North America Biotechnology and Pharmaceutical Services Outsourcing Market Growth & Trends
The North America biotechnology and pharmaceutical services outsourcing market size is expected to reach USD 16.81 billion by 2030, according to a new report by Grand View Research, Inc., growing at a CAGR of 5.13% from 2024 to 2030. Increasing competition to launch novel molecules with better RoI is expected to heighten the demand for CRO service providers across the globe. Pharmaceutical companies face complexity in regulations along with increased research costs, creating a need for expertise in numerous portfolios and driving the need for outsourcing in the market. With increasing clinical trial privatization, there has been an increase in outsourcing functions to CROs and CDMOs to focus on core capabilities. Pharmaceutical and biotechnology companies have started outsourcing R&D activities, which are complex and need a strict timeline to follow up. A CRO’s function is to bring new products to the market as per the timeline given by the client. CROs have the required infrastructure and skilled expertise, which provides several advantages associated with cost, time, and efficiency. The cost saved helps in offering the best savings for sponsors and patients.
Drug discovery and development is an integral strategy adopted by pharmaceutical and biotechnology companies. An increase in the prevalence of chronic and long-term diseases led to a rise in the demand for extensive R&D investments in the drug development process. Growing clinical trial failure rates coupled with increasing drug development costs lead to huge losses in revenue for manufacturers. Setbacks faced in clinical studies have led smaller pharmaceutical companies to go bankrupt. Many private investors have been observed to withdraw venture capital support from startup drug companies, considering their investments would suffer if there were a disruption in the drug development process. To circumvent these situations and gain a substantial return on investment, pharmaceutical companies are now adopting computational biology-based predictive models over traditional methods of clinical trials, which are expected to drive market growth during the forecast period. Insights gained from subject-matter experts, R&D executives, and clinical professionals help a company save a large amount, which can be spent on R&D, thereby boosting demand for consulting services.
The healthcare outsourcing industry has recently witnessed a surge in mergers and acquisitions. The sector’s rapid growth and promising potential have attracted significant investment from pharmaceutical companies, biotech firms, & venture capitalists. As a result, companies seek to expand their portfolios and capabilities through strategic acquisitions to capitalize on emerging opportunities and strengthen their competitive position in the market. For instance, in May 2024, Sartorius AG announced a collaboration with NVIDIA to help the development of new therapies, leveraging NVIDIA’s AI-powered computing software and platform. Moreover, the complexity and high costs associated with developing therapeutics are leading to increased collaboration & consolidation within the industry. Mergers & acquisitions offer companies complementary technologies, expertise, and resources, enabling them to overcome development challenges, accelerate product development timelines, and enhance manufacturing capabilities.
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North America Biotechnology And Pharmaceutical Services Outsourcing Market Report highlights
- Based on service, the consulting segment held the largest revenue share in 2023. The large segment growth is owing to the growing adoption of consulting services to meet regulatory compliance, quality assurance, remediation challenges, and strategic consulting requirements by sponsors. Furthermore, regulatory consulting services are widely used owing to increasing fraud cases, discrepancies in Intellectual Property Rights (IPR), and rising technological innovation, which are some of the major challenges faced by pharmaceutical and biotechnology companies. Another factor driving the demand for consulting services is the consolidated nature of the market, which leads to an increase in the number of joint ventures, takeovers, acquisitions, and mergers. Such factors are anticipated to drive the market growth.
- Based on end use, the pharmaceutical companies segment held the largest revenue share of over 57.79% in 2023. The segment growth is owing to an increasing preference for outsourcing non-core activities such as clinical trials, data management, regulatory compliance, and manufacturing to CROs and CMOs among pharmaceutical companies is anticipated to boost segment revenue growth. Outsourcing to CROs and CMOs provides pharmaceutical companies with cost-effective solutions compared to maintaining extensive in-house capabilities.
- The U.S. dominated the biotechnology and pharmaceutical services outsourcing market with a share of 87.37% in 2023. The country’s revenue growth is owing to high R&D spending on clinical trials, which is another major factor expected to fuel market growth. For instance, in October 2021, the U.S. FDA approved 11 new clinical trial research, resulting in over USD 25 million in funding over the next four years. These grants aim to support the development of new medical products specifically for treating rare diseases. The growing presence of these companies expanding their manufacturing capabilities to cater to the rising demand for pharmaceuticals is anticipated to propel market growth.
North America Biotechnology And Pharmaceutical Services Outsourcing Market Segmentation
Grand View Research has segmented the North America biotechnology and pharmaceutical services outsourcing market based on service, end use, and region:
North America Biotechnology And Pharmaceutical Service Outlook (Revenue, USD Million, 2018 – 2030)
- Consulting
- Regulatory Consulting
- Clinical Development Consulting
- Strategic Planning & Business Development Consulting
- Quality Management Systems consulting
- Others
- Regulatory Affairs
- Legal Representation
- Regulatory Writing & Publishing
- Product Registration & Clinical Trial Applications
- Regulatory Submissions
- Regulatory Operations
- Others
- Product Design & Development
- Research, Strategy, & Concept Generation
- Concept & Requirements Development
- Detailed Design & Process Development
- Design Verification & Validation
- Process Validation & Manufacturing Transfer
- Production & Commercial Support
- Auditing and Assessment
- General Auditing
- Gap Assessments
- Due Diligence Assessments
- Mock Audits/Inspections
- Inspection/Audit Management and Support
- Others
- Product Maintenance
- Training & Education
- Others
North America Biotechnology And Pharmaceutical End Use Outlook (Revenue, USD Million, 2018 – 2030)
- Pharmaceutical Companies
- Biotech Companies
North America Biotechnology And Pharmaceutical Country Outlook (Revenue, USD Million, 2018 – 2030)
- U.S.
- Canada
- Mexico
- Puerto Rico
List of Key Players in the North America Biotechnology And Pharmaceutical Services Outsourcing Market
- Parexel International Corporation
- The Quantic Group
- IQVIA
- Lachman Consultant Services, Inc.
- GMP Pharmaceuticals Pty Ltd.
- LabCorp
- Charles River Laboratories
- ICON plc.
- Syneos Health
- Lonza
- Catalent Inc.
- Samsung Biologics
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