Pharmaceutical Manufacturing Market

The global Pharmaceutical Manufacturing Market is valued at USD 510.5 Billion in 2022 and is projected to reach a value of USD 863.6 Billion by 2030 at a CAGR (Compound Annual Growth Rate) of 7.8% between 2023 and 2030.

Premium Insights

The increasing number of generic drugs demand drives market expansion. The need for generic drugs has grown significantly with the expiration of patents for several blockbuster drugs. Generic drugs offer cost advantages and are becoming increasingly popular among patients and healthcare providers. According to the Association for Accessible Medicines, generic medicines and drugs accounted for 90% of all prescriptions in the United States in 2020. Moreover, government initiatives and favorable regulatory policies further propel the market growth. Governments worldwide are implementing several initiatives and policies to encourage the development of the Pharmaceutical Manufacturing industry. These include investment-friendly regulations, tax incentives, and fast-track approval processes for new drugs. For instance, the Indian government's "Pharma Vision 2020" aims to make India a global pharmaceutical leader in drug manufacturing and innovation.

• Healthcare expenditure continues to rise worldwide, driven by factors such as the geriatric population base, improving healthcare infrastructure, and growing awareness of healthcare services. According to the World Health Organization (WHO), the spike in health spending to a new high of US $9 trillion (around 11% of global GDP) was driven by a significant rise in government health spending at all country income levels.
• North America generated more than 42.30% of revenue share in 2022 because of the rising investments in research & development and the presence of major companies in the region.
• Asia Pacific is expected to increase during the forecast period, owing to the growing demand for pharmaceutical products, increasing healthcare spending, and favorable government policies.
• The outsourcing segment accounted for the most significant market growth. It contributed over 54.3% of the total revenue share in 2022, owing to the increased focus of pharmaceutical companies on core competencies and cost reduction.
• The Pharmaceutical Manufacturing market was primarily controlled by the tablet sector in 2022. Tablets, favored for their simplicity in taking, convenience, and extended lifespan, are widely accepted as a medication format.
• Over the projected period, the conventional drugs (small molecules) segment is anticipated to experience the highest market growth among different molecule types.

Economic Insights

According to regulatory bodies like the FDA (Food and Drug Administration, US) and EMA (European Medicines Agency), a transition towards more data-oriented drug manufacturing is required. The pharmaceutical industry is being urged to adopt new digital technologies and make greater use of the data gathered to develop manufacturing efficiency and demonstrate the quality of their products. In addition, several sensors are used to manufacture medicines to monitor and regulate vital machinery and process parameters. Consequently, every product created for the market contains extensive details describing every process step, from raw materials entering the process to process parameters, intermediate product features, and final product quality.

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Top Market Trends

• Increasing focus on biologics and biosimilars: Biologics, including vaccines, blood components, monoclonal antibodies, and gene therapies, are becoming a major part of the Pharmaceutical Manufacturing market. The market for biosimilars, which are biologics highly similar to an approved reference product, is also rising. For example, seven biosimilars were approved by the Food and Drug Administration in the U.S. in 2018, which is nearly as many as in the preceding three years. An additional ten biosimilars were approved in 2019. Companies like Amgen, Pfizer, and Novartis invest heavily in biologics manufacturing facilities.
• Shift towards personalized medicine: Personalized medicine tailoring treatment to a patient's genetic makeup is gaining traction in the Pharmaceutical Manufacturing market. Advancements in genomics and molecular diagnostics have enabled the development of targeted therapies for conditions such as cancer and rare genetic disorders.
• Adoption of innovative technologies: Pharmaceutical Manufacturing increasingly embraces technologies like machine learning, AI, and robotics to advance efficiency, reduce costs, and improve product quality. AI-powered platforms can analyze complex data sets and detect patterns to streamline drug discovery & development processes. Also, robotic process automation (RPA) programs repetitive tasks, improves accuracy, and decreases human error. Therefore, using robotic process automation (RPA) services to automate manual operations can be ground-breaking for the pharmaceutical industry. RPA can, on average, reduce errors by 99% and time spent on each procedure by 70%.
• Growing emphasis on sustainability: The Pharmaceutical Manufacturing industry gradually focuses on sustainability initiatives to reduce its environmental footprint. Companies are implementing green manufacturing practices, investing in renewable energy sources, and adopting eco-friendly packaging solutions. For instance, GlaxoSmithKline aims to be carbon neutral by 2030 and has invested in solar panels and wind turbines for its manufacturing facilities.

