Contract Pharmaceutical Manufacturing Market Size, Share, Trends

Contract Pharmaceutical Manufacturing Market Overview

The Contract Pharmaceutical Manufacturing Market size was valued at USD 103736.72 million in 2024 and is expected to reach USD 173774.67 million by 2033, growing at a CAGR of 5.9% from 2025 to 2033.

The contract pharmaceutical manufacturing market is a critical part of the global healthcare supply chain, offering services for drug development, manufacturing, and packaging on behalf of pharmaceutical companies. As of 2024, over 1,200 contract manufacturing organizations (CMOs) operate globally, handling approximately 35% of all pharmaceutical production volumes.

These firms manufacture everything from active pharmaceutical ingredients (APIs) to finished dosage forms across tablets, injectables, and biologics. The injectable manufacturing segment alone accounted for over 18 billion units produced in 2023, with a rising shift toward biologics requiring specialized sterile environments. Biopharmaceutical outsourcing is becoming increasingly prevalent, with over 60% of small and mid-sized pharmaceutical companies relying on contract partners to conduct commercial-scale manufacturing.

In emerging markets such as India and China, more than 200 CMOs have upgraded their facilities to meet U.S. FDA or EU EMA compliance standards, representing a combined production capacity of over 500 million units monthly. Demand for high-potency APIs (HPAPIs) saw a 22% increase in contract manufacturing requests in 2023. This rise is driven by the need for cost-efficiency, speed to market, and regulatory compliance. The market is also responding to the demand for flexible, scalable production, particularly for niche therapies, orphan drugs, and mRNA-based platforms.

Key Findings

DRIVER: Rising demand for outsourcing complex biologics manufacturing.

COUNTRY/REGION: United States dominates with over 30% of the global contract manufacturing volume.

SEGMENT: Injectable segment leads, accounting for more than 40% of outsourced pharmaceutical production in 2023.

Contract Pharmaceutical Manufacturing Market Trends

Recent trends in the contract pharmaceutical manufacturing market highlight a strategic shift toward advanced biologics, cell and gene therapies, and mRNA-based vaccines. In 2023, over 280 new biologics were under outsourced production agreements globally. The demand for sterile injectables saw a 17% increase from the previous year, with over 15 billion doses produced under contract manufacturing. Another trend is the growing preference for end-to-end contract services. Approximately 70% of pharmaceutical clients now seek integrated services from development through commercial-scale production. Companies such as Lonza and Catalent expanded their facilities by over 15% in 2023 to accommodate larger volumes of biologics manufacturing. Meanwhile, modular and flexible production facilities are on the rise, with over 50 newly commissioned cleanroom units introduced in 2023 by CMOs to support rapid scale-up. Cold chain logistics has become an integral part of contract services, especially for biologics and mRNA vaccines. Over 60% of injectables now require 2–8°C storage or below. Contract manufacturers have increased investment in ultra-cold storage, adding over 500 new cryogenic freezers globally in 2023. Digitalization is another key trend. More than 120 CMOs implemented Manufacturing Execution Systems (MES) and Electronic Batch Records (EBR) to improve traceability and reduce batch failures by 25%. Regulatory audits also favor digital integration, with digitally enabled CMOs receiving 38% fewer observations during inspections compared to non-digitized facilities.

Contract Pharmaceutical Manufacturing Market Dynamics

The dynamics of the contract pharmaceutical manufacturing market are shaped by a combination of demand-side pressures, innovation in drug formulation, regulatory environments, and strategic shifts by pharmaceutical companies. As pharmaceutical pipelines grow more complex—especially in biologics and personalized medicine—companies increasingly rely on contract manufacturers to deliver scalability, compliance, and cost control.

DRIVER

Rising demand for pharmaceuticals.

