Pharmaceutical Manufacturing Market Size Report, 2021-2028 (2024)

Report Overview

The global pharmaceutical manufacturing market size was valued at USD 405.52 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 11.34% from 2021 to 2028. The pharmaceutical landscape has undergone a massive transformation with the emergence of new technologies, cost-effective, and more efficient manufacturing approaches. In addition, increasing investment flow in this space has impacted the market growth positively. Manufacturing floor downtime and the production of product waste are reduced by the implementation of robotic technology and Artificial Intelligence(AI). In addition, single-use disposable solutions have gained momentum in this industry and have replaced conventional open transfer manufacturing techniques. Furthermore, the paradigm shift towards integrated, smart, and data-rich paperless operations has resulted in error-free and precise production. Such ongoing developments have propelled drug manufacturing.

Constant progress in the field of personalized medicines has opened up numerous possibilities to target different health maladies and allowed the development of patient-centric models. This progress results in a shift from large batches to smaller batches for the development of complex medicines and autologous patient-centric treatments. This has also encouraged the manufacturers to redesign their supply chain to better align with the patient-centric health care system.

A rise in drug approvals by the regulatory bodies is expected to fuel the drug manufacturing procedures. For instance, the FDA approved 59 drugs in 2018, 49 drugs in 2019, and 15 drugs up to April 2020. Furthermore, a large number of ongoing clinical trials have created numerous growth opportunities for market growth.

Mergers & acquisitions in the pharmaceutical industry have increased in the past few years. Most of the well-established companies are consolidating to enhance their market position in the highly competitive environment. Whereas small- to mid-sized pharma companies are being acquired for their innovative capabilities. Moreover, stringent regulations to curb pharmaceutical prices have resulted in a large number of mergers & acquisitions.

Molecule Type Insights

In 2020, the conventional drugs (small molecules) segment accounted for the highest revenue share of over 65%. According to an article published in August 2019, in the pharmaceutical market, small molecule drugs account for up to 90% of the total global drug sales. This is representative of the dominance of small molecules in the global pharmaceutical market. In addition, this is shown by the current trends and recent approvals of drugs by regulatory bodies across the globe.

For instance, in 2018, 59 new drugs gained regulatory approval from the U.S. FDA, out of which, 71 % of drugs were small molecule drugs. Small molecule drugs represent around 60% share in comparison with large molecule drugs. Furthermore, changing landscape of small molecules in terms of molecule potency, drug product complexity, industry makeup, and manufacturing trends has also supported the dominance of small molecule drugs in the pharmaceutical industry.

Over the past few years, biologics are increasingly gaining traction with promising efficacy for the treatment of autoimmune diseases and cancer. Owing to the substantial investments and innovative approaches, biologics are gaining significant attention. In early 2020, seven of the top 10 best-selling drugs were biologics. This shows the emergence of biologics in the global market.

Drug Development Type Insights

The outsourcing segment dominated the market in 2020 with a revenue share of over 54%. Several benefits associated with outsourcing operations are expected to drive the segment growth at a lucrative pace over the coming years. Outsourced services minimize the investments, reduce drug development & overall costs, increase the efficiency of manufacturing procedures, and easily comply with different regulatory norms. Moreover, the integration of Robotic Process Automation (RPA) by contract manufacturers efficiently accelerates the drug development processes.

In recent years, key drug manufacturers have shifted their focus towards external service providers for R&D and manufacturing services. The growth in the demand for customized products, the need for enhanced productivity & efficiency across the value chain, and continuous pressure from regulatory bodies on drug pricing have compelled the pharmaceutical companies to rely more on outsourcing mode of drug development.

Most of the large-scale drug manufacturers opt for in-house production because it allows the companies to have control over the private information associated with novel molecules. Expansion of in-house manufacturing facilities by key firms also drives the segment growth. For instance, in February 2021, WuXi STA; a subsidiary of WuXiAppTec; announced to purchase a Switzerland-based manufacturing facility from Bristol Myers Squibb. Thus, in-house manufacturing is expected to witness significant growth in the coming years.

Formulation Insights

In terms of revenue, the tablets dominated the market with a share of over 26 % in 2020. This is due to the wide availability of tablets in different colors, shapes, and sizes as well as types, such as film and enteric-coated, effervescent, and orally disintegrating tablets. The advent of 3D-printed tablets designed for personalized needs also boosts segment growth. For instance, in February 2020, Merck partnered with a German firm, AMCM, to conduct clinical testing on 3D-printed tablets.

The injectable segment is anticipated to grow at the second-fastest CAGR during the forecast period. A rise in the number of approvals for prefilled syringes and auto-injectors is attributed to the segment growth. Moreover, a shift in preferences towards larger dosage volumes has resulted in an increased demand for 2.25-mL needle syringes, which significantly contributes to the revenue generation in this segment.