Market Segmentation

The Global Pharmaceutical Manufacturing Market is categorized into the below-mentioned segments as:

The global Pharmaceutical Manufacturing market can be categorized into Molecule Type, Drug Development Type, Formulation, Therapy Area, Prescription, Age Group, Sales Channel, Route of Administration, Region. The Pharmaceutical Manufacturing market can be categorized into Biologics & Biosimilars (Large Molecules), Conventional Drugs (Small Molecules) based on Molecule Type. The Pharmaceutical Manufacturing market can be categorized into In-house, Outsource based on Drug Development Type. The Pharmaceutical Manufacturing market can be categorized into Tablets, Capsules, Injectable, Sprays, Suspensions, Powders, Other Formulations based on Formulation. The Pharmaceutical Manufacturing market can be categorized into Cardiovascular Diseases (CVDs), Pain, Diabetes, Cancer, Respiratory Diseases, Other Diseases based on Therapy Area. The Pharmaceutical Manufacturing market can be categorized into Prescription Medicines, Over-the-counter (OTC) Medicines based on Prescription. The Pharmaceutical Manufacturing market can be categorized into Children & Adolescents, Adults, Geriatric based on Age Group. The Pharmaceutical Manufacturing market can be categorized into Retail, Non-retail based on Sales Channel. The Pharmaceutical Manufacturing market can be categorized into Oral, Topical, Parenteral, Inhalations, Other Routes of Administration based on Route of Administration. The Pharmaceutical Manufacturing market can be categorized into North America, Europe, Asia Pacific, Latin America, Middle East & Africa based on Region.

Based on Molecule Type

Conventional Drugs (small molecules) Segment Dominates the Market

The conventional drugs (small molecules) segment accounted for the most significant market growth in 2022. This is driven by the increasing incidences of chronic disorders like cardiovascular diseases, diabetes, and cancer, which require long-term treatment with traditional pharmaceutical drugs. The growing global population, aging population, and expanding healthcare infrastructure also contribute to the growth of this segment.

Based on Drug Development

Outsourcing Segment Dominated the Market

In 2022, the outsourcing segment dominated the Pharmaceutical Manufacturing market with a growth rate of 54.3%. One of the primary reasons for the growth in outsourcing is the increased focus of pharmaceutical companies on core competencies and cost reduction. By outsourcing non-core activities such as manufacturing, packaging, and distribution, companies can streamline operations, cut costs, and concentrate on research and development.

Based on Formulation

Tablet to Lead Maximum Market Share

In 2022, the Tablet segment dominated the Pharmaceutical Manufacturing market. Tablets are a popular form of medication due to their ease of consumption, convenience, and longer shelf life. The demand for tablets increases as the global population grows and chronic diseases and ailments become more prevalent. In addition, the tablet segment is witnessing innovation in formulation, dosage forms, and drug delivery systems. Pharmaceutical manufacturers are developing tablets with extended-release properties, providing a sustained therapeutic effect and reducing the frequency of medication administration.

Based on the Route of Administration

Oral Segment Expects Dominion

The oral segment is expected to account for a maximum revenue share in the market during the forecast period, as oral medications are the most widely used form of medication worldwide. The oral segment is driven by factors such as the convenience and ease of administration of oral medications and the growing prevalence of chronic diseases requiring long-term medication.

Based on the Therapy Area

Cancer to Dominate Global Sales

The cancer segment in the global Pharmaceutical Manufacturing market is a crucial and rapidly growing sector. With the alarming increase in cancer cases worldwide, pharmaceutical companies focus on developing innovative therapies and drugs to combat this deadly disease. The demand for cancer drugs has skyrocketed in recent years, significantly boosting the global Pharmaceutical Manufacturing market. These drugs include chemotherapy, immunotherapy, targeted therapies, and hormonal therapies.

