The global biotechnology & pharmaceutical services outsourcing market size was valued at USD 67.49 Billion in 2022 and is likely to reach USD 105.60 Billion by 2031, expanding at a CAGR of 5.1% during the forecast period, 2023-2031. The market is driven by the increasing price pressure and low-cost service offered by Contract Research Organizations (CROs) and Contract Manufacturing Organizations (CMOs).
Growing competition in the industry and attractive cost-saving benefits offered by CROs and CMOs are key factors propelling the growth of the market. Pharmaceutical organizations outsource research & development activities of drugs & treatments at an exponential rate, through private and academic CROs, as their main strategy to become competitive in this unstable economic environment.
Several companies in the market are opting for outsourcing all the activities excluding the marketing, finance, and supply chain. Numerous pharmaceutical and biotechnology firms are willing to outsource research and development tasks that include a wide variety of activities from introductory & basic research to late-stage development.
These outsourceable activities involve genetic engineering, assay development, efficacy & safety tests on animal models, clinical trials that involve humans, target validation, and lead optimization plus hit exploration using candidates as a service. For instance,
- In February 2023, Lonza, a pharmaceutical company, set up its bioconjugation facilities in Visp, Switzerland. This expansion improves the company’s production capacity and development of pre-clinical to commercial scale supply and helps in meeting the high demand for bioconjugates.
Thus, the rising focus on research and development of a new drug is providing potential growth opportunities for outsourcing service providers in the market.
The research report finds that the COVID-19 pandemic had significantly affected biotech and pharma services outsourcing, owing to the social distancing and travel restrictions. These regulations created hurdles for the clinical trials and other services provided by the CROs.
However, the shift began when the hospital, government authorities, and administration bodies decided to increase their investments and funding to the CROs to focus their resources and activities on the development of the COVID-19 vaccine.
Pharmaceutical companies played a crucial role in the supply chain management of the vaccine. Along with this, a further rise in investment by the pharmaceutical & biotech firms in artificial intelligence (AI) & machine learning (ML) use for the development of medicines and treatments has emerged as a major reason for boosting the biotechnology and pharmaceutical services outsourcing market.
Biotechnology & Pharmaceutical Services Outsourcing Market Dynamics
Major Drivers
New product launches and novel drug delivery mechanism is anticipated to fuel the market in the coming years. Product launches lead to the demand for formulation development outsourcing, which determines the patentability and lifecycle of the product.
Major changes are being implemented for the drug approval process by their respective regional administration bodies, making it more lenient and swifter. Such modifications in the approval processes are likely to fuel the market. For instance,
- In December 2016, the Century Cures bill was passed to boost the launch of medical devices and breakthrough drugs in the US. This law helps incorporate the patient's perspective into developing drugs, biological devices, and products in the FDA's decision-making process.
Existing Restraints
High maintenance cost for assuring quality services from CROs is anticipated to hinder market growth. This factor makes it difficult for CROs and CMOs to function in developing countries such as India, South Africa, and Brazil where there is limited healthcare infrastructure.
Lack of standardization in biotechnology & pharmaceutical services outsourcing, which does not necessarily comply with international regulatory requirements, can lead to quality issues. This is expected to restrict the market expansion in the coming years.
Emerging Opportunities
Significant investments in research and development and technological advancement are expected to offer lucrative opportunities for the market players. Pharmaceutical companies are focusing on R&D, increasing overall spending on research activities to develop novel drugs and treatments for various diseases. Moreover, small-sized enterprises have less revenue generation, they invest great amounts of their budget in R&D activities.
Researchers and scientists are developing and adopting advanced diagnostic techniques such as customized care that can shorten any product’s life cycle, leading to the rapid development of the latest drug products and derivatives. For instance,
- In August 2022, Porton Advanced Solutions Cell and Gene Therapy (CGT) CDMO, raised up to USD 80 million to advance the cell and gene therapy platform. This platform offers oncolytic virus, nucleic acid therapy, plasmids, microbial vectors, and cell therapy used for gene therapy.
Scope of Biotechnology & Pharmaceutical Services Outsourcing Report
The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes
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Details
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Report Title
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Biotechnology & Pharmaceutical Services Outsourcing Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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Service (Consulting [Regulatory Compliance, Remediation, Quality Management Systems Consulting, and Others], Regulatory Affairs [Clinical Trial Applications & Product Registration, Regulatory Writing & Publishing, Legal Representation, and Others], Auditing & Assessment, Product Maintenance, Product Design & Development, Product Testing & Validation, Training & Education, and Others) and End-user (Pharma and Biotech)
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Regional Scope
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Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, Market Trends, and Revenue Forecast
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Key Players Covered in the Report
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NSF International; The Quantic Group; IQVIA; PAREXEL International Corporation; Lachman Consultant Services Inc; GMP Pharmaceuticals Pvt Ltd; Concept Heidelberg GmbH; Covance Inc; Charles River Laboratories; PRA Health Sciences; and ICON plc
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Biotechnology & Pharmaceutical Services Outsourcing Market Segment Insights
Services Segment Analysis
Based on services, the market is divided into consulting, auditing & assessment, regulatory affairs, product maintenance, product design & development, product testing & validation, training & education, and others.
