Asia-Pacific Pharmaceutical Contract Manufacturing Organization Market Size (2024 - 2029)

APAC Pharmaceutical Contract Manufacturing Market Analysis

The Asia-Pacific Pharmaceutical Contract Manufacturing Organization Market size is estimated at USD 55.15 billion in 2024, and is expected to reach USD 83.85 billion by 2029, growing at a CAGR of 8.74% during the forecast period (2024-2029).

China is a country with low labor wages, which alone can lower the manufacturing costs of the pharmaceutical companies by as much as 30%. Along with it, low capital and overhead costs (compared to that of the United States and Europe), tax incentives, and undervalued currency combine to provide a significant cost advantage for pharmaceutical companies outsourcing to China.

• Another factor driving the pharmaceutical CMO market in China is the country's Western-trained skilled workers. Majority of the workers who are trained in Western countries return to China to find work because of strict immigration policies an d significant unemployment among the European and American pharmaceutical workers.
• India is also taking advantage of the growth in the domestic CMO market, encouraging the Japanese pharmaceutical industries to setup their locations in the country, either wholly owned or in partnership with Indian companies.Additionally, India has until now allowed 100% FDI through the automatic route. This 100% FDI under the automatic route has been allowed in contract manufacturing to give a big boost to domestic manufacturing.
• The CMO market in Japan is still immature. However, the country witnessed incremental growth over the past few years. The Japanese CMO market witnessed a growth of about 30%, following the recognition to separate manufacturing and sales by the Pharmaceutical Affairs Act. The growth trend has been continuing ever since. The number of CMO manufacturers of significant size in Japan is low and includes players, like Bushu Pharmaceuticals, Nipro Pharma, and CMIC.
• With extensive governmental reforms in drug pricing, structural changes, and unpredictability in reimbursement and pricing decisions, many pharmaceutical companies in Australia are being challenged. However, the country is geographically well-placed in relation to pharmaceutical exports, owing to its proximity to the emerging markets of South Asia.
• The recent medical outbreak of COVID-19 has its epicenter in Wuhan, a Chinese city that was once known for its heavy industry and steel and was poised to become a burgeoning center for bio- pharmaceutical manufacturing. Such outbreaks may lead to the disruption of drug supply and manufacturers are required to notify the US Food and Drug Administration when that happens. As the outbreak becomes more widespread, it becomes a burden for pharmaceutical plants around the world to maintain the inventory required for manufacturing, as China is a major supplier of raw materials.

APAC Pharmaceutical Contract Manufacturing Industry Segmentation

Contract manufacturing is a form of outsourcing where a manufacturer enters a formal agreement with another manufacturing firm for its parts, products, or components. The former manufacturer uses these in its own manufacturing process for manufacturing its products. The scope of the market is comprehensive and is limited to Asia-Pacific.