Formulation Development Outsourcing Market Size, Share & Trends Analysis Report By Service (Performulation, Formulation Development), By Formulation (Oral, Injectable), By Therapeutic area, By Region, And Segment Forecast, 2023 - 2030

Report Overview

The global formulation development outsourcing market size was valued at USD 35.1 billion in 2022 and is anticipated to exhibit a compound annual growth rate (CAGR) of 7.1% from 2023 to 2030. One of the major factors driving the demand for formulation development is the growing demand for new drugs owing to the high burden of chronic and infectious diseases. Apart from this, patent expirations and a high focus on developing poorly water-soluble compounds to improve bioavailability. Furthermore, the growing demand for overcoming the risk associated with development is further contributing to market growth.

As per the report by IQVIA, in the developed countries the demand for generics and biosimilar is expected to grow, which is improving the medicine spending in these countries. This is likely to improve the demand for formulation development of generics and biosimilar post-pandemic. Furthermore, despite the COVID-19 pandemic's immediate concerns, the pharmaceutical industry's quest for innovative and effective therapeutics continues to drive longer-term growth, and clinical research for new and existing COVID-19 therapies continue to expand.

Pharmaceutical organizations are increasingly focusing on their R&D activities to stay competitive and flexible. As per the estimates of Evaluate Pharma, pharmaceutical R&D spending accounted for USD 182 billion in 2018, whereas in 2021 it increased by 16.5% and accounted for USD 212 billion. The growing R&D spending is expected to improve the demand. Formulation development services are majorly adopted by small and medium-sized pharmaceutical companies that lack the necessary resources for formulation development.

The significant number of small and medium-sized pharmaceutical companies globally is anticipated to enhance the market growth. Pharmaceutical researchers are now developing new technologies for formulation development. For instance, in June 2021, Taylor France online published a paper regarding the use of 3D printing for the formulation development of personalized medicines.

COVID-19 vaccines are gaining noteworthy importance even after the decline in COVID-19 cases. The fear of the emergence of new variants of COVID-19 is increasing the demand for COVID-19 vaccines. A significant number of drug manufacturers are developing COVID-19 vaccines. As of May 31st, 2022, over 1,112 vaccines were under development for COVID-19 according to Clinicaltrials.gov. This is likely to improve the demand for outsourcing formulation development services for COVID-19 vaccines. Furthermore, to prepare for future pandemic, public organizations are providing a significant amount of funding for drug development. For instance, in March 2022, the United States Agency for International Development (USAID) announced USD 150 million in funding for drug development. Such initiatives are likely to benefit the market's growth.

Service Insights

The formulation development segment dominated the market and accounted for the largest revenue share of 76.7% in 2022. Formulation development is required in each stage of clinical trials, and over the years, the number of clinical studies has increased significantly. According to ClinicalTrials.gov, there were over 293,251 research studies registered in 2019, while the number of registered studies climbed to 362,503 in 2021. The growing number of clinical studies is likely to have a positive impact on the market for formulation development outsourcing.

In February 2021, Outsourced Pharma published a survey regarding the percentage of activities outsourced by sterile injectable product manufacturers. The survey stated that over 49% of respondents outsourced formulation support services, 44% outsourced formulation optimization activities, and 52.0% outsourced process development activities. Furthermore, the survey also reported that only 45% of respondents opted for the outsourcing of pre-formulation support activities. A significant number of manufacturers outsourcing formulation development activities are likely to have a positive impact on the industry. The high prevalence of chronic diseases such as cancer, diabetes, HIV, and other diseases is further contributing to the demand for developing innovative therapies, which is further promoting the demand.

Formulation Insights

The oral segment dominated the industry and accounted for the maximum revenue share of 63.5% in 2022. Oral formulations include tablets, capsules, syrups, and powders, among others. Oral formulations have gained a significant share in the market as these formulations are majorly used in treating some common diseases such as migraines, fever, infectious diseases, and diabetes, among others. Oral formulations are self-administering and do not require a trained physician for drug administration, which is one of the major reasons for the high acceptance of oral formulations. Moreover, these formulations also have more flexibility in formulation design as compared to others, which further improves their demand in the market for formulation development outsourcing.

