Contract manufacturing revenues to double by 2021


Revenue generated from the outsourcing of contract manufacturing by the pharmaceutical industry will more than double between now and 2021, a new report forecasts.

Visiongain’s Pharmaceutical Contract Manufacturing: World Market Outlook 2011-2021 predicts the sector will reach $64.07 billion in 2016 after a compound annual growth rate (CAGR) of 8.7%.

Richard Lang, pharmaceutical industry analyst at Visiongain, says the sector will benefit from “a continued move to strategic outsourcing” by pharma.

The industry will increase the amount of manufacturing it outsources in the next decade to cover the costs of R&D and marketing, the report predicts.

The US accounted for 42% of total demand for contract manufacturing services in 2010, the report found, with demand expected to grow from developed market-based pharmaceutical companies over the next ten years. Growth in the biotechnology sector also presents a “significant new opportunities” for contract research organisations, the report says.

Currently, the production of active pharmaceutical ingredients (APIs) remained the biggest sector for the contract manufacturing industry with the report finding it accounted for almost three-quarters (71%) of the global market.

The report forecasts that API manufacturers in emerging markets will achieve increasing demand for their services, and that demand for generic and potent APIs will be one of the main drivers for growth during the next ten years.

“Industry will look more to long-term relationships with a few selected contract manufacturing organisations (CMOs) as the decade goes on,” Mr Lang said. “Becoming a full-service CMO or specialising in a niche area will best allow contract manufacturers to take advantage of these strategic partnerships.”

The report adds there are future opportunities for CMOs to expand through buying manufacturing facilities from pharma or acquiring smaller rival companies. Those which offer specialised manufacturing service will also benefit, it adds.