Healthcare CMO Market Driven by Increasing Outsourcing Activities
The Healthcare CMO Market market overview paragraph is the global healthcare CMO market provides lucrative opportunities for contract manufacturing organizations (CMOs) worldwide. Healthcare CMOs are integral partners for pharmaceutical and biotechnology companies. They offer customized formulation development, fill/finish manufacturing, packaging, and labelling services to support the drug development and commercialization needs of biopharmaceutical clients. Outsourcing drug development activities to experienced CMOs allows biopharmaceutical companies to focus on core competencies while reducing complexity in supply chain management. The contracting of formulation development and manufacturing operations to specialized third-party vendors helps drug developers accelerate market entry while maintaining quality and compliance standards. The Global Healthcare CMO Market is estimated to be valued at US$ 507.46 Mn in 2024 and is expected to exhibit a CAGR of 5.4% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the Healthcare CMO Market Size are FMC Corporation, BASF SE, Bayer AG, Sumitomo Chemical Co., Ltd., Syngenta AG, Adama Agricultural Solutions Ltd., UPL Limited (previously United Phosphorus Limited), Nufarm Limited, Tagros Chemicals India Ltd., and Heranba Industries Limited. With rising demand for biosimilars and biologics, several big pharmaceutical developers are outsourcing drug production activities to CMOs. This has increased factory utilization levels and order volumes for major CMOs. Geographically as well, CMOs are expanding their production capacities across key markets to cater to global clientele. For instance, many European and US CMOs are setting up facilities in Asia Pacific and Latin America.
The growing prevalence of chronic diseases worldwide has increased the demand for innovative drugs. However, high costs of drug development have necessitated pharmaceutical companies to strategically outsource non-core functions. Furthermore, patent cliffs of major blockbuster drugs have compelled companies to rely on CMOs to drive productivity and maximize profits. As a result of these market drivers, the volume of drugs manufactured through CMOs has risen dramatically over the past decade. It is expected that the trend will continue as outsourcing becomes more mainstream.
Global expansion of key CMOs and their expanded capability sets have enabled biopharmaceutical firms to access a wider service and technology array. Several large CMOs have achieved significant scale through acquisitions, allowing for multi-country clinical trials and commercial manufacturing under one roof. Their advanced integrated offerings have boosted outsourcing convenience. As a result, biopharma has displayed high dependence on CMOs for commercial-scale production since the late 2010s.
Market drivers
One of the key drivers fuelling the healthcare CMO market is the increasing outsourcing activities by pharmaceutical and biotechnology companies. Large drug makers are outsourcing both clinical and commercial stage manufacturing to contract service providers in order to focus on drug discovery and development. This allows them to reduce costs and fast track new product launches. Moreover, rising pressure to enhance productivity and lack of adequate in-house infrastructure has pushed biopharma firms to engage CMOs that can provide specialized expertise in technologies such as monoclonal antibodies, gene and cell therapies.
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