The global pharmaceutical contract manufacturing and research services market was valued at USD 263.37 billion in 2024 and is expected to expand at a compound annual growth rate (CAGR) of 6.9% from 2025 to 2030. The market is primarily driven by the cost and time efficiencies of outsourcing, allowing pharmaceutical companies to focus more on their core competencies such as RD, drug discovery, and commercialization.

Leading market participants are continuously investing in infrastructure, workforce development, and advanced technologies to strengthen their positions and capture a larger share of outsourcing revenue. Moreover, the growing presence of end-to-end service providers offering value-added, integrated, and risk-sharing business models is further contributing to market expansion.

The escalating complexity of modern drug development also fuels the demand for contract services. The increasing prevalence of biologics, biosimilars, HPAPIs, and personalized medicines necessitates advanced manufacturing capabilities and specialized expertise that many pharmaceutical companies may lack internally. CMOs and CDMOs frequently possess cutting-edge technologies, such as continuous manufacturing processes, sophisticated containment systems for HPAPIs, and flexible production lines for personalized therapies, making them indispensable partners. Integrating automation and artificial intelligence further enhances their value proposition by improving quality control, optimizing processes, and ensuring stringent regulatory adherence, ultimately accelerating the often lengthy and intricate drug development lifecycle.

Beyond operational and scientific drivers, global health trends and market dynamics significantly expand the market. The worldwide surge in chronic diseases necessitates a greater volume and diversity of pharmaceutical products, many efficiently produced through contract manufacturing. The expiration of drug patents leads to a heightened demand for cost-effective generics and biosimilars, frequently outsourced for large-scale production. Moreover, the evolving regulatory landscape, stringent compliance requirements, and the imperative for faster time-to-market further incentivize pharmaceutical companies to leverage the expertise and established frameworks of CMOs and CDMOs. Geographic shifts, particularly the growth of the Asia-Pacific region as a cost-competitive manufacturing hub, and the emergence of integrated CRO-CDMO models offering end-to-end solutions, underscore this critical market's dynamic and expanding nature.

Detailed Segmentation:

1. Service Insights

In 2024, pharmaceutical contract manufacturing services emerged as the dominant segment, accounting for 66.1% of total market revenue. This segment's growth is driven by the industry's growing reliance on outsourcing to:

• Minimize capital expenditure
• Achieve scalability and operational efficiency
• Accelerate time-to-market

Key Drivers of Manufacturing Segment Growth:

• The surge in demand for generics, biosimilars, and vaccines, all of which require cost-effective, high-volume production capabilities
• The need for regulatory compliance and technical expertise, often more efficiently handled by specialized CMOs/CDMOs
• Big pharma's strategic shift toward focusing on core competencies such as drug discovery and commercialization, rather than in-house manufacturing
• Expansion in emerging markets, particularly in Asia-Pacific, where contract manufacturing offers notable cost advantages and access to skilled labor

Sub-Segment: API/Bulk Drug Manufacturing

Within contract manufacturing, Active Pharmaceutical Ingredient (API)/bulk drug production led the category in 2024. This dominance is largely due to:

• The rising global demand for Highly Potent APIs (HPAPIs), used in cancer therapies and other specialized treatments
• Growing complexity in molecular drug development, which necessitates expertise and infrastructure only a few manufacturers currently offer

2. Regional Insights

North America

North America held a significant share of the global pharmaceutical contract manufacturing and research services market in 2024, supported by the region’s well-established pharmaceutical ecosystem and comprehensive CDMO offerings.

Contributing Factors:

• A strong base of end-to-end CDMO providers offering services ranging from formulation development to regulatory consulting and clinical support
• The rising burden of chronic and complex diseases, especially cancer, is spurring demand for advanced drug development services. For instance, the American Cancer Society projected over 2 million new cancer cases and 611,720 cancer-related deaths in the U.S. in 2024, emphasizing the need for robust oncology research and manufacturing capabilities
• Government initiatives and public-private partnerships, including pandemic preparedness and cancer research programs, are fueling investments in contract services
• North American companies are at the forefront of integrating AI, robotics, and continuous manufacturing technologies, making the region a hub for innovation in pharmaceutical outsourcing

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Key Pharmaceutical Contract Manufacturing And Research Services Company Insights

Some key companies operating in the market include Catalent, Inc (Novo Holdings A/S); PPD (Thermo Fisher Scientific Inc.); and AbbVie Inc.; among others. Organizations are employing strategic partnerships, MA, and geographic expansion. 

• AbbVie’s contract manufacturing wing provides comprehensive pharmaceutical development and manufacturing services, spanning small and large molecules, including biologics and potent compounds. The company offers global partnerships for clinical and commercial supply, emphasizing quality, flexibility, and supply chain security across various dosage forms.
• Lonza is a global CDMO specializing in biologics, cell and gene therapies, and small molecule APIs. Lonza offers integrated solutions from early development to commercial production, with notable expertise in mRNA, viral vectors, and continuous manufacturing, serving a diverse global clientele in the pharmaceutical and biotech sectors.

Key Pharmaceutical Contract Manufacturing And Research Services Companies:

The following are the leading companies in the pharmaceutical contract manufacturing and research services market. These companies collectively hold the largest market share and dictate industry trends.

• Catalent, Inc (Novo Holdings A/S)
• PPD (Thermo Fisher Scientific Inc.)
• AbbVie Inc.
• Advent International, L.P.
• Grifols
• Dalton Pharma Services
• Boehringer Ingelheim International GmbH
• Lonza

Recent Developments

• In January 2025, Lonza (Switzerland) announced its intention to divest its Capsules Health Ingredients business. This strategic decision aims to allow Lonza to concentrate on its core CDMO operations.
• In October 2024, Thermo Fisher Scientific (Italy) introduced its Accelerator Drug Development at CPHI Milan. This integrated CDMO and CRO solution aims to expedite drug development across the pharmaceutical value chain.
• In July 2024, Suven Pharmaceuticals (India), backed by Advent International, proposed acquiring a controlling stake in Sapala Organics (India), a Hyderabad-based CDMO specializing in oligo drugs, with a phased acquisition plan.
• In June 2024, Dalton Pharma Services (Canada) partnered with 3P Innovation to commission a high-speed aseptic powder filling line, enhancing their drug production capabilities to meet increasing global demand.
• In October 2023, Advent International and Warburg Pincus completed their USD 4.25 billion acquisition of Baxter’s BioPharma Solutions (USA), rebranding it as Simtra BioPharma Solutions, a standalone CDMO.

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