Active Pharmaceutical Ingredient CDMO Market Strengthened by Strategic Partnerships

The global active pharmaceutical ingredient (API) contract development and manufacturing organization (CDMO) market was valued at USD 118.6 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 7.4% from 2024 to 2030. This growth is driven by several factors, including increased investments in drug research and development, rising rates of chronic diseases, the growing importance of generics, and increasing consumption of biopharmaceuticals. Additionally, the expanding adoption of outsourcing services for development and manufacturing, as a cost-saving strategy, is further propelling market growth.

The COVID-19 pandemic had a notable impact on the API supply chain, causing disruptions in raw material supply, shipping delays, and increased costs. Despite these challenges, the heightened demand for new treatment options and higher approval rates for new drugs helped sustain market growth during the pandemic. The increasing prevalence of chronic illnesses such as cancer and heart disease continues to drive demand for innovative treatments, which in turn fuels the need for new APIs and supports market expansion in the post-pandemic era.

Moreover, growing demand for generic drugs is a significant contributor to overall market growth. Generics, introduced after the expiration of branded drug patents, are priced more affordably, leading to wider adoption. Countries like China and India have emerged as key hubs for generic drug development and manufacturing. According to Healthline, China holds a dominant position in supplying generics to the U.S., with control over critical pharmaceutical supplies and companies. Healthline also noted that the U.S. generic drug market has largely shifted overseas, especially to China, leaving few domestic manufacturers.

For example, as of 2022, an estimated 91% of prescriptions in the U.S. were filled with generic drugs, and the FDA has approved over 32,000 generic drugs to date. Similarly, in 2020, the FDA’s generic drug program approved or tentatively approved 948 Abbreviated New Drug Applications (ANDAs), including 50 original applications. In total, 72 first generic drugs were approved that year. Generic drugs typically cost 30–90% less than branded drugs due to the significantly lower development and commercialization costs.

Additionally, pharmaceutical companies have steadily increased their reliance on outsourcing for discovery, development, and manufacturing over the past two decades. However, outsourcing practices vary across the biopharmaceutical sector. Small biotechnology firms, in particular, often depend on CDMOs to manufacture their development-stage products as they advance through the pipeline.

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Regional Insights

In 2023, the Asia Pacific region led the global active pharmaceutical ingredient CDMO market, accounting for a 37.68% revenue share. This regional dominance is attributed to factors such as improved regulatory frameworks, significant cost-saving opportunities, increased drug development complexity, and strong drug pipelines. Furthermore, the region benefits from a highly skilled workforce available at lower labor costs compared to developed markets like the U.S., which is expected to further support market growth.

Key Players in the Active Pharmaceutical Ingredient CDMO Market

The following companies are recognized as leading players in the API CDMO market, collectively holding significant market shares and influencing industry trends. Their financial performance, strategic initiatives, and product portfolios play a key role in shaping the global supply network: