Healthcare CMO Market Research 2024-2029: Escalating Demand for Generic Drugs, Expansion in Cell and Gene Therapy, Exploration of Alternative Expression Systems - ResearchAndMarkets.com

The "Global Healthcare CMO Market: Analysis By Type, Region Size, Trends and Forecast up to 2029" report has been added to ResearchAndMarkets.com's offering.

The global healthcare CMO market was valued at US$145.83 billion in 2023, and is predicted to grow to US$291.25 billion in 2029. The global healthcare CMO market is determined to grow at a CAGR of 12.22% over the forecasted period of 2024-2029.

The healthcare CMO market has experienced significant growth over the years primarily due to the increasing demand for pharmaceutical and biopharmaceutical products, spurred by the rising prevalence of chronic diseases and the aging global population. Also, the trend of pharmaceutical companies outsourcing manufacturing to CMOs to reduce costs and focus on core competencies has contributed significantly to market expansion.

Advancements in manufacturing technologies and processes have also enabled CMOs to offer high-quality, scalable, and cost-effective production solutions. Other significant trends include escalating role of artificial intelligence technology, personalized medicine, sustainability and green manufacturing, advanced manufacturing technologies, expansion in cell and gene therapy etc.

These major players have been implementing novel strategies to expand market prospects in the coming years. On July 11, 2023, Recipharm Opens New Analytical Laboratory in Bangalore, India, to Increase Global Testing Capabilities for Nitrosamines, Extractables, Leachables, and Elemental Impurity Testing. 5,000 Sq Ft. Laboratory would support Recipharm's existing analytical capacity to support biotech and pharma customers in the Research and Development of Oral Solids, Drug Delivery, Inhalation, Vaccine, and Injectables with Full cGMP Compliance.

The market in North America is being driven by the region's increased emphasis on drug discovery and manufacturing outsourcing. The region is increasing its use of scientific exploration of disease mechanisms leading to the discovery and development of agents. Pre-clinical testing is an important stage in pharmaceutical research. At this stage, several tests are performed to determine whether a drug is ready for clinical trials.

Asia Pacific is predicted to grow at a significantly high rate during the forecasted period because the region offers substantial cost advantages, including lower labor and operational costs, making it an attractive hub for manufacturing activities. Many countries in Asia Pacific, such as China and India, have invested heavily in developing their pharmaceutical and biotechnology infrastructure, providing state-of-the-art facilities and expertise.

Secondly, the region has a large and growing population, increasing the demand for healthcare services and pharmaceutical products. This demographic shift is driving local and international pharmaceutical companies to expand their presence in Asia Pacific. Additionally, supportive government policies, including favorable regulations and incentives for foreign investment, have created a conducive environment for the growth of CMOs.

Market Segmentation Analysis

The pharmaceuticals manufacturing segment acquired majority of share in the market in 2023 and is expected to grow at the fastest rate in the market during the forecast period, owing to increasing prevalence of chronic diseases and the rising global demand for complex drugs has driven pharmaceutical companies to outsource manufacturing to CMOs. Additionally, the surge in the development of complex biologics, personalized medicines, and specialty drugs necessitates advanced manufacturing capabilities, which many CMOs possess.

Further, the ongoing advancements in pharmaceutical manufacturing technologies, coupled with the trend towards outsourcing, are expected to sustain and accelerate the growth of the pharmaceuticals manufacturing segment in the healthcare CMO market. Pharmaceutical CMO segment is further divided into two segments on the basis of service: Active Pharmaceutical Ingredients (API) and Others.

Impact Analysis of COVID-19 and Way Forward

The COVID-19 pandemic had a positive demand shock, attributable to the increasing number of biopharmaceutical services provided to CMOs. CMOs invested in and acquired facilities in order to be ready for high-volume production units. This pandemic has proven to be an era of exponential growth in facility and bioprocessing units to have a higher output for increased and continuous supply.

Vaccine development and manufacturing activity in the healthcare CMO market has increased during pandemic, owing primarily to the industry's response to the COVID-19 pandemic. This expansion is expected to continue in the coming years as well. CMOs have made capacity and resource investments to address supply chain challenges. The CMO industry has seen an increase in modular construction and expansion, investments in cutting-edge technology, and process intensification strategies. Furthermore, many CMOs expanded their capabilities in new modalities such as [messenger RNA] mRNA and cell and gene therapy, which would drive the growth of the market during the post COVID period.

Competitive Landscape

Global healthcare CMO market is fragmented. There is a wide array of CMOs ranging from large multinational corporations to small and mid-sized firms specializing in niche areas or regional markets. The key players in the healthcare CMO market provides a detailed competitive landscape and focus on launching novel products with the necessary approvals. There is a continuing need for research and development, which is still a key strategy among market players.

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