet medical needs.

Shift towards sustainable practices

The pharmaceutical industry is increasingly emphasizing sustainability. CDMOs are adopting green chemistry practices and sustainable manufacturing processes to minimize their environmental impact.

• For instance, in May 2024, WuXi AppTec's Singapore facility aims to embrace industry-leading green chemistry technology initiatives.

Thus, this shift supports environmental goals, enhances operational efficiency, and aligns with the growing demand for eco-friendly drug development and manufacturing solutions.Bottom of Form

Market Growth Factors

Rising drug development complexity

The increasing complexity of drug development processes and regulatory requirements is compelling pharmaceutical companies to turn to contract development and manufacturing organizations (CDMOs) for expertise. As the pharmaceutical landscape evolves, there is a growing need for specialized knowledge to navigate intricate regulations and advanced manufacturing techniques.

Collaborating with CDMOs allows pharmaceutical firms to access cutting-edge technologies, ensure regulatory compliance, and streamline development timelines. This partnership not only reduces risks associated with in-house manufacturing but also enhances the efficiency of bringing new therapies to market, making CDMOs essential in the drug development process.

• For instance, the costs of in-house drug development are significant, particularly for small and mid-sized pharmaceutical firms that face significant financial pressures from technology investments and infrastructure maintenance.

Expansion of clinical trials

The rising number of clinical trials is driving the demand for pharmaceutical CDMO services, largely due to the increasing complexity of drug development. Pharmaceutical companies often lack the resources and expertise needed for manufacturing and regulatory compliance, making CDMOs essential partners.

Moreover, they offer specialized services such as formulation development, clinical trial material production, and quality assurance, enabling drug developers to accelerate timelines, reduce costs, and mitigate risks. This growing reliance on CDMOs contributes significantly to market growth.

• For instance, in 2023, ClinicalTrials.gov reported approximately 477,237 registered clinical studies, highlighting robust growth in clinical research. This surge underscores the essential role of CDMOs as partners, offering critical support in drug development processes.

Market Restraining Factors

Regulatory compliance challenges

The failure to comply with regulatory standards and produce quality pharmaceuticals can severely impact a CDMO's business and brand reputation. Adherence to regulations is crucial in the pharmaceutical industry, especially since CDMOs manufacture drug substances and formulations under their own brand.

The medication development and clinical trial processes require extensive data submission to regulatory authorities, which poses challenges in managing this data and filing diverse formulations across different countries. These complexities increase the risk of errors in regulatory submissions and are expected to hinder the growth of CDMOs in the foreseeable future.

Market Opportunities

Harnessing process automation

The integration of process automation offers a transformative opportunity for pharmaceutical CDMOs, driving efficiency and reliability in production. By adopting advanced software, sensors, and PLCs, CDMOs can streamline manufacturing processes, reduce human error, and enhance overall productivity.

• For instance, Pfizer’s adoption of automated monitoring systems in its COVID-19 vaccine production exemplifies how real-time data analysis and automated quality checks can quickly identify variances and halt production when necessary.

This not only ensures product quality but also reduces operational costs and accelerates timelines, making CDMOs more competitive in the supply chain.

Regional Insights

North america: dominant region with a 44.2% share in the market

North America dominates the global pharmaceutical contract development and manufacturing organization (CDMO) market. This leadership is driven by the presence of major pharmaceutical and biotechnology manufacturers, robust funding for biopharmaceutical R&D, and increasing demand for cell and gene therapies.

Moreover, drug shortage is a significant concern in the U.S., often resulting from delays, discontinuations, and manufacturing quality issues.

• For instance, in September 2023, the U.S. FDA reported 98 medicine shortages in 2023, up from 79 in 2021, leading many pharmaceutical companies to rely on CDMOs to help mitigate these shortages. Bottom of Form

Asia pacific: fastest growing region with the highest market cagr

The Asia Pacific region is expected to witness the fastest growth rate in the pharmaceutical CDMO market. This growth is driven by lower costs compared to the U.S. and other developed economies, alongside rising rates of chronic diseases such as diabetes and heart disease. This drives demand for the CDMO market by increasing the need for new drug development and specialized therapies.

This leads pharmaceutical companies to outsource R&D and manufacturing processes to CDMOs for their expertise and efficiency in delivering effective treatments.

• For instance, China reported over 180 million elderly citizens with chronic conditions, with significant economic impacts expected by 2030.

Additionally, the privatization of clinical trials is leading to increased research outsourcing in developing countries like China and India, as large pharmaceutical companies seek services such as clinical data management and pharmacovigilance.

Country insights

The pharmaceutical CDMO market is experiencing significant growth globally, driven by the increasing demand for outsourcing in drug development and manufacturing. Countries with robust pharmaceutical industries, favorable regulatory environments, and strong government support are emerging as key players in this sector.

These nations are leveraging advancements in technology and innovation to enhance production capabilities and efficiency, making them attractive destinations for pharmaceutical companies looking to streamline their operations.

