The global healthcare contract manufacturing market refers to the industry that involves the outsourcing of pharmaceutical, biopharmaceutical, medical devices, and diagnostics manufacturing activities to product development firms that specialize in contract manufacturing. The process, comprising of services such as drug formulation,
API synthesis, product development, manufacturing, packaging, labeling, and distribution, is called outsourced services by healthcare companies to third parties.
This market predominantly serves the pharmaceutical industry where companies such as biotechnology, medical device manufacturers, & diagnostic firms need the services provided by CMOs in order to improve their manufacturing processes to meet their requirements. In addition to this, the companies also reduce their costs and improve the quickness of development and marketability of their products; therefore, the market is growing and developing rapidly.
Key Takeaways
- The Global Healthcare Contract Manufacturing Market size is estimated to have a value of USD 299.0 billion in 2024.
- The market is growing at a CAGR of 9.4 percent over the forecasted period of 2024 to 2033.
- North America is expected to have the largest market share for the Global Healthcare Contract Manufacturing Market with a share of about 38.2% in 2024.
- Pharmaceuticals are expected to dominate the type segment in 2024 as they hold 58.1% of the market share.
- Class II is projected to dominate the global healthcare contract manufacturing market as it is further anticipated to command the highest market share in 2024.
- Pharmaceutical and biopharmaceutical companies are projected to dominate the end-user segment as they hold 57.9% of the market share in 2024.
Use Cases
- Such market supports pharmaceutical companies through contracting the development and manufacturing of oral solid Dosage forms.
- Biologics CMOs are there to provide product services like cell line development, upstream and downstream processing, and purifying processes supporting biologic drug product manufacture.
- This market helps pharmaceutical firms to achieve better drug delivery technologies, bioavailability, and compliance in using it.
- Contract packaging organizations (CPOs) provide packaging and labeling services for pharmaceuticals, biopharmaceuticals, and medical devices.
Recent Development
- In July 2023, Kidd & Company sells NextPhase Medical Devices to Arterex, a contract manufacturer, for undisclosed terms, facilitating NextPhase's growth.
- In May 2023, Baxter International sells BioPharma Solutions to Advent International and Warburg Pincus for $4.25 billion, streamlining focus and intending to repay debt.
- In February 2023, Lonza has recently unveiled plans for the expansion of its bioconjugation facility situated in Switzerland. This development marks a substantial broadening of its market.
- In November 2022, Taiwan's MedTech contract manufacturer, Medeologix, acquired three medical device firms, fortifying its design and development strengths, solidifying its status as a leading contract manufacturer.
Market Dynamic
The healthcare industry contract manufacturing is exposed to different market forces that bring forth various market trends affecting its competitive position and growth pattern. The pharmaceutical and medical device producers continue with outsourcing as a way of operational downsizing and core competency merging. Technological advancements improve productivity and quality, which, in turn, support CMOs in integrating innovations into their portfolios. As the demand for biologics worldwide increases and biosimilars gain market share, the industry creates a space for CMOs who have expertise in biologics.
Globalization of this market pushes major players to look for efficient ways to cut costs and attract more customers leading to the growth of those with significant global presence and unique skills. There have been many consolidations through mergers and acquisitions as well as strategies like partnerships which have enabled CMOs to grow services and market reach. Nowadays, the alliance between pharma companies and CMOs in strategic collaboration is a common tendency, allowing two parties to utilize each other’s forces simultaneously.
Research Scope and Analysis
By Type
Pharmaceuticals are expected to dominate the type segment in 2024 as they hold 58.1% of the market share. Pharmaceutical contract manufacturing organizations (CMOs) hold a key position in the industry for the reason that they share professional skills in complex manufacturing processes, achieving precise formulation, API synthesis, and quality control. They do not create a range of products, but they offer a comprehensive package of services from pre-clinical drug development to commercialization of different dosage forms.
Spreading out with subsidiary and affiliate offices that offer scalable capacity and world-class technologies, the CMOs support market expansion and supply chain challenges effectively. Relentless innovation and agility lend CMOs to personalize solutions, which speedily advance product development and manufacturing improvements in partnership with pharmaceutical companies.
By Class
Class II is projected to dominate the global healthcare contract manufacturing market as it is further anticipated to command the highest market share in 2024. The contract manufacturing market for healthcare primarily focuses on Class II medical devices for various reasons. Their larger number and the diversity in the products covered by them push up requests for these devices in comparison with Class I or III ones. While there are regulatory requirements, they are less stringent. The FDA's 510(k) process offers a more straightforward path for compliance. The manufacturing complexity level for Class II devices is medium, and it frequently includes assembly and packaging which make them more appealing for contract manufacturers.