A key growth driver in the contract pharmaceutical manufacturing market is the surge in global demand for pharmaceutical products, particularly complex biologics and specialty drugs. In 2023, the global prescription drug volume surpassed 4.7 trillion units, with over 1.2 trillion units manufactured by contract partners. Biologic drug production requests increased by 19%, particularly monoclonal antibodies and gene therapies. Over 45% of late-stage pipeline drugs are biologics, necessitating specialized contract manufacturing. Furthermore, over 65% of new drug application (NDA) filers in 2023 were dependent on contract manufacturers for at least one stage of production. This highlights a robust and increasing reliance on outsourcing for scalability, compliance, and innovation.

RESTRAINT

Capacity constraints and regulatory compliance delays.

One significant restraint for market expansion is the limited capacity of specialized manufacturing, particularly in aseptic and HPAPI segments. As of 2024, over 60% of CMOs reported capacity utilization above 85%, leaving limited room for new projects. Moreover, regulatory inspections often delay the onboarding of CMOs, with an average lead time of 10 to 14 months for FDA approval of a new contract site. In 2023, more than 70 facilities globally received Form 483 observations, delaying launch timelines for over 25 contract-manufactured products. Additionally, disparities in international GMP standards create challenges for multi-country production, complicating global supply strategies.

OPPORTUNITY

Growth in personalized medicines.

Personalized medicine is creating massive opportunities in the contract pharmaceutical manufacturing space. By the end of 2023, over 1,800 clinical trials globally were based on personalized and precision therapies, especially in oncology and rare diseases. Contract manufacturing for cell and gene therapies doubled in volume from 2022 to 2023, with over 90 CDMOs reporting active projects in this domain. The need for small-batch, high-complexity production aligns perfectly with the capabilities of contract manufacturers equipped with flexible production suites. Over 300 new modular cleanrooms were built in 2023 to support personalized medicine manufacturing, signaling a shift in infrastructure investment.

CHALLENGE

Rising costs and expenditures.

Rising raw material costs and operational expenditures pose a serious challenge. In 2023, costs of key excipients such as microcrystalline cellulose increased by 14%, while sterile vials rose by 22% due to global shortages. Labor costs have surged, with pharmaceutical-grade technicians commanding salaries 25% higher than in 2021. Additionally, energy-intensive biologics manufacturing processes have been affected by electricity rate increases of up to 30% in Europe and Asia. These factors collectively reduce profitability and increase dependency on long-term contractual agreements to manage pricing risks.

Contract Pharmaceutical Manufacturing Market Segmentation

The contract pharmaceutical manufacturing market is segmented by type and application. Type segments include Oral, Injectable, API, and Other formulations. Applications are categorized into Large Enterprises and Small-Medium Enterprises.

By Type

Oral: Oral dosage forms remain dominant in terms of volume. In 2023, contract manufacturers produced over 320 billion oral solid units globally. Immediate-release tablets accounted for 58% of this volume, while extended-release tablets contributed 18%. Over 800 CMOs offer oral dosage services, with 200 focusing exclusively on high-volume generics.
Injectable: Injectable manufacturing is the fastest-growing segment. In 2023, contract production of sterile injectables exceeded 18 billion units. Over 120 CMOs now operate aseptic lines, with demand highest for oncology, immunology, and vaccine segments. Single-use technologies and prefilled syringe formats are in high demand.
API: The API segment comprises over 3,000 contract API facilities globally. Approximately 50% of these are located in India and China, producing both small-molecule and large-molecule APIs. More than 70 facilities gained U.S. FDA approval in 2023 for complex synthesis processes such as chiral intermediates and HPAPIs.
Other: Other forms, including topical, ophthalmic, and inhalation drugs, are also seeing growth. Over 85 CMOs globally offer inhalation drug manufacturing, producing over 1.5 billion units in 2023. Topical formulations saw a 12% year-over-year increase in outsourced production.

By Application

Large Enterprises: Large pharmaceutical enterprises constitute the dominant share of contract manufacturing demand, accounting for approximately 75% of the market's volume. In 2023, more than 400 global pharmaceutical giants utilized contract development and manufacturing organizations (CDMOs) for various stages of production. These large firms typically engage with multiple CMOs simultaneously—some utilizing over 10 suppliers to meet global demand.
Small and Medium Enterprises (SMEs): Small and Medium Enterprises represent a rapidly growing application segment in the contract pharmaceutical manufacturing market. In 2023, over 600 SMEs globally turned to contract manufacturers for development, scale-up, and commercial production, particularly for niche therapies and orphan drugs.

