The global healthcare contract development and manufacturing organization market size is expected to reach USD 352.3 billion by 2027, registering a CAGR of 8.1% over the forecast period, according to a new report by Grand View Research, Inc. Increasing outsourcing of R&D is one of the major factors contributing to the market growth.

Healthcare contract development and manufacturing organization (CDMO) provides outsourcing services to various pharmaceutical industries on contract basis. Increase in the outsourcing by pharmaceutical companies, growing pharmaceutical industry, and support of CDMOs in reducing the operational and capital expenses are some of the major factors anticipated to propel the market growth over the forecast period.

In addition, growing pressure on pharmaceutical and medical device companies to follow stringent timelines has increased the demand for outsourcing development and manufacturing activities to CDMOs. Further, due to increasing demand for medical devices in the emerging countries, various companies are shifting their focus on research and development and outsourcing of medical devices. Also, rise in outsourcing of R&D and growing competency of CDMOs are expected to further contribute to the growing demand for early stage development CDMOs by life science companies.

However, increasing logistic costs, serialization issues faced by healthcare organizations, and threat of infringement of Intellectual Property (IP) rights are anticipated to restrain the market growth for healthcare contract development & manufacturing organization over the forecast period.

Further key findings from the report suggest:

  • The contract manufacturing segment dominated the market with a revenue share of 72.7% in 2019 due to increase in the outsourcing of manufacturing services by pharmaceutical and medical device companies
  • The preclinical segment is expected to register the highest CAGR of 8.6% over the forecast period due to rising prevalence of many lifestyle-influenced diseases
  • North America dominated the healthcare contract development and manufacturing organization market with the largest revenue share of 41.2% in 2019 owing to the presence of large number of CROs and CMOs in the region
  • The Asia Pacific region is projected to witness the fastest growth during the forecast period owing to low cost service offered by Asian CROs and CMOs
  • Some of the key market players are Catalent Inc.; Lonza Group Ltd.; Recipharm AB; Siegfried Holding AG; Thermo Fisher Scientific Inc.; Covance Inc.; Jabil Inc.; Sanmina Corporation; IQVIA Holdings Inc.; and Flex Ltd.