Below is the analysis of key countries impacting the market:

• U.S.- The U.S. leads the pharmaceutical contract development and manufacturing organization market, driven by increased demand for outsourcing drug development and manufacturing processes. This sector is essential for enhancing efficiency and innovation in bringing new therapies to market. For instance, in 2022, the FDA’s Center for Drug Evaluation and Research (CDER) approved 37 novel drugs, demonstrating a strong commitment to innovation in drug therapy. As companies seek to expedite the development and manufacturing of these innovative therapies, they increasingly rely on CDMOs for their expertise in regulatory compliance, scalability, and efficient production processes.
• Canada- In Canada, in March 2023, the Canadian government allocated USD 59 million to the Canadian Critical Drug Initiative to promote drug research and commercialization. Such initiatives are expected to increase demand for pharmaceutical CDMOs to facilitate efficient manufacturing processes.
• India- India offers contract development and manufacturing organization (CDMO) services at significantly lower costs than developed nations, making it an attractive market for pharmaceutical companies. Government initiatives to enhance CDMO capabilities, coupled with a strong pool of scientific expertise, are expected to drive growth.Manufacturing in India is about 50% cheaper than in the U.S., and the country boasts the most FDA-approved manufacturing plants outside the U.S., providing a competitive advantage over China.
• China: Several CDMOs in China are proactively expanding their operations to boost production capabilities. For instance, in January 2024, WuXi STA expanded its manufacturing capacity by opening two new peptide manufacturing plants in Changzhou and Taixing, enhancing its regional production capabilities.
• Japan: To meet the rising demand in the biopharmaceutical sector, several manufacturers are improving their production capabilities. For instance, in December 2023, AGC Inc. expanded its biopharmaceutical CDMO capabilities at the AGC Yokohama Technical Center in Yokohama, Japan, strengthening its position in the biopharmaceutical market.
• Germany:In 2022, as per the World Health Organisation, Germany reported 11,082 clinical trials, accounting for 24% of the global total, driving growth in the pharmaceutical CDMO sector. This research volume boosts demand for specialized development and manufacturing services as companies seek partners to navigate regulations and streamline production.The concentration of trials also attracts investment in local CDMO facilities, enhancing capabilities in formulation, scale-up, and quality assurance, positioning them as key players in bringing new therapies to market efficiently.
• UK- The UK government is promoting the growth of the CDMO sector through various incentives. In March 2024, Lonza secured a USD 38.6 million grant to relocate its biologics site to Thames Valley Park near Reading. This funding, part of the Life Sciences Innovative Manufacturing Fund, will enhance Lonza's capacity for complex biopharmaceuticals at its new 400,000-square-foot facility, strengthening its presence in the UK market.

Segmentation Analysis

The global market is segmented into service type – CMO segment, research phase – CRO segment, and end-user.

By service type

The global pharmaceutical CDMO market is bifurcated into drug development services, pharmaceutical manufacturing services, biologics manufacturing services, packaging & labeling services, fill-finish services, and others.

The pharmaceutical manufacturing services segment dominates the pharmaceutical CDMO market, holding the largest market revenue. This is driven by demand for Active Pharmaceutical Ingredients (APIs) and final dosage forms (FDFs) like tablets and injectables. The rise of complex drug formulations and specialty pharmaceuticals fuels this growth, highlighting the industry's need for cost-effective, efficient manufacturing solutions.

• For instance, in May 2024, Eli Lilly announced a USD 5.3 billion investment to expand its manufacturing site in Lebanon, Indiana, bringing its total investment there to USD 9 billion. This expansion will enhance production capacity for Active Pharmaceutical Ingredients (APIs) used in its obesity and diabetes treatments, Zepbound and Mounjaro.

By the research phase

The global market is bifurcated into pre-clinical, phase I, phase II, phase III, and phase IV.

Phase III segment dominates the global market, holding the largest market revenue. This phase is crucial for large-scale testing of a drug's efficacy and safety, often determining regulatory approval. The significant investment and data requirements drive pharmaceutical companies to rely on CROs, making Phase III trials a key focus in drug development.

By end-user

The global market is bifurcated into big pharmaceutical companies, small & mid-sized pharmaceutical companies, generic pharmaceutical companies, and others.

The big pharmaceutical companies segment dominates the global market. These firms often struggle with the complexities of drug development and high-volume production, leading them to rely on CDMOs for specialized expertise and scalable manufacturing solutions. This partnership streamlines operations, reduces costs, and accelerates time-to-market, reinforcing the dominance of big pharmaceutical companies in the market.

Company Market Share

The pharmaceutical contract development and manufacturing organization (CDMO) market is witnessing robust growth, driven by the increasing demand for outsourcing pharmaceutical production and development services. This section offers valuable market insights into a diverse range of players, from established multinational corporations to emerging companies, each contributing to the industry's dynamic landscape.

WuXi Apptec: An emerging player

WuXi Apptec stands out as an emerging player in the pharmaceutical CDMO market. Established in 2000 and headquartered in Shanghai, WuXi Apptec rapidly expanded its service offerings and global reach. The company provides a comprehensive suite of services across the pharmaceutical value chain, including drug discovery, development, and manufacturing. Its strong emphasis on innovation and technology integration positions it as a key competitor in the fast-evolving biopharmaceutical landscape.

Recent developments at Valo Health include:

• In May 2023, WuXi AppTec commenced construction on a new 50-acre R&D and manufacturing site in Singapore's Tuas Biomedical Park. The facility will provide active pharmaceutical ingredient (API) R&D and manufacturing services, including small molecules, oligonucleotides, and peptides, to support global customers.

Analyst Opinion

As per our analyst, the global pharmaceutical CDMO industry has evolved significantly, driven by rising demand from pharma companies aiming to streamline operations and focus on drug discovery. Key innovations such as continuous manufacturing and digitalization are boosting efficiency and quality control. Sustainability is also a priority, with CDMOs increasingly adopting green practices to reduce environmental impact.

Moreover, the growth of small and mid-sized biotech firms presents new opportunities, as these companies often require external manufacturing expertise to scale production, positioning CDMOs as crucial partners in the pharmaceutical landscape.

Recent Developments

• February 2024 - Catalent Inc. announced a merger agreement with Novo Holdings, wherein Novo Holdings will acquire Catalent for an all-cash transaction valued at USD 16.5 billion.
• February 2024 - Recipharm, a contract development and manufacturing organization, entered into an exclusive licensing and collaboration agreement with Medspray and Resyca to develop soft mist nasal delivery devices for both single and combination pharmaceutical products.