Biotechnology and Pharmaceutical Services Outsourcing Market Size, Share, and Trends 2024 to 2034

The global biotechnology & pharmaceutical services outsourcing market size was estimated at US$ 71 billion in 2022 and is expected to reach US$ 123.01 billion by 2032, growing at a registered CAGR of 5.70% from 2023 to 2032.

Key Takeaway:

• The consulting service segment has captured revenue share of around 18% in 2022.
• The other services segment is expected to reach at a CAGR of 6.5% during the forecast period.
• By end-use, the pharma segment is projected to hit at a CAGR of 5.9%.
• The pharma services outsourcing segment has generated revenue share of 58% in 2022.
• The North America region has contributed revenue share of 51.5% in 2022.
• The Asia Pacific market is poised to grow at a CAGR of 6.3% during the forecast period.

Biotechnology & Pharmaceutical Services Outsourcing Market Size in the U.S. 2023 To 2032

The U.S. biotechnology & pharmaceutical services outsourcing market size was valued at US$ 26.34 billion in 2022 and is predicted to hit US$ 46.07 billion by 2032, growing at a CAGR of 5.80% from 2023 to 2032.

The North America segment accounted 51.5% market share in 2022. The expansion of the biotechnology & pharmaceutical services outsourcing market in North America region is expected to be aided by the growth of international Contract Manufacturing Organizations (CMOs) and Contract Research Organizations (CROs).

On the other hand, the Asia-Pacific is estimated to be the most opportunistic segment during the forecast period. The Asia-Pacific biotechnology & pharmaceutical services outsourcing market is fueled by the availability of an experienced labor force, as well as the low cost of drug development and production.

Growth Factors

The biotechnology & pharmaceutical services outsourcing, primarily for Contract Manufacturing Organizations (CMOs) and Contract Research Organizations (CROs), has grown in popularity since last decade, and it is expected to grow in the near future. The new outsourcing industry sectors, such as rising screening services, have grown to be prosperous businesses, and many operations that were once considered essential, such as in-house spontaneous animal toxicology testing, are now rare within biotechnology & pharmaceutical services outsourcing market players.

Over the last few years, the growing cell banking business has enabled biotechnology & pharmaceutical services outsourcing companies to generate profit on a large scale. The advanced infrastructure facilities are also expected to be used in clinical research across a variety of applications, including diabetes and cancer treatment and cardiovascular disorders management, due to technological developments. As a result, lots of new service outsourcing firms has grown up in a variety of industries.

However, the constraints such as scarcity of competent product developers and contract research organizations (CROs) restricted regional reach may limit the biotechnology & pharmaceutical services outsourcing market’s growth during the forecast period.

Outsourcing biotechnology & pharmaceutical services has proven to be beneficial in reducing infrastructural and operational costs. However, due to decreasing research and development activities, the biotechnology & pharmaceutical industry has seen a major decline in its new product portfolio. As a result, many companies have implemented additional internal downsizing and increased outsourcing as a means of lowering capital and payroll costs.

Outsourcing has evolved into an industry trend that now encompasses the entire scope of corporate activities, from screening and lead identification to toxicology and a variety of other procedures such as clinical trials and preclinical investigations.

The biotechnology & pharmaceutical services outsourcing is applicable in auditing & evaluation, consulting, product maintenance, regulatory affairs, and testing & validation in the drug discovery sector. The pharmaceutical firms, in particular, rely on these services to stay competitive.

The regenerative medicine, which had a significant impact of overall health, is one of the most recognized and promising application areas for biotechnology & pharmaceutical services outsourcing. The regenerative medicines are experimental treatments that aim to replace or regenerate organs, cells, or tissues, in order to restore function following injury or disease.

In some aspects, this economic-driven expansion in biotechnology &pharmaceutical outsourcing has contributed to a reduction in long-term industry efficiency. Despite the fact that biotechnology & pharmaceutical outsourcing will eventually be shown to be ineffective in terms of promoting new product research and development and innovation, outsourcing will continue to increase.

It is the only option available to biotechnology & pharmaceutical companies that must adjust to lower profitability due to clogged research and development products and drugs that have gone off-patent. During the projection period, the global biotechnology & pharmaceutical services outsourcing market will continue to grow, although at a faster pace than in the past.

The non-core support operations such as human resource, finance, and information technology were the first to be outsourced in the biotechnology &pharmaceutical industry. Outsourced contract research and contract manufacturing have become the norm in the biotechnology &pharmaceutical industry for various key market players.

Furthermore, low- and middle-income regions not only provide reduced costs, but they also have their own rapidly growing biotechnology & pharmaceutical industry. In these low- and middle-income regions, several of the world’s largest biotechnology & pharmaceutical market players invest lots of money in establishing their own research and development centers and outsourcing to contract manufacturing organizations (CMOs) and contract research organizations (CROs).

Scope of the Biotechnology and Pharmaceutical Services Outsourcing Market

Services Insights

Based on the services, the consulting dominates the market with revenue share on 18% in 2022. This is due to an increase in mergers and acquisitions activities as well as constantly changing regulatory guidelines. The key market players are adhering to established standards and conventions, which necessitates consulting because these they lack such expertise.

The other services segment is expected to grow at rapid pace during the forecast period. As Contract Manufacturing Organizations (CMOs) are offering services at a less cost, more generics and biopharmaceuticals are being outsourced. The contract manufacturing, IT consulting, and product upgrades are all included in this category.

Services Outsourcing Insights

The pharma segment dominated the market with 58% revenue share in 2022. The contract service providers are often regarded as a sound strategic solution for addressing drug shortages and high production costs while also meeting rising demand in the market. Due to lack of resources, many pharmaceutical companies have turned to Contract Manufacturing Organizations (CMOs) and Contract Research Organizations (CROs) to develop and manufacture medicines.

On the other hand, the biotech segment is fastest growing segment in the biotechnology & pharmaceutical services outsourcing market. As a result of escalating pricing and increased competition, biotechnology companies are outsourcing internal activities on a large scale.

Key Companies & Market Share Insights

To gain a larger share of the biotechnology & pharmaceutical services outsourcing market and remain profitable in an extremely competitive environment, manufacturing companies are pursuing policies such as reasonable pricing, mergers and acquisitions, business expansion, joint venture, and partnership.

Biotechnology & Pharmaceutical Services Outsourcing Market Companies

• ICON Plc
• The Quantic Group
• Covance Inc.
• PFA Health Sciences
• IQVIA Holdings Inc.
• Lachman Consultant Services
• Charles River
• Parexel International Corporation
• GMP Pharmaceuticals
• Concept Heidelberg GmbH

Segments Covered in the Report

By Services

• Consulting
• Auditing and Assessment
• Regulatory Affairs
• Others

By Services Outsourcing

• Pharma
• Biotech

By Geography

• North America
  • U.S.
  • Canada
• Europe
  • U.K.
  • Germany
  • France
• Asia-Pacific
  • China
  • India
  • Japan
  • South Korea
• Rest of the World