The consulting segment is further divided into regulatory compliance, remediation, quality management systems consulting, and others. The regulatory affairs segment is again divided into clinical trial applications & product registration, regulatory writing & publishing, legal representation, and others.
The consulting segment is expected to constitute a major market share during the forecast period, owing to the increasing merger & acquisition activities, with respect to the constant change of regular protocols.
Consulting activities including the upgradation of quality genetic drugs, improving transparency and quality in the approval and review processes, and removing backlogs in certain drug applications go through significant development.
The others segment is anticipated to grow rapidly during this forecast period, due to the increasing outsourcing of newer developments and projects such as biosimilar and genetics manufacturing, contract manufacturing, IT consulting, and product upgrade. Biotechnology and pharmaceutical companies are outsourcing biostatistics to compete in clinical trial complexity, product commercialization, and the quality of clinical trials.
End-user Segment Analysis
Based on end-user, the global biotechnology & pharmaceutical services outsourcing market is bifurcated into pharma and biotech. The pharma segment is expected to constitute a major market share during the forecast period, owing to the increasing demand for contract service providers.
These providers are recognized to be effective in every strategic decision that the pharmaceutical firms decide to limit the shortfall of the drugs issue.
Pharmaceutical companies benefit from these courses of action and thereby have the highest CAGR in this market. Moreover, the biotech segment is likely to hold a considerable market share, due to the rapid growth in biotech product pipelines. Biotechnology firms are responsible for the clinical development of novel medicines and are responsible for propelling expansion and innovation.
Regional Analysis
On the basis of region, the global biotechnology & pharmaceutical services outsourcing market is categorized as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa.
North America is expected to dominate the market, owing to the growing research & development expenditure along with the rising adoption of the latest technology in the region. The demand for biotechnology & pharmaceutical outsourcing services is increasing rapidly in the region due to the increasing prevalence of chronic diseases.
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In 2018, as per the Centre for Disease Control and Prevention, 51.8% (129 million) of adults had been diagnosed with chronic conditions, while 24.6% (61 million) of adults had 1 chronic condition and 27.2% (68 million) had ≥2 chronic conditions.
The market in Asia Pacific is anticipated to expand at a significant CAGR during the forecast period, due to the rising investments by several regulatory reforms in clinical trial evaluation to align with the global standards. The availability of a skilled workforce and the low cost of drug development & manufacturing is expected to further fuel the market during the forecast period.
Segments
The global biotechnology & pharmaceutical services outsourcing market size has been segmented in terms of
Service
- Consulting
- Regulatory Compliance
- Remediation
- Quality Management Systems Consulting
- Others
- Regulatory Affairs
- Clinical Trial Applications & Product Registration
- Regulatory Writing & Publishing
- Legal Representation
- Others
- Auditing & Assessment
- Product Maintenance
- Product Design & Development
- Product Testing & Validation
- Training & Education
- Others
End-user
Region
- Asia Pacific
- North America
- Latin America
- Europe
- Middle East & Africa
Key Players
- NSF International
- The Quantic Group
- IQVIA
- Lachman Consultant Services Inc
- PAREXEL International Corporation
- GMP Pharmaceuticals Pvt Ltd
- Concept Heidelberg GmbH
- Covance Inc
- Charles River Laboratories
- PRA Health Sciences
- ICON plc
Competitive Landscape
Major players competing in the global biotechnology & pharmaceutical services outsourcing market are NSF International; The Quantic Group; IQVIA; PAREXEL International Corporation; Lachman Consultant Services Inc; GMP Pharmaceuticals Pvt Ltd; Concept Heidelberg GmbH; Covance Inc; Charles River Laboratories; PRA Health Sciences; and ICON plc.
Some of the market players are involved in several business strategies such as mergers, acquisitions, partnerships, collaborations, capacity expansion, and product launches to enhance their market shares. With outsourced pharmaceutical services, a pharma company can focus more on expediting drug trial and approval processes, to make the novel drugs speedily available in the market.
Such a focused approach enables the company in gaining a considerable edge over the competitors in the market. For instance,
- In May 2023, Vetter a global contract development and manufacturing organization, announced the expansion of its production capacity and services at its Rankweil, Austria site. The company is expected to implement additional equipment including an autoclave and freezers for aseptic productions and expand its storage capacity at the clinical site.
- In February 2017, NSF International established a collaboration with the IDMA (Indian Drug Manufacturers Association) for a period of five years involving the education of Pharmaceutical Quality Management or the PQM in India.
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