The global pharmaceutical contract packaging market size was valued at USD 13.02 billion in 2021. It is projected to reach USD 31.21 billion by 2030, growing at a CAGR of 10.2% during the forecast period (2022-2030).
Drugs must be packaged safely after manufacture to provide patients with the best pharmacological effects. Drug labeling and packing are two secondary tasks that pharmaceutical corporations outsource worldwide to contract businesses. Additionally, these businesses offer ancillary services such as the assembly and secondary packaging of vials, auto-injectors, and prefilled syringes. Global demand for pharmaceutical contract packaging is rising due to its relative flexibility, profitability, and ability to keep up with the changing market environment.
In response to concerns about the purity of medicines, more than 40 countries have already implemented track-and-trace regulations to help regulate the product as it moves through the supply chain. Around 75% of prescription drugs worldwide are covered by legal protection. Since no two nations have met the same standards, they rely on serialization, a technique for assigning specific and traceable numbers to individual sellable units. The effects of serialization may be seen across the industry's supply chain, and operations at pharmaceutical businesses and their partners in contract manufacturing and packaging are changing.
The US Drug Quality and Security Act (DQSA), enacted into law in 2013 to reduce the prevalence of counterfeit drugs, created an electronic system to identify and trace prescription pharmaceuticals as they are manufactured and dispensed. Due to the increased requirement for specialized equipment, log keeping, data administration, and government compliance, firms worldwide are now turning to contract packaging services to maintain their complicated packaging processes. A significant component of the DSCSA regulations is tracking unit movement from the manufacturer to the final consumer. The expertise and simplicity of compliance services offered by these suppliers increase the desire to bring CPOs on board the production and packaging process.
The investments in capacity expansions and bottling and filling services are rising with the increased emphasis on developing new drugs and the availability of vials in the market. Pharmaceutical companies are increasingly concentrating on their resources and outsourcing the rest of the work to specialist companies. In Cookeville, Tennessee, Aphena Pharma Solutions invests USD 21 million to grow its Solid Dose Division. A 500,000-square-foot building explicitly created for FDA manufacturing and packaging operations is part of the project. With the installation of 10 high-speed bottling lines to begin for solid-based products such as tablets, capsules, caplets, soft gels, and gel caps, the company's capacity for bottle packaging has increased. Additionally, the business intends to add 30 more high-speed lines to the new building, expanding the facility's monthly capacity to over 80 million bottles.
Pharmaceutical manufacturers must follow GMPs (Good Manufacturing Practices) in accordance with EU regulations to supply goods to the EU. Manufacturers and importers must then be authorized and registered by a competent body from a member state. An EU competent authority or authorized entity conducts routine inspections of manufacturers and importers to verify compliance with the EU GMP. This process can be used wherever the manufacturer is located. When a different company imports goods, it is the importer's responsibility to ensure GMP adherence. The document "The Rules Controlling Medicinal Items in the European Union" compiles the EU legislation governing pharmaceutical products.
Filling bottles is an essential step in the primary packaging of medications. Numerous pharmaceutical firms rely on bottle-filling services provided by contract packaging firms, constituting a sizable portion of the market under review. As a result of its many benefits, such as its low weight, which reduces logistics costs and makes shipping more cost-effective, plastic bottle filling is likely to experience rapid expansion over the projection period. Plastic bottles are more durable than glass ones and can assist reduce the high price of broken glass while storing medications. Contract packaging firms are actively expanding their businesses by investing in new bottling lines, allowing them to fill more medications daily.
The global pharmaceutical contract packaging market is segmented by service.
Based on Service, the global pharmaceutical contract packaging market is bifurcated into primary, secondary, and tertiary.
The primary segment is the highest market shareholder and is expected to grow at a CAGR of 10.1% during the forecast period. Filling the bottles is a primary step in the initial packaging of medications in bottles. Pharmaceutical businesses can concentrate on the research and development of new drugs and getting them licensed and approved by regulatory bodies like the Food and Drug Administration because outsourcing bottling services are so simple. Plastic bottle filling is anticipated to experience considerable growth over the projection period due to its many benefits, including lightweight, which further reduces space and transportation costs and freight costs. The need for contract vial packing skyrocketed as the supply chain for developing new drugs became more intricate.
Due to the enormously high demand for vaccines, the COVID-19 pandemic has significantly increased vial manufacturing. Due to the complexity of conditions like diabetes that require self-injecting medications, borosilicate glass vials are predicted to hold a sizable market share throughout the projection period. The widespread need for medicine delivery in children, for whom swallowing pills and capsules can create problems, drives the use of ampoules. Ampoules' increased use has positively impacted the need for their packaging, which has expanded for contracting mainly due to the vials' delicate nature. Additionally, contract packaging of ampoules is more economical than the time-consuming packaging method, which supports the expansion of the research section.