Regional Outlook for the Contract Pharmaceutical Manufacturing Market

The contract pharmaceutical manufacturing market exhibits varied growth across regions, influenced by infrastructure, regulation, and cost efficiency. The regional outlook of the contract pharmaceutical manufacturing market reveals distinct trends driven by infrastructure quality, regulatory stringency, cost advantages, and technological specialization.

North America

North America remains the largest contract manufacturing hub. In 2023, the region had over 250 US FDA-approved CMOs producing more than 1.1 trillion units annually. The United States accounts for over 30% of global contract manufacturing volume, with biologics contributing 40% of the output. Canada has seen a rise in specialized manufacturing, with over 20 facilities now certified for cell and gene therapy production.

Europe

Europe hosts over 500 CMOs, with Germany, Switzerland, and the UK being key players. In 2023, the region produced over 850 billion pharmaceutical units under contract. Strict EU regulations and centralized purchasing systems enhance quality, with 90% of CMOs in the region compliant with EMA-GMP standards. Ireland alone accounted for more than 200 million biologic drug units produced under contract.

Asia-Pacific

Asia-Pacific is a major manufacturing base due to cost advantages. India and China house more than 1,000 CMOs collectively. In 2023, India alone exported over 400 billion oral and injectable units under contract manufacturing. Japan and South Korea are gaining traction for biosimilar and advanced therapy manufacturing. The APAC region saw over $1.8 billion in facility upgrades for GMP compliance in 2023.

Middle East & Africa

The region is emerging as a hub for secondary packaging and generic formulation manufacturing. In 2023, over 120 CMOs operated in the region, producing more than 90 billion units. Saudi Arabia and South Africa lead regional growth, with over 25 new pharmaceutical plants established between 2022–2023.

List of Top Contract Pharmaceutical Manufacturing Companies

Catalent
DPx
Lonza
Piramal Healthcare
Aenova
Jubilant
Famar
Boehringer Ingelheim
Fareva Holding
AbbVie
Nipro Corp
Vetter
Sopharma
DPT Laboratories
Recipharm
NextPharma
Dishman
Aesica

Catalent: In 2023, Catalent operated 50+ facilities across North America, Europe, and Asia with over 5,000 active commercial and development programs. The company produced over 75 billion dosage units annually, with sterile injectables and biologics contributing to 60% of its manufacturing volume. Catalent added 20% production capacity by expanding its Bloomington and Anagni sites.

Lonza: Lonza remains a leader in contract biologics manufacturing, with 15 sites across 7 countries. In 2023, Lonza supported over 200 biologics and 40 gene therapy projects. The company reported a 25% increase in HPAPI output and added over 10,000 square meters of cleanroom space across its Visp and Portsmouth sites.

Investment Analysis and Opportunities

Investments in the contract pharmaceutical manufacturing market are growing, driven by the demand for biologics, mRNA therapeutics, and cell & gene therapies. In 2023, global investments into CDMO infrastructure exceeded $12 billion. Over 180 new cleanroom and modular production facilities were built or upgraded to support injectable and biologics manufacturing. In North America alone, more than 60 facilities received capital infusion exceeding $3.5 billion. Advanced therapy medicinal products (ATMPs) represent a lucrative investment zone. Over 300 CDMOs globally reported new investments for manufacturing ATMPs in 2023. The U.S. government alone granted $1.2 billion to CDMOs for pandemic preparedness and advanced biologics capabilities. Europe saw 80 new public-private investment projects to boost biosimilar and personalized medicine manufacturing. AI and digitalization are investment magnets. Over 140 CDMOs invested in AI-based process analytical technologies and digital twin manufacturing simulations. These investments reduced batch failure rates by 20% and increased yield efficiencies by up to 18% in pilot trials. India and China continue to be hotspots for investment due to cost advantages and skilled workforce. In 2023, India approved $2.4 billion in capital expansion projects across Hyderabad, Gujarat, and Maharashtra for API and formulation manufacturing. China initiated 45 new pharmaceutical parks focused on biologics and generics outsourcing. CDMOs are also investing in sustainability. Over 100 companies invested in green chemistry, solvent recovery systems, and low-emission HVAC setups. This move is driven by ESG mandates and pressure from big pharma clients. Sustainability-focused CMOs received 35% more RFPs in 2023 compared to traditional setups.

