Overall growth in the market for pharmaceutical contract research and manufacturing is strong although growth in established markets erodes at the expense of emerging markets.
A recent analysis of the Chemical Pharmaceutical Generic Association (CPA), which represents Italian generic API manufacturers, points to strong growth for the pharmaceutical contract research and manufacturing services (PCRAMS) industry. The overall world PCRAMS industry, which includes revenues from both contract research organizations (CROs) and contract manufacturing organizations (CMOs), was valued at $72 billion in 2012, up from $21 billion in 2000. Contract manufacturing accounted for two-thirds of the 2012 market, or $47 billion, and contract research the remaining $25 billion, according to the CPA report, The World PCRAMS Industry.
Of the global contract manufacturing business, contract manufacturing of APIs and intermediates accounted for the largest sector for contract manufacturing at 64% or $30 billion. Contract manufacturing of finished dosage forms accounted for 9.6% or $4.5 billion, according to the CPA analysis. Development of finished dosage forms accounts for approximately 15% of the contract manufacturing market, or $7 billion, and packaging/labeling and other services represent the remainder or $5.5 billion.
Of the market for contract manufacturing of APIs and intermediates, custom synthesis (mainly focused on new, branded APIs) accounts for 40% or $12 billion, and toll manufacturing for the remaining 60% or $18 billion. For purposes of the analysis, “custom synthesis” denotes when a company outsources the manufacturing of an intermediate or API without indicating the operational modalities. “Toll manufacturing” denotes when the production of the intermediate or API is carried out by the external suppler according to operational modalities established by the sponsor company.
Overall, the global PCRAMS market is forecast to grow at an average of 13.6% yearly over the next five years to reach $136 billion by 2017 from $72 billion in 2012, according to the CPA analysis. The global CRO business is expected to increase from $25 billion to $43 billion in 2017, representing average yearly growth of 11.4%, according to CPA. The global CMO business is projected to increase from $47 billion in 2012 to $93 billion in 2017, an average of 14.6% in yearly growth, according to CPA estimates.
Asia Pacific will show the strongest growth in the global PCRAMS market, with particularly strong growth for India and China. The share held by India in the world PCRAMS market will nearly triple in the next five years, and by 2017, India will be the second largest market for PCRAMS, accounting for 21.3% of the global market compared to only 8.3% in 2012. India will only be surpassed by the United States, which is expected to hold almost 25% (24.9%) of the global PCRAMS market in 2017 compared to a share of 33.7% in 2012. Just as the US market’s share in the global PCRAMS market will decline so will the share of Western Europe from 25.0% in 2012 to 17.1% in 2017. China’s share of the global PCRAMS market will increase from 12.2% in 2012 to 19.2% by 2017, according to the CPA analysis.