USD 3.6 Billion
Drug Discovery Outsourcing Market Size, Share, and Growth Analysis
Drug Discovery Outsourcing Market By Drug Type (Small Molecules, Large Molecules), By Therapeutics Area (Oncology, Diabetes), By End User, (Pharmaceutical & Biotechnology Companies, Academic Institutes), By Region -Industry Forecast 2024-2031
Report ID:
SQMIG35C2011 |
Region:
Global |
Published Date: October, 2024
Pages:
242
|Tables:
128
|Figures:
78
Format -
Drug Discovery Outsourcing Market Insights
Drug Discovery Outsourcing Market size was valued at USD 3.6 Billion in 2023 and is poised to grow from USD 3.86 Billion in 2024 to USD 6.75 Billion by 2032, growing at a CAGR of 7.2% during the forecast period (2025-2032).
High outsourcing costs and stringent government regulations are major barriers to the drug discovery outsourcing market growth. In contrast, cancer, genetic diseases, chronic diseases, more elderly people, better legal environment, cheaper skilled labor with higher levels of information are expected in developing countries will provide drug discovery outsourcing market opportunities for growth during the forecast period.
According to a survey conducted by Life Science Strategy Group of 120 clinical development decision-makers in the U. S., Europe, and China, industry professionals are undertaking major strategic changes to maintain their drug discovery outsourcing market share in the unpredictable scenario post COVID-19 pandemic. The pharmaceutical industry has seen a lot of change over the last two decades, in terms of changes in biopharmaceutical formulations, cancellation of patents and some decreases in big drugs. Breaking down the various stages of drug discovery, such as hit confirmation, lead generation, lead optimization and high-speed testing will allow players to specialize in their core services.
The drug discovery outsourcing market is growing exponentially, with the rise of pharmaceuticals and the need for cost-effective solutions in pharmaceutical biotechnology companies driving the expansion of this drug discovery outsourcing market. Several factors, such as increasing R&D costs, the need to develop more efficient and unique drug discovery methods, and advanced technologies such as artificial intelligence (AI) and the increased use of learning in pharmaceutical research has moved pharmaceutical companies from internal R&D programs to outsourcing services.
US Drug Discovery Outsourcing Market is poised to grow at a sustainable CAGR for the next forecast year.
Market snapshot - 2025-2032
Global Market Size
Largest Segment
Small Molecules
Fastest Growth
Large Molecules
Growth Rate
7.2% CAGR
Global Drug Discovery Outsourcing Market ($ Bn)
Country Share for North America Region (%)
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Drug Discovery Outsourcing Market Segments Analysis
Drug Discovery Outsourcing Market is segmented by Workflow, Therapeutics Area, Drug Type, Service Type, End User, and region. Based on Workflow, the market is segmented into Target Identification & Screening, Target Validation & Functional Informatics, Lead Identification & Candidate Optimization, Preclinical Development, and Other Associated Workflow. Based on Therapeutics Area, the market is segmented into Respiratory system, Pain and Anesthesia, Oncology, Ophthalmology, Hematology, Cardiovascular, Endocrine, Gastrointestinal, Immunomodulation, Anti-infective, Central Nervous System, Dermatology, and Genitourinary System. Based on Drug Type, the market is segmented into Small Molecules, Large Molecules (Biopharmaceuticals). Based on Service Type, the market is segmented into Chemistry Services, Biology Services. Based on End User, the market is segmented into Pharmaceutical & Biotechnology companies, Academic Institutes, and Others. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & and Africa.
Drug Discovery Outsourcing Market Analysis by Drug Type
Based on drug type, the small molecules segment accounted for the largest drug discovery outsourcing market share in 2023 in terms of revenue. Small molecules have a high likelihood of successfully traversing cell membranes to access intracellular pathways due to their low molecular weight. This class of compounds accounted for greater than 75% of the market demand in 2023. Several reasons exist for the dominance of small molecules in drug discovery. The pharma industry has long been capable of producing small molecule-based drugs to good effect across a wide range of therapeutic indications.
The large molecules segment is poised to witness the fastest growth in the drug discovery outsourcing industry during the forecast period. Biologics are large molecules, and they come from living organisms which include a large variety of substances such as peptides, proteins, antibodies, nucleic acids and macromolecules. Several factors have fueled the rise of large molecules. Advancements in genetic engineering tools and biotechnologies have significantly simplified the steps needed to build and produce these large molecules. Recombinant DNA technology and monoclonal antibody production are a few techniques that have ushered in a paradigm shift in the biologics space leading to remarkably targeted therapies.