Subcutaneous injections have gained immense popularity in recent years among drug developers, device manufactures, and patients. Benefits associated with these injections are self-administration, ease of use, reliability, precision, use of fixed doses in prefilled syringes, compact design, compliance, and high patient comfort. The advent of subcutaneous injections is expected to further propel the growth of the injectable segment.

Routes of Administration Insights

The oral segment led the global market and was valued at 236.91 billion in 2020. Oral dosage forms are affordable, easy to manufacture, and patient-friendly. In addition, the advancements in drug delivery technologies, such as sustained release dosage formulations and targeted drug delivery, have allowed orally administered drugs to achieve greater levels of availability in the marketplace.

A significant rise in the implementation of automated systems and barrier systems, including restricted access barrier systems, and isolators, in parenteral manufacturing, is expected to boost the parenteral segment at the fastest CAGR over the forecast period. In addition, an introduction of a broad range of packaging styles, such as ready-to-fill syringes, cartridges, and vials, has hugely transformed the parenteral manufacturing sector.

The rise in demand for innovative drug-delivery systems that better fit with the ‘mobile lifestyle’ of patients paves a path for the high adoption of pens and autoinjectors, which further surges the segment growth. In addition, an increase in the outsourcing of fill-finish manufacturing services by the drug developers boosts the revenue generation in the parenteral segment.

Therapy Area Insights

The other diseases segment dominated the market with a revenue share of more than 64% in 2020 and will retain the leading position throughout the forecast years. The COVID-19 pandemic is anticipated to serve as the key driving force for R&D expenditure in this segment. Moreover, growing awareness about women’s health has driven significant attention of operating players towards the development of therapies to address key conditions in women, such as menstrual irregularities.

On the other hand, cancer therapies are anticipated to register the fastest CAGR from 2021 to 2028. This is owing to the high sales of oncology drugs, especially KEYTRUDA of Merck and HUMIRA of AbbVie, Inc. Several studies have reported that healthcare spending on cancer treatments has doubled in the last few years. Moreover, a huge number of clinical tests in immuno-oncology globally are driving the segment growth.

An increase in the incidence rate of diabetes globally and a rise in the number of marketed branded anti-diabetic therapies create numerous growth opportunities for the diabetes segment. According to the estimates of the International Diabetes Federation, there were around 463 million adults with diabetes in 2019 and it is expected to rise to 700 million cases by 2045. Thus, the high incidence rate of the disease drives the segment growth.

Prescription Insights

The prescription medicines segment accounted for the maximum revenue share of 84.73% in 2020 and will expand further at a steady CAGR from 2021 to 2028 due to the growing prescription drug expenditures across the globe. According to the American Journal of Health-System Pharmacy, the overall prescription drug spending rose by 4-6% in 2019 in the U.S. Similarly, data from Vizient’s Pharmacy Program stated that the hospital prescription drug spending rose by nearly 4.57% in 2020.

Factors, such as the high demand for cost-effective treatment options and self-medication, have hugely transformed the Over-The-Counter (OTC) medicines segment. OTC medicines are comparatively cost and time-effective as compared to prescription medicines. Recently, several regulatory bodies have shifted a large number of medicines from the prescription to the OTC segment.

As per the estimates of the Consumer Healthcare Products Association study, this paradigm shift is expected to save around USD 20.0 billion healthcare spending every year. This Rx-to-OTC switch is a scientifically rigorous, data-driven, and highly regulated procedure that enables consumers to have access to a wide range of medicines. Thus, the cost-saving benefits coupled with high public demand for OTC medicines will propel the segment growth at the fastest growth rate from 2021 to 2028.

Age Group Insights

The geriatric segment led the global market and was valued at 203.16 billion in 2020. According to the publications of World Population Prospects: the 2019 Revision, one in 11 individuals were over age 65 years in 2019. This is expected to reach to one in six individuals by 2050.

The growth of specialty drugs under the Orphan Drug Act has been a boon in pediatric medicine. The introduction of the Pediatric Research Equity Act (PREA) and Best Practices for Children Act (BPCA) provides a carrot-and-stick technique that focuses on the development of pediatric medicines. PREA operates as a checkpoint during the FDA drug approval. Thus, due to such supportive initiatives, the children & adolescents segment is estimated to grow at the fastest CAGR from 2021 to 2028.

Moreover, the growth in the approvals of pediatric medicine boosts the segment growth. For instance, in March 2020, Eli Lilly and Company received the FDA approval for the supplemental Biologics License Application for its Taltz injection that is designed for the treatment of plaque psoriasis in children. In January 2020, Neurelis, Inc. received the FDA approval for its VALTOCO nasal spray that is designed for epilepsy treatment in children aged 6 years and above.