New Product Development

New product development within the contract pharmaceutical manufacturing space is evolving rapidly, led by biologics, complex generics, and personalized medicines. In 2023, over 420 new formulation contracts were signed globally, of which 190 were related to monoclonal antibodies, ADCs (antibody-drug conjugates), and biosimilars. Biopharmaceutical CMOs introduced over 50 new capabilities in lyophilization, mRNA encapsulation, and continuous manufacturing. For example, Vetter introduced a new high-speed fill-finish line capable of processing 24,000 prefilled syringes per hour. Catalent launched a new oral delivery platform designed for high-solubility drugs, enhancing bioavailability by over 30% in preclinical trials. In the injectable segment, more than 100 new fill-finish technologies were introduced to reduce turnaround time by 25% and minimize contamination risks. Innovations in single-use technologies and barrier isolators are now used by 75% of sterile injectable CMOs. High-potency APIs have seen a surge in new development pipelines. In 2023, over 140 new HPAPI manufacturing projects were initiated under contract, supported by the addition of 65 new containment suites worldwide. These developments target oncology, immunology, and rare diseases. Nanotechnology is influencing new product development. Over 80 CMOs introduced nanocarrier-based drug delivery solutions, especially for poorly soluble drugs. These platforms enhanced drug delivery efficiency by 2x in recent pilot studies. Personalized medicine projects led to the development of 120 small-batch, patient-specific formulations produced by contract manufacturers. Cell and gene therapy saw 70+ new viral vector programs launched in 2023, with demand for batch sizes under 10L increasing by 35%.

Five Recent Developments

Catalent expanded its gene therapy manufacturing site in Maryland by adding 20,000 sq. ft. of cleanroom space in 2023.
Lonza partnered with a U.S. biotech firm to support production of a commercial CAR-T therapy in 2024.
Recipharm acquired a European sterile injectable plant with a capacity of 400 million vials per year in Q1 2024.
Vetter launched a dual-chamber syringe for combination biologic therapies in late 2023.
Piramal Healthcare commissioned a new HPAPI facility in India capable of producing 5 tons annually in January 2024.

Report Coverage of Contract Pharmaceutical Manufacturing Market

This report provides an in-depth analysis of the contract pharmaceutical manufacturing market, covering key aspects of market structure, services offered, end-user segmentation, regional dynamics, and investment trends. The market encompasses a wide range of services such as drug development, API production, dosage formulation, sterile fill-finish, and packaging across multiple therapeutic domains. The study profiles over 200 key market participants and highlights strategic developments including mergers, acquisitions, product launches, and geographic expansions. Over 1,200 contract manufacturers globally have been categorized based on their specialization in oral, injectable, API, and niche dosage forms. The report further explores how over 60% of small and mid-sized pharma companies depend on outsourcing for scalability and speed to market. Data presented includes manufacturing volumes, facility capacity, technology adoption, and supply chain attributes. For instance, over 18 billion injectable units were outsourced in 2023, and over 300 HPAPI projects were conducted by contract partners. The report also documents over 100 regulatory inspections and certifications attained by global CMOs in the past year. The report includes detailed segmentation by type and application, offering insights into the production volumes, geographic concentration, and specialization of CMOs. It identifies injectable manufacturing as the leading segment, with biologics contributing to over 45% of new contract volumes in 2023. Additionally, it outlines the increasing contribution of emerging regions such as Asia-Pacific, where over 1,000 CMOs operate.