Drug Discovery Outsourcing Market Analysis by Therapeutics Area
In 2023, the drug discovery outsourcing market was dominated by the oncology segment. This majorly is attributed to the rising drug discovery activities pertaining to cancer. Growing numbers of cancer cases in the public has helped encourage further development from the oncology sector. The International Agency for Research on Cancer estimates that the world will record 28.4 million cases of cancer by 2040. Antimicrobial resistance is projected to become a global crisis with its soaring rate of emergence and spread resulting in a high economic burden. Lung cancer, breast cancer, prostate cancer and colorectal cancer are among the most common cancers. Thus, the growing incidence of different cancers is anticipated to dominate the drug discovery outsourcing market share throughout the coming years.
As per drug discovery outsourcing market forecast, diabetes is projected to be one of the most rapidly growing segments. This segment is witnessing a boost owing to the increasing number of diabetes patients among the population as lifestyles have shifted towards more and more convenience with people eating unhealthy foods. The International Diabetes Federation estimates that by 2045, there will be approximately 783 million people worldwide suffering from diabetes. Lastly, there are 1.2 million children and teens living with type 1 diabetes. Diabetes is indeed the number one reason for strokes, kidney failure and even blindness.
Global Drug Discovery Outsourcing Market By Drug Type (%)
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Drug Discovery Outsourcing Market Regional Insights
As per the drug discovery outsourcing market outlook, North America dominated the market and had the largest share of over 35.5% in global revenue. Regional market growth can be attributed to technological advances, well-established research infrastructure & presence of key players, and more investment in drug discovery. The industry is emerging as a destination for drug discovery outsourcing due to skilled manpower, low costs, favorable regulatory environment and quality of information. Chronic disease affects an estimated 60% of the population, with chronic conditions comprising one or more such diseases in approximately half the US population. The rising awareness about the biologics is fueling demand for innovative drugs in the region, thereby supporting North America drug discovery outsourcing market growth.
According to drug discovery outsourcing market analysis, the Asia Pacific region is witnessing the fastest growth in the market. Owing to the availability of skilled manpower, lower cost, favorable regulatory environment and quality data, the region is fast emerging as a centre for outsourcing drug development activities. As the second largest market in the world, Japan is expected to provide strong opportunities for CROs, thereby driving the market. The revised pharmaceutical regulations support research is carried out in neurology and oncology in Japan, which is expected to boost the market in this country. The Japan Agency for Medical Research and Development (AMED) was created to manage data on research and clinical trials, improve R&D processes, and promote international strategies.
Global Drug Discovery Outsourcing Market By Geography
- Largest
- Fastest
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Drug Discovery Outsourcing Market Dynamics
Drug Discovery Outsourcing Market Drivers
Cost Efficiency and Resource Efficiency
- Increasing pressure to reduce pharmaceutical costs is a major drug discovery outsourcing market trend. Pharmaceutical companies are under constant pressure to streamline their operations and increase their investments in research and development (R&D). By outsourcing drug discovery processes such as target identification, screening, lead optimization, and preclinical testing, pharmaceutical companies can significantly reduce inventory costs, labor costs, and overhead costs. Additionally, it enables contract research organizations (CROs) resources with the latest technology, state-of-the-art equipment and specialized expertise to accelerate drug discovery. This model provides significant, sustainable operational and financial benefits for acceptance in the biopharmaceutical industry.
Advances in Biotechnology and R&D Needs
- Another major factor is the continuous advancement in biotechnology and the growing demand for new treatments. Increasingly complex diseases and the demand for personalized medicine require advanced drug discovery methods that require specialized expertise. Drug discovery outsourcing provides companies with sophisticated technology and scientific advances in genomics, proteomics and bioinformatics without investing in expensive equipment and knowledge. Advances in AI and machine learning for drug discovery are providing vehicles for outsourcing services to organizations.
Drug Discovery Outsourcing Market Restraints
Legal Challenges and Compliance Risks
- The outsourcing of drug discovery systems carries inherent regulatory and compliance risks, which may restrain market growth. Different countries have different regulatory requirements for clinical trials, data management and product development. Ensuring that exporters adhere to stringent regulations and standards, such as Good Laboratory Practices (GLP) and Good Clinical Practices (GCP), is important to avoid regulatory problems and ensure that medicines finding the system is better by incorrect operation. Furthermore, navigating these regulatory hurdles in different countries can be complex and time-consuming, potentially for companies some are discouraged from accepting outsourcing.
Intellectual Property (IP) Concerns
- Another important mandate in the drug discovery outsourcing market is the risk of intellectual property (IP) theft. Drug discovery is a highly competitive industry, the potential for IP theft when proprietary information is shared with external actors is a major concern. Pharmaceutical companies may not need to be associated with drug discovery programs for highly sensitive and innovative technologies. The lack of a strong legal framework further exacerbates these issues. As a result, pharmaceutical companies are often uncomfortable sharing their research data and progress with external partners, potentially hampering the development of drug discovery outsourcing market.