Moreover, Class II devices are often grouped with other electronic medical devices, which means that the manufacturer may need to be proficient in electronics and software integration in addition to the medical devices application, therefore, boosting the need for contract manufacturing services for this segment. Therefore, a number of these factors make Class II devices a major area of attention in the field of medical device contract manufacturing in the healthcare sector.
By End User
Pharmaceutical and biopharmaceutical companies are projected to dominate the end-user segment as they hold 57.9% of the market share in 2024. Pharmaceutical and biotechnology companies stand tall in healthcare contract manufacturing on account of several factors. Firstly, several challenges associated with the production of pharmaceuticals require highly specialized knowledge and sophisticated infrastructure, which CDMOs offer.
In addition, manufacturing facilities can be established cheaply since firms can outsource these services, thus allowing them to allocate funds toward more productive operations. The third point is that contract manufacturing gives the ability to flexibly manage and change the production capacity as to optimize the costs and reactivity to the market.
Moreover, having access to specialized expertise and risk reduction through collaboration and working hand in hand with reputable CDMOs gives pharmaceutical companies’ much-needed strength. In addition, contract manufacturing enables global expansion and market penetration, providing access to foreign facilities and successful navigation of regulatory requirements in foreign territories.
The Healthcare Contract Manufacturing Market Report is segmented on the basis of the following
By Type
o API/Bulk Drugs
o Advanced drug delivery formulations
o Packaging
o Finished dose formulations
Solid
Liquid
Semi-solid formulations
o Service
Accessories manufacturing
Assembly manufacturing
Component manufacturing
Device manufacturing
o Device manufacturing
Cardiology
Diagnostic imaging
Orthopedic
IVD
Ophthalmic
General & plastic surgery
Drug delivery
Dental
Endoscopy
Diabetes care
Others
By Class
- Class I
- Class II
- Class III
By End-use
- Pharmaceutical & Biopharmaceutical Companies
- Medical Device Companies
- Others
Regional Analysis
North America is expected to dominate this market as it is further anticipated to
hold 38.2% of market share by 2024 as the existing pharmaceutical and biotech industry in North America attracts contract manufacturing services, as companies require specialized skill set, cost-effectiveness, and faster market access. We need to pay attention to regulatory compliance in this region, as FDA in the U.S. and Health Canada, like other regulatory authorities, have high standards and they ensure the product quality and safety.
Also, North America benefit from being in close proximity to technology hubs such as leading academic institutions and biotech clusters, which promote collaboration and ease technology adoption in manufacturing processes.A well-trained workforce in addition to this will strengthen North America’s position, the experts in pharmaceutical and medical device manufacturing being able to address advanced projects. An aging population as well as increasing healthcare costs will be the main facilitating demand factors for contract manufacturing services.
Similarly, strategic partnerships and purchases have greatly contributed to the businesses' capability to further expand the offering and geography by providing customers an all-inclusive solution.
By Region
North America
Europe
- Germany
- The U.K.
- France
- Italy
- Russia
- Spain
- Benelux
- Nordic
- Rest of Europe
Asia-Pacific
- China
- Japan
- South Korea
- India
- ANZ
- ASEAN
- Rest of Asia-Pacific
Latin America
- Brazil
- Mexico
- Argentina
- Colombia
- Rest of Latin America
Middle East & Africa
- Saudi Arabia
- UAE
- South Africa
- Israel
- Egypt
- Rest of MEA
Competitive Landscape
This market is influenced by variety of factor that pushes and restricts the growth of this market as well as the companies that are involved in this market. The growth of this market is influenced by numerous factors such as the ever-increasing demand for pharmaceuticals, medical devices as well as diagnostics, and also the increased tendency of manufacturers to outsource their operations. Competition in this market is determined by a group of major players who provide contract manufacturing for drugs, biopharmaceuticals, medical devices, and diagnostics. These are only a few examples of CMOs, besides anyone else, that are competing in the space of healthcare product manufacturing. Other participants include niche CDMOs and specialized service providers.
The market has high levels of competition, technology innovations, and strategic partnerships in the process of increasing service offerings and market shares. As the demand for outsourcing manufacturing services shows signs of further growth, the dynamics will keep heating up in this competitive market with organizations trying to outmaneuver others by becoming more innovative and competitive, providing greater quality and flexibility.
Some of the prominent players in the Global Healthcare Contract Manufacturing Market are:
- Thermo Fisher Scientific Inc.
- Recipharm AB
- Boehringer Ingelheim International GmbH
- Lonza
- Samsung Biologics
- WuXi AppTec
- FUJIFILM Diosynth Biotechnologies
- Cambrex Corporation
- Nordson Corporation
- Integer Holdings Corporation
- West Pharmaceutical Services, Inc.
- Synecco Ltd
- Catalent, Inc.
- Other Key Players