Global Market Outlook on CMO Formulation

  • The global CMO Market is growing at a CAGR of 12–13 percent CAGR between 2018E and 2022 E
  • The growth is attributed to increased outsourcing of generic drugs by Big Pharma companies. Additionally, medium and small pharma companies, who do not possess adequate infrastructure, will also outsource, thereby driving the market
  • Presently, non-sterile dominate the global CMO market. However, the sterile CMO market is expected to grow at a higher rate (15 percent) than non-sterile market (9 percent)

 cmo-formulation-market-size

Global CMO Formulations: Market Overview

Supplier Concentration: Sterile CMOs
The CMO sterile market is fragmented, with major players, such as Baxter, Catalent, Patheon, etc. However, CMOs differentiate their capabilities, based on their ability to handle the high potent drugs (OEL limit).Supplier

Concentration - Non-Sterile CMOs
Fragmented market, with a large number of players and varying ranges of capacity, capabilities, and regulatory compliances. Asian CMOs are offering competitive cost benefits, thus giving a stiff competition to CMOs in developed markets.

Global CMO Formulations Market - Drivers and Constraints

Drivers

  • The pharmaceutical sector’s tendency to focus on core competencies and a trend to outsource formulations to CMOs to achieve cost savings are the major market drivers.
  • Requirement for end-to-end service providers, including drug development and manufacturing, is further driving the CMO market.
  • In emerging markets, countries, such as Russia, Ukraine, Indonesia, and Iran, are promoting domestic production of drugs, which is expected to boost the outsourcing to regional CMOs

Constraints

  • As the market is highly fragmented, margins of traditional CMOs, who offer conventional manufacturing services, are under pressure.
  • Introduction of GDUFA is expected to have a negative impact on CMOs’ profits. In such cases, small CMOs are expected to transfer the incremental cost to their customers, which would affect their business.
  • CMOs predominantly manufacture generic drugs. The volume of generic drugs decreases annually, leading to a constant look out for business to maintain their utilization rates

Key Industry Trends and Market Shifts

  • Currently, in the developed market, solid dosage dominates the outsourced market 
  • Over the next five years, the sterile CMO market is expected to grow at a higher pace
  • In the US, the sterile CMO market is expected to grow at 11–13 percent as against the solid dosage growth of 3–5 percent 
  • Emerging market CMOs would offer stiff competetion to develped market CMOs in solid dosages