Sales Channel Insights

The retail segment accounted for the largest revenue share of 77.95% in 2020. As the medical cost and health insurance have risen, more people have shifted their preferences towards self-medication for the treatment of minor health issues. Moreover, OTC medicines have gained popularity as an easy and cost-effective option. These factors result in the high adoption rate of drugs from retail stores, which leads to a larger share of this segment.

In recent years, specialty pharmacy has gained significant traction resulting in the wide availability of specialty drugs at retail pharmacies, which also drives the segment growth. In addition, retail pharmacies undergo partnerships and collaboration models with health professionals and healthcare facilities to improve clinical outcomes and remain competitive with other businesses in the industry.

The advent of the electronic transfer of information is anticipated to open up numerous opportunities within primary care. This can eliminate the issues of poor communication between primary and secondary care. Moreover, the use of diagnostic support systems enables the automated introduction of clinical pathways of care, which can be tailored by clinicians according to the patients’ needs. This, in turn, is estimated to drive the sale of drugs in the non-retail segment at the fastest CAGR from 2021 to 2028.

Regional Insights

North America dominated the market with a share of 37.26% in 2020. This is attributed to a large number of strategic pharma partnerships, especially among the well-established and early-stage companies, in this region. In addition, the U.S. held the dominant position in per capita prescription drug spending globally. Furthermore, the U.S. accounted for the largest number of drug efficacy studies and clinical trials in the global market.

Asia Pacific is expected to be the fastest-growing regional market during the forecast period due to a huge customer base, increase in healthcare expenditure, rising disease incidence, and the presence of supportive regulatory systems. In addition, recently, the region has adapted to new technologies and undergone a digital transformation to achieve sustainable patient care.

Various national-level policies have promoted the application of big data and Artificial Intelligence (AI) in Asian countries. The State Council of China issued guidelines to promote the development of healthcare big data and AI with specific emphasis on its application in healthcare. Moreover, several western companies are setting up new facilities in this region due to cost benefits.

Key Companies & Market Share Insights

Key players have adopted strategic initiatives to expand their presence and maintain a competitive edge in the market space. Moreover, market participants are involved in product development, collaboration and partnership models, agreements, business expansion, and merger &acquisition strategies to reinforce their product portfolio and fulfill the demand for pharmaceutical products. Some of the key companies operating in the global pharmaceutical manufacturing market include:

• F. Hoffmann-La Roche Ltd.

• Novartis AG

• GlaxoSmithKline plc

• Pfizer, Inc.; Merck & Co., Inc.

• AstraZeneca

• Johnson & Johnson

• Sanofi SA

• Eli Lilly and Company

• AbbVie, Inc.

• Sun Pharmaceutical Industries Ltd.

• Novo Nordisk A/S

• Takeda Pharmaceuticals, Inc.

• Cipla Ltd.

• Bristol Myers Squibb Company

• Gilead Sciences, Inc.

Pharmaceutical Manufacturing Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2028. For the purpose of this study, Grand View Research has segmented the global pharmaceutical manufacturing market report on the basis of molecule type, drug development type, formulation, routes of administration, therapy area, prescription, age group, sales channel, and region:

• Molecule Type Outlook (Revenue, USD Billion, 2018 - 2028)

  • Biologics & Biosimilars (Large Molecules)

  • Conventional Drugs (Small Molecules)

• Drug Development Type Outlook (Revenue, USD Billion, 2018 - 2028)

  • In-house

  • Outsource

• Formulation Outlook (Revenue, USD Billion, 2018 - 2028)

  • Tablets

  • Capsules

  • Injectable

  • Sprays

  • Suspensions

  • Powders

  • Other Formulations

• Routes of Administration Outlook (Revenue, USD Billion, 2018 - 2028)

  • Oral

  • Topical

  • Parenteral

  • Inhalations

  • Other Routes of Administration

• Therapy Area Outlook (Revenue, USD Billion, 2018 - 2028)

  • Cardiovascular Diseases (CVDs)

  • Pain

  • Diabetes

  • Cancer

  • Respiratory Diseases

  • Other Diseases

• Prescription Outlook (Revenue, USD Billion, 2018 - 2028)

  • Prescription Medicines

  • Over-the-counter (OTC) Medicines

• Age Group Outlook (Revenue, USD Billion, 2018 - 2028)

  • Children & Adolescents

  • Adults

  • Geriatric

• Sales Channel Outlook (Revenue, USD Billion, 2018 - 2028)

  • Retail

  • Non-retail

• Regional Outlook (Revenue, USD Billion, 2018 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • France

    • Spain

    • Italy

  • Asia Pacific

    • Japan

    • China

    • India

  • Latin America

    • Brazil

    • Mexico

  • Middle East Africa (MEA)

    • South Africa

    • Saudi Arabia