Healthcare Contract Manufacturing Market – Overview
Outsourcing has become a key business strategy and various industries including healthcare are aiming to capitalize on it. Over the years, the healthcare contract manufacturing industry has shown significant progress. Healthcare contract manufacturing refers to a set up where a contract manufacturing organization (CMO) assists companies in the healthcare industry managing their comprehensive operations on a contract basis.
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CMOs handle operations such as drug development, formulation development, stability studies, drug manufacturing and more. The competitive nature of the global healthcare sector has paved way for the growth of the healthcare contract manufacturing market. According to a research report by Market Research Future (MRFR), the global healthcare contract manufacturing market reached a valuation of USD 129.91 billion in 2016. The market is anticipated to witness a CAGR of 9.86 % during the forecast period (2017-2023).
With contract manufacturing, clients can focus on other core-competencies and important aspects, without changing their existing infrastructure and technical expertise. Companies are rapidly outsourcing healthcare manufacturing activities in order to cut down manufacturing costs, while maintaining the quality.
The global healthcare contract manufacturing market is profoundly stimulated by factors such as rising health-care costs, growing research and development costs of drugs, rising patent influx, and increasing need for drug and medical instruments. However, patent expiration is likely to bring down sales and affect the market. According to MRFR, the period of 2016-2023 will witness sales loss of roughly USD 75 billion owing to patent expiration. Generics too pose a considerable threat to the healthcare contract manufacturing market. Generics will affect the drug sales of around USD 60 billion during the forecast period. Other constraints for the global healthcare contract manufacturing market include supply chain complications and issues related to control of third party.
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The global healthcare contract manufacturing market has been segmented into type, industry and service type.
Based on type, it is segmented into non-sterile and sterile. Based on industry, it is segmented into pharmaceutical, biopharmaceutical and medical device.
Based on service type, it is segmented into pharmaceutical contract manufacturing services and medical device contract manufacturing services.
On the basis of region, the global healthcare contract manufacturing market has been segmented into Americas, Europe, Asia-Pacific and the Middle East & Africa. The Americas account for the largest share of the market. The American healthcare contract manufacturing market is thriving due to the strong economic conditions and presence of robust manufacturing capabilities in the region. Europe stands second, followed by Asia-Pacific and the Middle East and Africa. Europe holds the second position owing to huge expenditure on healthcare by the government. The economic upsurge in Asia Pacific has favored the growth of the market in the region and it is the fastest-growing market for healthcare contract manufacturing. Meanwhile, lack of adequate medical facilities in the MEA is undermining the growth of the market in the region. However, the region has significant growth potential with countries such as Qatar and Kuwait focusing on development of the healthcare sector.
- In May, 2018, Vivimed Labs Ltd., a pharmaceuticals firm announced the acquisition of Hungary-based contract development and manufacturing company, SONEAS by its bulk drug business UQUIFA. According to Vivimed, the procurement is a step towards expansion into contract development and manufacturing.
- Integer Holdings Corp., a medical devices contract manufacturer has signed off a deal to sell its advanced surgical and orthopedics product to MedPlast LLC for 600 million dollars. The acquisition will broaden the horizons of both the companies.
- Norman Noble Inc., a contract manufacturer of generation medical implants, has now added additive manufacturing, as a part of its capabilities. They are also trying to develop the production of additive manufactured parts from magnesium and nitinol.
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