Contract Research, Development, and Manufacturing (CRDMO): A One-Stop Integrated Solution With End-to-End Drug Research and Manufacturing Capabilities

The Global Contract Research Development and Manufacturing (CRDMO) Market pegged at US$ 168 billion (2021) is expected to witness a growth rate of ~7% from 2021 to 2031.

The growing trend of big pharma companies outsourcing to CRDMOs, growth of small molecules, increasing API complexities, need to optimize costs, regulatory expertise, lack of internal manufacturing capabilities among small biotech companies, the prevalence of chronic diseases, intensifying competition among pharmaceuticals & biopharmaceuticals companies, strong product pipelines, rising demand of precision medicine, industry consolidation and rising collaborations among CRO/CDMOs & pharmaceuticals companies are some of the pivotal factors propelling the growth of the Contract Research, Development, and Manufacturing (CRDMO) market. However, the capacity constraint is likely to hinder the growth of the market to a certain extent.

Clairvoyance Research conducted an in-depth market analysis study of the Global Contract Research, Development and Manufacturing (CRDMO) Market. The study comprehensively analyzes the market from different perspectives and provides granular insights on hot revenue pockets, headwinds & tailwinds impacting the market, quantitative (market size & forecasts), and qualitative analysis on different segments, key strategies, and competitive landscape.

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Growing Preference for Outsourcing of Manufacturing and Development Activities Set to Drive the Global Research, Contract Development, and Manufacturing (CRDMO) Market

The healthcare industry is undergoing a revolutionary change and is looking for new ways to boost productivity, quality & efficiency in drug development, production, and supply. The industry is evolving towards targeted drug delivery platforms, complex molecules such as biologics, and niche indications. But many companies lack in-house development, manufacturing capabilities, and expertise to drive their molecules through clinical development and to ensure accelerated speed to market. Therefore, many small- & large-scale companies are looking for strategic and integrated partners that can provide the necessary capacity and expertise. Pharmaceutical & biopharmaceutical companies are adopting the strategy of outsourcing development and manufacturing activities to focus on marketing, branding & making products viable. A CRDMO provides both CRO and CDMO service capabilities that cover the entire value chain of a drug’s life cycle from drug discovery to commercial production. CRDMO provides healthcare companies several strategic benefits such as:

• Fast track innovation
• One-stop-shop with wide service offerings
• Access to manufacturing technology
• Increased capacity with reducing infrastructure costs
• Access to additional expertise

"The CDMO industry is currently a very fragmented space. Going forward, the success of tomorrow's pharmaceutical industry will be hinged on consolidation and a combination of Contract Research Organization (CRO) and Contract Development Manufacturing Organization (CDMO) business model targeted towards creating a new global market standard based on the concept "CRDMO". The "R" of CRDMO brings the dimension of research in-house as the key metric to ensure a successful connection between R&D and Manufacturing, to become "one-stop shops" capable of supporting outsourcing projects across the whole drug development lifecycle, from discovery up to commercialization." 

- Senior Director, Leading API CDMO, United States

COVID-19 pandemic has also enhanced the position of the CRDMOs across the world and played a big role in making them an integral part of the healthcare ecosystem. COVID-19 has ushered a drive for outsourcing and has shown that it should be a core element of every company’s strategy. Drugs and vaccines in accelerated approval programs were outsourced to reduce the pressure for high volumes required at speed for global distribution.

“There are many reasons why outsourcing to CDMOs is becoming increasingly popular in the vaccine sector. CDMOs have the technical expertise, knowledge, and GMP facilities to deliver cost-effective development and manufacturing services. Outsourcing to a CDMO means you can expand your technical capabilities without the burden and associated risks of investing in expensive equipment.”

- Global Head of Sales, Leading CDMO, Germany

CRDMO Partnerships Becoming Increasingly Attractive Among Pharmaceutical & Biopharmaceutical Companies

The healthcare industry is witnessing more strategic partnerships between healthcare companies and CRDMOs. Rather than simple deals, it is more about a win-win for both participants with risk-sharing and long-term relationships. Apart from cost reduction, the major motivation for partnerships is the ability of CRDMOs to offer product quality, on-time delivery, regulatory compliance, safety, and value across all steps under one roof. Partnering with a CRDMO also helps a company that is shifting its portfolio away from a product that represents a large portion of revenue but is decreasing in value. It also allows the company to concentrate internal capacity on newer, higher-value products. CRDMOs are developing new service models focused on resource flexibility and shared risk. The partnerships may range from very basic supply agreements to complex investments in production facilities that the partners jointly build and run. Partnership strategies may include:

• Fee for Service
• Reserved Capacity (“Take or Pay”)
• Dedicated Suite (“Condo”)
• Joint Venture
• Global Enterprise

Personalized Medicine Fueling the CRDMO Market

The healthcare industry is constantly adapting to patient needs and global trends. Many healthcare companies have shifted their focus towards personalized medicine and are producing small volumes of medications that target a very small patient population. Personalized medicine is expected to revolutionize the healthcare and CRDMO industry. Companies are offering products tailored to individual patients based on the genome of the patient. It allows the companies to increase the quality of care rather than focusing on quantity. The active pharmaceutical ingredients (APIs) and formulations developed for personalized medicine are more complex and require specialized handling. It is not financially possible for pharmaceutical companies to build a new manufacturing plant for each small volume medication therefore, they outsource the service to third-party partners.

Capacity Constraints Due to High Demand – A Bottleneck for the Market

Capacity constraint is expected to restraint the growth of the CRDMO market to a certain extent. The demand for outsourcing CRDMO services is so extensive that healthcare companies are paying extra to wait in production lines years in advance. The average waiting time ranges from 16-24 months.

"Within a very short period we saw capacity dry up; whether it was internal capacity within the pharmaceutical company space or the CDMO industry available capacity and it was agnostic to scale. Therefore, having flexibility from your CDMO to adjust to growing demand will be essential in maintaining commercial volumes. So, ensuring the long-term availability of required capacity at the CDMO when negotiating a commercial supply agreement is critical.”

- Vice-President, Tier I CDMO, United States

Snapshot - Competitive Landscape

The CRDMO market is marked by the presence of prominent players such as Thermo Fisher Scientific, Catalent, Inc, Lonza, Recipharm AB, AbbVie Inc, Almac Group, Evonik, WuXi AppTec, Samsung Biologics, Corden Pharma International, Syneos Health, Parexel International Corporation, IQVIA, Labcorp Drug Development, Charles River, ICON plc, PPD Inc., Bioduro-Sundia, Eurofins Scientific, Curia Global, Inc., among others.

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