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Drug Discovery Outsourcing Market Competitive Landscape
The competitive environment in the drug discovery outsourcing industry is evolving rapidly, with key players leveraging technological advances, strategic collaboration and regional expansion to stay ahead. Increasing demand for specialized services, especially in the biological and AI-driven discovery sectors, as well as growing markets. The market is also characterized by increasing competition where cost is a key factor characterized by established factor CROs such as LabCorp, Charles River, WuXi AppTec continues to lead the drug discovery outsourcing market. But emerging players and local areas gain momentum by providing pricing, specialized services and cost-effective talent pools. Continued trend in integration driven on acquisitions and partnerships is likely to shape the future growth of the market, offering more integrated and innovative solutions for pharmaceutical companies operating.
Top Players in Drug Discovery Outsourcing Market
- Charles River Laboratories International, Inc.
- WuXi AppTec Co., Ltd.
- Laboratory Corporation of America Holdings (LabCorp)
- Evotec SE
- Covance Inc.
- Thermo Fisher Scientific Inc.
- Eurofins Scientific
- Pharmaron Beijing Co., Ltd.
- Syngene International Ltd.
- Genscript Biotech Corporation
- ChemPartner
- Jubilant Biosys Ltd.
- ICON plc
- QuintilesIMS (IQVIA)
- Cambrex Corporation
- Viva Biotech
- Domainex Ltd.
- Curia Global, Inc. (formerly Albany Molecular Research, Inc.)
- Tecan Group Ltd.
- Shanghai Medicilon Inc.
Drug Discovery Outsourcing Market Recent Developments
- November 2022: Sanofi & Insilico Medicine, a clinical biotech company, signed a $120 billion drug development agreement. Under the deal, Sanofi used Insilico's AI platform Pharma.ai to provide medicine that has advanced on six more goals.
- October 2022: Partner of Amphista Therapeutics, a biotechnology company focused on drug discovery that uses targeted protein degradation (TPD), and clinical pharmaceutical project. Domainex collaborated to provide integrated drug discovery services for its research programs.
- In January 2022, Shanghai Fosun Pharmaceutical (Group) Co. Ltd. and Insilico Medicine, an artificial intelligence (AI)-powered drug discovery and development company, collaborated to advance the discovery and development of targeted drugs. Several objectives targeted globally using AI technology.
Drug Discovery Outsourcing Key Market Trends
- Increased Focus on Biopharmaceutical Outsourcing: A major trend in the drug discovery outsourcing market is an increasing focus on biopharmaceutical outsourcing, gene therapy, cell-based for their efficacy in treating complex chronic diseases. The demand for medicinal and other biological products is growing rapidly. Biopharmaceutical companies often lack the resources or know-how to develop these products in their home, leading to demand for specialized outsourcing services. This trend toward expanding outsourcing with CROs and contract development organizations (CDMOs). This is because these specialized services help simplify drug discovery, improve product quality and reduce time to market for biopharmaceuticals.
- Integrating Artificial Intelligence into Drug Discovery: Another major drug discovery outsourcing market trend is the increasing integration of artificial intelligence (AI) into the drug discovery process, especially in the outsourcing industry. AI and machine learning algorithms are being used to analyze big data, have predicted drug interactions, and identified potential drug candidates better than traditional mechanisms of action. Pharmaceutical companies are increasingly collaborating with AI-focused companies to compete in the rapidly evolving pharmaceutical landscape.
Drug Discovery Outsourcing Market SkyQuest Analysis
SkyQuest's ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
According to SkyQuest analysis, the drug discovery outsourcing market is driven by the need for cost efficiency and the desire to boost biotech R&D. The drug discovery outsourcing industry provides pharmaceutical companies with specialized expertise and state-of-the-art equipment. But the regulatory challenges and significant IP risk challenges faced by the market may constrain the extent to which firms adopt outsourcing. Key trends such as increasing demand for biopharmaceutical outsourcing and integration of artificial intelligence are reshaping the market, offering new opportunities for efficiency and innovation. Outsourcing remains an option. It is important for companies that need to bring new treatments to the market quickly and cost-effectively.
| Report Metric | Details |
|---|---|
| Market size value in 2023 | USD 3.6 Billion |
| Market size value in 2032 | USD 6.75 Billion |
| Growth Rate | 7.2% |
| Base year | 2024 |
| Forecast period | 2025-2032 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
|
| Customization scope | Free report customization with purchase. Customization includes:-
|
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Drug Discovery Outsourcing Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Drug Discovery Outsourcing Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Drug Discovery Outsourcing Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Drug Discovery Outsourcing Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Drug Discovery Outsourcing Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Drug Discovery Outsourcing Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
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