Pre-packed goods can be packaged using kitting, bundling, and sealing as part of the secondary contract packaging services, also referred to as secondary co-packing services. Standard secondary packaging includes folding cartons, cardboard boxes, cardboard/plastic crates, and corrugated containers. The need for physical and barrier protection, secondary containment, adherence to regulations, and safety has increased the use of secondary pharmaceutical packaging. Furthermore, secondary packaging is necessary to deliver medications to the point of sale. Since the consumer first sees the secondary pharmaceutical packaging, which contains a level of the packaging, secondary packaging is of utmost importance. As a result, the market participants are compelled to outsource the packaging to make their products more appealing to consumers and boost their customer base.
The global pharmaceutical contract packaging market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.
North America is the most significant shareholder in the global pharmaceutical contract packaging market and is expected to grow at a CAGR of 9.6% during the forecast period. The demand for sustainable contract packaging in the pharmaceutical business has been sparked by the market for pharmaceutical contract packaging in North America, which is quickly expanding the use of various packaging techniques to fulfill the demands of shifting customer preferences. Additionally, the increasing use of automation in pharmaceutical contract packaging has reduced the likelihood of human handling errors, spurring regional market expansion.
In addition, rising consumer health consciousness and higher disposable incomes fuel the region's need for pharmaceutical contract packaging. The need for contract packaging in the area is favorably impacted by rising demand, manufacturing companies' shifting preferences toward contract packagers, and the U.S. government's implementation of numerous rules and regulations on the labeling and packaging of pharmaceutical medications. Pharmaceutical firms can focus more on their core skills by using contract packing. As a result, it is anticipated that increasing R&D spending in the pharmaceutical sector will fuel the expansion of the global pharmaceutical contract market. Many contract packaging businesses have invested in growing their facilities, clientele, and geographic reach through partnerships and acquisitions. CPOs supplying the North American market are expected to abide by the region's strict packaging rules, ranking among the world's most challenging.
Europe is expected to grow at a CAGR of 10.8%, generating USD 10.55 billion during the forecast period. In order to accommodate the unique requirements of Europe's expanding population, the pharmaceutical packaging sector is implementing innovative technology. To be competitive in the expanding industry, contract packaging companies are implementing these technological developments. The e-commerce sector, increased use of sustainable materials, and incorporation of innovative technology drove expansion in the pharmaceutical contract packaging sector. Pharma vendors must abide by some of the most strict laws on pharmaceutical packaging in the EU, and CPOs also aid in compliance with packaging standards. According to European Child Safety Alliance research, over 3,000 children under the age of 14 pass away from acute poisoning each year, making it imperative to improve the safety of child-resistant packaging. To be considered child-resistant in Europe, packaging must adhere to the EN 14375:2018 standard.
As more individuals in the Asia-Pacific area have access to both Western medicine, which is produced in massive quantities, and Traditional Chinese Medicine (TCM), there are enormous prospects in the Chinese pharmaceutical sector. China has developed into the most significant market for high-speed blister packaging for the same reason. Additionally, China has emerged as one of the most desirable nations for outsourcing. With this, co-packing services are growing domestically as more and more vendors enter the market. The country has eclipsed India as the leader in producing APIs and bulk medicinal ingredients. While the development of APIs is a booming industry in China, most contract manufacturing organizations (CMOs) in the country are limited to producing oral liquid or solid dosage forms. The demand for primary, secondary, and tertiary co-packing services, including blister packaging, plastic containers, labeling, and others, for the major pharmaceutical corporations in the nation is anticipated to rise as a result. To join a global network of co-packers and provide a wide range of customers, vendors in the market are also strategically focusing on entering the Contract Packers Association.
Since Mexico is a member of the North American Free Trade Agreement, it now has access to the developed and developing pharmaceutical markets in North and Latin America. The Mexican industry is seeing an upsurge in demand for pharmaceutical outsourcing packaging. The need for specialized manufacturing grows as treatments and medications develop and become more specialized. Due to the difficulty of a few pharmaceutical companies in the area to have an internal packaging facility, the need for contract packaging in the region increased.
Primary reasons contributing to the expansion of the pharmaceutical industry in this region include a general increase in living standards, an increase in the aging population, and the efforts of numerous governments to improve their healthcare systems. The UAE's pharmaceutical and healthcare industries are expanding quickly due to a new mandate that all inhabitants have health insurance. The UAE government encourages local producers to produce domestically and supply the expanding market with comparable drugs at reasonable prices.
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