Based on Prescription

Prescription Medicines Segment Expects Dominion

The prescription medicines segment expects dominion owing to factors such as an elderly population base, the occurrence of chronic diseases, and developments in medical technology. As healthcare systems worldwide evolve, the prescription medicines segment is expected to grow steadily. This growth will be driven by increased patient access to healthcare, rising healthcare expenditure, and the development of novel therapeutics. The segment's success relies on the ability of pharmaceutical manufacturers to adapt to changing market dynamics and meet the evolving requirements of patients and healthcare providers.

Based on Age Group

Geriatric Segment to Lead Maximum Market Share

The geriatric segment is leading the maximum market share. With the world's aging population increasing rapidly, there is a growing need for pharmaceutical products that cater to the unique healthcare needs of this segment. The geriatric segment includes drugs for age-related conditions such as arthritis, cardiovascular diseases, Alzheimer's, Parkinson's, and various chronic diseases. Pharmaceutical companies are investing heavily in research & development to develop innovative medicines that improve the quality of life for older adults.

Based on the Sales Channel

Retail Segment to Lead Maximum Market Share

The retail segment in the global Pharmaceutical Manufacturing market is vital in providing essential medications to consumers worldwide. The retail segment is crucial for meeting the population's healthcare needs as it ensures easy access to a wide range of medications. It serves as an intermediary between pharmaceutical manufacturers and end consumers, facilitating the distribution of drugs on a large scale.

Based on Region

North America to Lead the Market

In 2022, North America dominated the global market with a growth rate of 42.30%. The North American Pharmaceutical Manufacturing market is a significant sector in the region's economy. Pharmaceutical manufacturers in North America have been increasing their investments in research & development activities. The United States dominates the Pharmaceutical Manufacturing market in North America, accounting for a major market revenue share. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), in 2020, the U.S. biopharmaceutical industry as a whole invested an estimated $122 billion in R&D. Moreover, North America is home to numerous vital pharmaceutical companies, including Pfizer, Johnson & Johnson, Merck & Co., AbbVie, and Amgen. These companies have a strong presence in the region and contribute to the growth of the Pharmaceutical Manufacturing market through their research, development, and manufacturing activities.

Competitive Landscape

The Pharmaceutical Manufacturing market is highly competitive and is dominated by a few major players. However, several smaller companies are making a significant impact on the industry. The market is driven by factors such as research & development capabilities, product innovation, manufacturing capabilities, regulatory compliance, and global distribution networks. The pharmaceutical industry invests much in R&D activities to develop innovative drugs. In accordance with the Pharmaceutical Research and Manufacturers of America (PhRMA), the industry invested around $83 billion in R&D in 2019.

The players in the global Pharmaceutical Manufacturing market include F. Hoffmann-La Roche Ltd. (Switzerland), Novartis AG (Switzerland), GlaxoSmithKline PLC (UK), Pfizer Inc. (U.S.), Merck & Co. Inc. (U.S.), AstraZeneca (UK), Johnson & Johnson (U.S.), Sanofi SA (France), Eli Lilly and Company (U.S.), AbbVie Inc. (U.S.), Thermo Fisher Scientific Inc. (U.S.), Wuxi Apptec (China), Samsung Biologics (South Korea), FUJIFILM Diosynth Biotechnologies U.S.A. Inc. (U.S.), Lonza Group AG (Switzerland), Catalent Pharma Solutions (U.S.), Jubilant Pharmova Limited (India) among others.

Recent Market Developments

• In June 2023, Pfizer and Samsung Biologics announced a strategic alliance for the long-term commercial manufacturing of Pfizer’s extensive product portfolio. In March 2023, Samsung Biologics and Pfizer agreed to an initial manufacturing agreement for a Pfizer product. Pfizer will receive additional large-scale manufacturing capacity from Samsung Biologics to support its multi-product biosimilar portfolio that addresses inflammation, immunology, and oncology.
• In March 2023, Eli Lilly and Company invested $1.5 billion in new manufacturing facilities. On March 27, 2023, Lilly executives and local authorities broke ground for their brand-new, cutting-edge biotech manufacturing campus in Raheen, Co. Limerick, Ireland. With this over $1 billion investment in its next-generation biotech plant, Lilly will have the most advanced manufacturing facility for its current monoclonal antibodies. Until 2026, this facility will manufacture the company's current products and pipeline clinical products.

Segmentation of the Global Pharmaceutical Manufacturing Market