The injectable formulation segment is expected to rise with the fastest CAGR of 7.7% in the market over the forecast period. The high bioavailability of injectable formulations leading to the immediate onset of action is the prime factor for its fastest growth. Apart from this, injectable formulations are preferred if the drugs are poorly absorbed. Moreover, this form of formulation is also primarily preferred in cases of medical emergencies, which is further driving the segment.

Therapeutic Area Insights

Based on the therapeutic area, the oncology segment dominated the market and gained the largest revenue share of 24.8% in 2022. This segment is also expected to witness the fastest CAGR over the forecast period. Cancer is one of the major causes of death worldwide, which has significantly led to the demand for new cancer therapies. According to ClinicalTrials.gov, as of June 6, 2022, over 29,662 studies were in the active stage for cancer. The high number of clinical studies for cancer is likely to improve the demand for outsourcing formulation development services for cancer treatment.

Furthermore, a significant number of organizations are providing research funding for cancer. For instance, the World Cancer Research Fund International provides over GBP 300,000 for over three years for investigator-initiated trials. The NCI also provides a huge amount of funding for cancer research. For instance, in 2020, the estimated research funding for cancer accounted for USD 5370.1 million. Such initiatives by organizations are likely to have a positive impact on the industry.

Regional Insights

Asia Pacific dominated the market and held the largest revenue share of 39.3% in 2022. The region is also expected to witness the fastest CAGR of 8.0% over the forecast. The presence of a significant number of CROs offering cost-effective formulation developing services is one of the major reasons for the largest market share. Furthermore, public organizations are taking initiatives to reduce the time of drug approval in the region. For instance, in October 2021, the Department of Pharmaceuticals (India) drafted new rules to reduce the time required for the approval of innovative products by at least 50% within the next two years, to improve the R&D activities in the country. Such initiatives are likely to improve the demand for formulation services in the country.

The North America held a significant share of 26.5% in 2022. For instance, a significant number of clinical trials are conducted in the U.S. For instance, as of June 2022, over 33% of global clinical trials were recruited in the U.S. alone. Apart from this, public organizations in the U.S. also support the research through funding. For instance, the estimated research funding for NCI accounted for USD 6,440.4 million in 2020. The abovementioned factors are likely to promote the demand in the region.

Key Companies & Market Share Insights

To remain competitive, CROs around the world are expanding, acquiring, and forming partnerships, among other things. For instance, in June 2022, Lonza inaugurated a new R&D facility in Bend dedicated to supporting early-phase clinical trials. Similarly, in April 2022, Labcorp collaborated with a developer of cell and gene therapy technologies, Xcell Biosciences, to expand its research capabilities in cell and gene therapies. According to the agreement, Labcorp and Xcellbio will collaborate on projects aimed at improving the efficacy and safety of cell and gene therapies. Some of the prominent players in the global formulation development outsourcing market include:

• SGS S.A.

• Intertek Group plc

• Recipharm

• Lonza

• Charles River Laboratories International, Inc.

• Eurofins Scientific SE

• Element

• Labcorp

• Thermo Fisher Scientific, Inc. (Patheon)

• Catalent Inc.

Formulation Development Outsourcing Market Report Scope

Global Formulation Development Outsourcing Market Report Segmentation

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 - 2030. For this study, Grand View Research has segmented the global formulation development outsourcing market report based on services, formulation, therapeutic area, and region:

• Service Outlook (Revenue, USD Million, 2018 - 2030)

  • Preformulation

  • Formulation Development

• Formulation Outlook (Revenue, USD Million, 2018 - 2030)

  • Oral

  • Injectable

  • Topical

  • Others

• Therapeutic Area Outlook (Revenue, USD Million, 2018 - 2030)

  • Oncology

  • Infectious disease

  • Neurology

  • Hematology

  • Respiratory

  • Cardiovascular

  • Dermatology

  • Others

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • Italy

    • France

    • Spain

    • Russia

    • Turkey

    • Netherlands

    • Switzerland

    • Denmark

    • Sweden

    • Norway

  • Asia Pacific

    • China

    • Japan

    • India

    • Australia

    • South Korea

    • Indonesia

    • Malaysia

    • Singapore

    • Thailand

    • Taiwan

  • Latin America

    • Mexico

    • Brazil

    • Argentina

    • Colombia

    • Chile

  • Middle East & Africa

    • South Africa

    • Saudi Arabia

    • UAE

    • Kuwait

    • Egypt

    • Israel