The global healthcare CMO market is expected to reach US$ 223,355.6 Mn in 2027 from US$ 80,479.4 in 2018.
According to The Insight Partners market research study titled Healthcare CMO Market to 2027 - Global Analysis and Forecasts by Service and Geography. The global healthcare CMO market is expected to reach US$ 223,355.6 Mn in 2027 from US$ 80,479.4 in 2018. The market is estimated to grow with a CAGR of 12.2% from 2019-2027. The report highlights the trends prevalent in the global healthcare CMO market and the factors driving the market along with those that act as challenges to its growth.
Contract manufacturing organization (CMO) also known as contract development and manufacturing organization is a company that serves several other companies in the medical devices as well as pharmaceutical and biopharmaceutical sector with comprehensive services from development, manufacturing to packaging. These services are outsourced by various OEM players in the business in order to help with the scalability, and save marginally on production costs. The growth of the global healthcare CMO market is attributed to the increasing inclination of pharmaceutical and medical device manufacturers towards outsourcing, increasing patent cliffs, rising geriatric population coupled with the increasing production of drugs & medical device. However, lack of skilled professionals is the major factor hindering the market growth.
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Healthcare CMO Market Competitive Landscape and Key Development
The major players operating in the healthcare CMO market include, Royal DSM, Catalent, Inc, Boehringer Ingelheim International GmbH, Recipharm AB (publ), Fareva, Lonza, Piramal Enterprises Ltd, Dr. Reddy’s Laboratories Ltd., Almac Group, FAMAR Health Care Services. The market is has provided inorganic growth strategies to these companies by various market consolidations. For instance, during February 2018, Lonza and Denali Therapeutics entered into a partnership for neurodegenerative diseases that covers all stages of the development and manufacturing.
The market for healthcare CMO is expected to grow significantly due to factor as increasing inclination of pharmaceutical and medical device manufacturers towards outsourcing, increasing patent cliffs and rising geriatric population coupled with the increasing production of drugs & medical devices. However, the challenge such as lack of skilled professionals for CMO likely to impact the growth of the market in the forecast period.
The COVID-19 has affected economies and industries in various countries due to lockdowns, travel bans, and business shutdowns. The COVID-19 crisis has overburdened public health systems in many countries and highlighted the strong need for sustainable investment in health systems. As the COVID-19 pandemic progresses, the healthcare industry is expected to see a drop in growth. The life sciences segment thrives due to increased demand for invitro diagnostic products and rising research and development activities worldwide. However, the medical technologies and imaging segment is witnessing drop in sales due to a smaller number of surgeries being carried out and delayed or prolonged equipment procurement.
Increasing Patent Cliffs to Drive Global Healthcare CMO Market Growth
The growth of the healthcare CMO market is majorly driven by the pharmaceutical industry, the increase in the production of the generic medicinal products across the world. The production of the generic drugs is increased due to the expiry of the patented drugs. The expiry of the patents create a huge scope for the generic manufacturer to produce generic drugs for various therapeutic areas. The production of the generic drugs are manufactured with the low cost compared to the innovative drugs. Each year the pharmaceutical industry gets distressed by patent expirations that threaten the sales of innovative medications.
The healthcare CMO market is likely to grow in the developing regions such as Europe and Asia Pacific, among which Asia Pacific is estimated to be the fastest growing market. The regions is consolidated with the various generic drug manufacturers. The demands for the therapeutics drugs are higher from countries such Italy, Germany, China and India among the other countries. The competition for the manufacturing of the generic drugs is much higher and the closer government support for the manufacturing are likely to fuel the growth of the market.
The rising numbers of the contract manufacturing across the globe are entering in the production of the generic drugs as the legislation encouraged competition to benefit consumers. The CMOs help in the manufacturing the drug with the bioequivalence testing and the drugs are produced with the current good manufacturing practices. The CMO allows to reduce the cost of manufacturing and enhance the production in bulk quantities. Additionally as per the EvaluatePharma statistics it is stated that approximately US$ 194 billion in the innovative drugs sales are at risk during the 2017- 2020. Also an estimate of nearly US$ 31 billion could be lost due to the expiry of patents alone in 2018. Therefore, owing to the above mentioned factors the market for the healthcare CMO is likely to propel during the forecast period.
Healthcare CMO Market: Segmental Overview
In terms of service, the global healthcare CMO market is segmented into pharmaceutical contract manufacturing services and medical device contract manufacturing services. In 2018, pharmaceutical contract manufacturing services segment held largest share of the market. Also, the same segment is estimated to register the highest CAGR during the forecast period.
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