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Global Healthcare CMO Market: Analysis By Type, By Region, Size and Trends with Impact of COVID-19 and Forecast up to 2027

Global Healthcare CMO Market: Analysis By Type, By Region, Size and Trends with Impact of COVID-19 and Forecast up to 2027

  • October 2022
  • 140 pages
  • ID: 6351425
  • Format: PDF
  • Daedal Research


Table of Contents

The global healthcare CMO market was valued at US$115.90 billion in 2021, and is predicted to grow to US$230.24 billion in 2027. Healthcare CMOs, or healthcare contract manufacturing organizations, are companies that provide comprehensive services such as drug development and manufacturing for a set period of time under a legal contract.

In the healthcare industry, a Contract Manufacturing Organization (CMO) provides services to pharmaceutical companies, hospitals, and others. Pre-formulation, formulation development, stability studies, method development, pre-clinical and Phase I clinical trial materials, and late-stage clinical trial materials are among the services provided. The global healthcare CMO market is determined to grow at a CAGR of 12.12% over the forecasted period of 2022-2027.

Market Segmentation Analysis:

By Type: The report identifies two segments on the basis of type: Pharmaceutical and Medical Device. Pharmaceutical CMO segment is further divided into two segment on the basis of service: Active Pharmaceutical Ingredients (API) and Others. The device manufacturing segment is expected to grow at the fastest rate in the market during the forecast period, with a CAGR of 13%, owing to increasing outsourcing of device manufacturing due to a lack of in-house manufacturing facilities and complexity. CMOs have quality management systems, assembly, integration and testing capabilities besides supply chain management, experienced manufacturers have systems in place to quickly partner with health care organizations during the fotrecasted period.

By Region: In the report, the global healthcare CMO market is divided into four regions: North America, Europe, Asia Pacific, and ROW. North America accounted for the maximum share of more than 37% of the global market in 2021. 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. The governments in various countries in this region are placing large contracts with local CMOs to speed up the production of life supporting devices like ventilators to counter the COVID-19 pandemic. Medical devices like ventilator therefore become more important for providing life support to patients. Therefore, collaboration of authorities with CMOs would lead to increase in production of ventilators, this would bolster the growth of the market during the forecasted years.

Market Dynamics:

Growth Drivers: One of the key drivers of the market’s expansion is the growing inclination towards herbal products. Consumers have recently expressed a strong preference for natural/herbal beauty products, so herbal ingredients are increasingly being used in cosmetics and personal care products. In addition, companies are putting more effort into switching from synthetic chemicals to natural ingredients, primarily in response to growing consumer demand and in an effort to find a sustainable source of raw materials. To meet this ongoing demand, organizations are shifting their manufacturing processes to third-party CMOs, which aids in the growth of CMOs in the cosmetics and personal care sector, thus boosting the market growth. Other significant growth factors of the market include, surging geriatric population, rising healthcare expenditure, increasing spread of chronic diseases, escalating demand for generic drugs, and increasing demand for API.

Challenges: However, some challenges are impeding the growth of the market such as rapid technological advancement and dependent on patents, copyrights, trademarks and trade secrets. Industry players rely on a combination of know-how, trade secrets, patents, copyrights, trademarks, and other intellectual property laws, nondisclosure and other contractual provisions, and technical measures to protect many of company’s offerings and intangible assets. These proprietary rights are important to the ongoing operations. The company’s exclusive rights under certain of the offerings are protected by patents, some of which would expire in the near term. When patents covering an offering expire, loss of exclusivity may occur, which may force companies to compete with third parties, thereby negatively affecting the revenue and profitability and simultaneously hinders the growth of the industry.

Trends: The market is projected to grow at a fast pace during the forecast period, due to escalating role of artificial intelligence technology and evolution of advanced respiratory equipment. Healthcare artificial intelligence (AI) has transformed by assisting in repetitive tasks, designing treatment plans, medication management, and drug discovery. It can also be effectively used for healthcare data management by collecting, storing, and normalizing the data. Contract manufacturers are incorporating AI and other technological innovations to become more cost-effective and speed up production time. In addition, pharmaceutical CMOs are constantly developing AI technology in order to facilitate better risk detection and, in turn, improve the quality and safety of pharmaceutical products.

Impact Analysis of COVID-19 and Way Forward:

The COVID-19 pandemic has become a major public health concern around the world. However, the market experienced a positive demand shock, attributable to the increasing number of biopharmaceutical services provided to CMOs. CMOs have been investing in and acquiring 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 in the last year, 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 are expanding 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 moderately consolidated. Strategic collaborations are another common strategy used to gain a competitive advantage. For example, Catalent entered into an agreement with Zumutor Biologics Inc., in February 2020, to produce Zumutor’s ZM008 to treat solid tumours.

The key players in the global healthcare CMO market are:

Catalent Pharma Solutions, Inc.
Samsung Biologics Co. Ltd.
Aurobindo Pharma Limited
Boehringer Ingelheim GmbH
Integer Holdings Corporation
Piramal Enterprises Limited
Lonza Group AG
Koninklijke DSM N.V. (Royal DSM)
Thermo Fisher Scientific Inc.
Recipharm AB
Fareva Group
Symbiosis Pharmaceutical Services

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. These major players have been implementing novel strategies to expand market prospects in the coming years. In April 2021, Thermo Fisher Scientific announced the acquisition of PPD, Inc., global provider of pharmaceutical manufacturing and clinical research services to the biotech industry. This would improve the company’s market position by increasing their manufacturing capacity and customer base. In May 2021, Samsung Biologics and Moderna Inc. announced a collaboration to provide fill and finish services for Moderna’s COVID-19 Vaccine.

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