The sheer size and complexity of the outsourcing market make estimates of its global value difficult and arguably somewhat meaningless. However, market research group Visiongain predicts the world market for contract pharma manufacturing will reach US$69.7bn in 2017.1 Market researcher Frost & Sullivan (F&S), meanwhile, puts earned revenue at $13.43bn in 2012 and estimates this will reach $18.49bn by 2017.2 What can be said with certainity is that the sector is growing and encompasses ever more services and offerings.
‘Emphasis on complex disease areas, trends in disease control, growth in emerging markets and reformulation of existing products have widened the scope of the contract manufacturing market,’ says F&S. It also predicts that ‘investments and capacity expansions in the injectable dose formulation segment are likely to be the most significant source of income for the global pharmaceutical contract manufacturing industry’. According to F&S analyst Aiswariya Chidambaram, cytotoxics manufacturing still offers immense growth potential, given the demand from the cancer research and therapy segments.
Despite the growth, many companies in the contract sector have suffered recently from pressure on margins and fierce competition. F&S says many contract manufacturing organisations (CMOs) are relying on one client for more than 50% of their revenue. ‘Coupled with huge tax incentives and lower inventories for low-volume products, this creates immense pricing pressures for CMOs.’
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