Global Market Size and Growth Forecast –Pharmaceutical Development Services

  • PDS accounts for about 5 percent of the total pharma R&D market. This market is estimated to increase from $7 billion in 2014 to $9.1 billion in 2018, seeing strong growth at a CAGR of around 5.5 percent, due to increased outsourcing by large pharmaceutical and biotechnology companies. This market is including both the large and small molecule development spend
  • The Phase I/II PDS development market accounts 30 percent of the entire PDS global spending at $2.1 billion in 2014

pharmaceutical-development-services-and-analytical-testing-global-market-size

Global Outsourcing Market Trend

  • PDS outsourcing spend is expected to increase from $3.15 billion to $4.1 billion in 2018
  • Outsourcing budgets have increased in recent years, swinging from contractions to expansion after the 2008 recession
  • Pharma is maintaining its stance on outsourcing as a cost savings strategy
  • Demands for biologics is a boon for contract manufacturing and contract research organizations

Growth Drivers and Constraints

Drivers

Increased investment in R&D

  • Increased investments at the discovery and early development phases are leading to robust pipelines and creating demand for greater clinical--scale manufacturing capacity.

Increase in biologic drugs

  • The percentage of expenditure going towards biologics development and outsourcing expenditure have both risen over last year.

Broad array of services offering

  • CDMOs are increasingly motivated to offer an expanded array of enhanced drug-delivery technologies, giving their customers broader options for patient care. Delivery technologies can include various targeted and timed release/dissolution and formulation technologies.

Increase in drug molecule complexity

  • Drug molecules are becoming more complex and increasingly require both advanced synthesis and formulation expertise to realize cost-effective, efficacious medicines

Constraints

Pressure of cost reductions

  • The pressure on pharmaceutical firms to reduce costs was transferred to suppliers, which translated into reduced profit margins for suppliers.

Decline in number of initial public offerings (IPO)

  • Without public markets, the industry could see a sharp drop in IND filings, and in the demand for CDMO services, as it did in 2010.

Increasing pharmaceutical In-house capability

  • The pharma-biotech are investing significantly in internal manufacturing capabilities, through the expansion of existing or additional new manufacturing facilities and/or the acquisition of production capability