Market Trends of Healthcare Contract Manufacturing Organization Industry
The Finished Dosage Formulation (FDF) Manufacturing Segment is Expected to Hold a Significant Share of the Market During the Forecast Period
Advances in pharmaceuticals have led to more complex drug formulations, including controlled-release, biologics, and specialty dosage forms, which creates the need for expensive processes such as contract manufacturing. In addition, pharmaceutical companies increasingly outsource non-core activities, including formulation development and manufacturing, to specialized CMOs, allowing them to focus on core R&D and commercialization efforts.
The FDF manufacturing segment is anticipated to grow owing to an increase in patent expiration and increasing funding in R&D. When a patent expires, it opens the door for generic drug manufacturers to enter the market. Generic manufacturers often partner with CMOs to produce their versions of the formerly patented drugs. For instance, Abbvie Inc. reported that the blockbuster drug Humira would lose exclusivity by the end of 2023. Similarly, Bristol Myers Squibb's drug Revlimid is expected to lose its patent by the end of 2025. Hence, CMOs can leverage their existing manufacturing facilities and expertise to produce generic versions of drugs that have lost patent protection. This allows for efficient use of their resources and facilities.
Additionally, strategic partnerships and agreements between the CMO and pharmaceutical companies for manufacturing the FDF are expected to contribute to the segment's growth. For instance, in March 2022, Nutra Pharma Corporation, a biotechnology firm focused on developing and marketing treatments for MS, HIV, and pain, collaborated with Avini Health to serve as a product formulator and contract manufacturer.
Hence, increasing patent expiration and growing partnerships and collaboration are expected to boost the segment's growth during the forecast period.
North America is Expected to Hold a Significant Share in the Market During the Forecast Period
The North American contract manufacturing organizations (CMOs) have evolved from an initial offering of essential manufacturing services to a wide range of services to meet the market and outsourcer demand. Steady growth in the US pharmaceutical industry and increasing outsourcing by major pharmaceutical companies focusing on their core competencies to improve profit margins are driving the country's market.
Partnering with CMOs allows companies to expedite developing and producing pharmaceuticals and medical devices, potentially bringing products to market faster. In addition, collaboration with CMOs provides pharmaceutical and healthcare companies access to specialized manufacturing expertise and technologies that may not be available in-house. Hence, the collaboration agreement between pharmaceutical companies and CMOs is increasing. For instance, in January 2023, Catalent announced that it had signed a development and license agreement with Ethicann Pharmaceuticals Inc., an American specialty pharmaceutical company specializing in creating high-value cannabinoid drug therapies using Zydisorally disintegrating tablet (ODT) technology, to advance Ethicann's clinical drug pipeline. as per the agreement, Catalent would use its Zydis technology to develop pharmaceutical products containing cannabidiol (CBD) and tetrahydrocannabinol (THC) for Ethicann's use in clinical trials for various conditions. Additionally, in May 2023, Moderna Inc. announced a long-term agreement with Ontario-based Novocol Pharma to perform aseptic fill-finish, labeling, and packaging of mRNA respiratory vaccines expected to be produced in Canada.
Furthermore, increasing investment in developing and expanding the contract manufacturing facilities is expected to contribute to the market's growth during the forecast period. CMOs have increasingly adopted continuous manufacturing for biologics production following FDA approval. For instance, in June 2022, Agilent Technologies and Abzena expanded their continuous manufacturing capabilities to manufacture nucleic acid therapeutics and biologics drugs in the United States.
Hence, increasing R&D in pharmaceuticals and collaborative agreements with CMOs is expected to contribute to the market's growth during the forecast period.
