Drug Discovery Outsourcing Services Market Size & Share 2023 to 2032
Market Size by Service Type (Chemistry, Biological), Dug Type (Small & Large-molecule), Disease Model (In-vitro, Cellular & Animal Models), Therapeutic Area (Diabetes, Neurology, Oncology).
Report ID: GMI6632
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Published Date: September 2023
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Report Format: PDF
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Authors:
Mariam Faizullabhoy, Gauri Wani
Drug Discovery Outsourcing Services Market Size
Drug Discovery Outsourcing Services Market size accounted for USD 4.4 billion in 2022 and is estimated to grow at 8.2% to reach USD 9.6 billion by 2032. The market is witnessing a rising demand for drug discovery outsourcing services owing to increasing focus on specialized areas such as rare diseases, precision medicine, and niche therapeutic areas to develop effective drugs.
Drug Discovery Outsourcing Services Market Key Takeaways
Market Size & Growth
Key Market Drivers
Challenges
Also, complexity associated with drug research and development, with intricate biological targets and technologies necessitates the access to specialized expertise. Furthermore, outsourcing enables companies to access specialized expertise, advanced technologies, and state-of-the-art facilities, reducing the time and costs associated with in-house drug development and novel drug therapies. Additionally, the growing pipeline of biologic drugs, particularly in the fields of oncology, autoimmune disorders, and infectious diseases, has created a robust demand for drug discovery outsourcing services.
Drug discovery outsourcing services refer to the strategic practice of pharmaceutical companies enlisting external specialized partners to handle various stages of the drug development process. The services encompass a wide range of specialized expertise and resources, including medicinal chemistry, biology, pharmacology, toxicology, drug metabolism and pharmacokinetics (DMPK), and clinical trial management. By outsourcing these services, organizations can leverage the knowledge, experience, and infrastructure of external experts to accelerate drug discovery, optimize resources, access advanced technologies, and enhance research capabilities.
COVID-19 Impact
The COVID-19 pandemic had a drastic impact on the overall economy with several sectors witnessing a significant slump during 2020. The healthcare sector was one of the most severely impacted sectors during the pandemic owing to tremendous pressure on the healthcare systems to contain the spread of infection. During the initial phase of the pandemic, slight slowdown was observed in some non-COVID-19-related drug discovery and research activities. Several companies were noted to revise their R&D spending for clinical trials in comparison to earlier spending.
However, rapid recovery was observed due to the growing urge for the development of vaccine and effective drugs for the treatment of COVID-19. Furthermore, significant surge was noted in R&D invest by pharmaceutical and biotechnology company for developing infectious diseases drugs and vaccines. Also, several pharmaceutical and biotechnology companies collaborated with CROs and CDMOs to accelerate drug discovery and development process and navigate complex regulatory pathway more effectively.
Drug Discovery Outsourcing Services Market Trends
The worldwide burden of chronic diseases is increasing rapidly. Chronic diseases including oncology, diabetes, neurological disorders, chronic kidney diseases (CKD), chronic respiratory diseases (CRD), and cardiac stroke are the primary causes of disability and mortality around the world.
Cardiovascular diseases hold for over half of total chronic disease deaths, whereas diabetes and obesity are witnessing a significant increase owing to their earlier onset and widespread prevalence. As a result, there is a significant demand for the novel drugs and therapies to control and treat chronic diseases that in turn has propelled the growth for the drug discovery outsourcing services across the globe.
Drug Discovery Outsourcing Services Market Restraint
One of the prominent challenges faced while outsourcing drug discovery services is the concern surrounding intellectual property rights. As most of the drug candidates or medical devices involved in drug discovery are patented products, technology transfer at several points between the sponsor and CRO increases the chances of data leak and can potentially restrain the market growth. While outsourcing offers various advantages, the sharing of proprietary information and data with external partners can potentially compromise a pharmaceutical company's valuable research insights and innovations. This poses a dilemma, as safeguarding intellectual property is paramount to preserving competitive advantages and future commercial prospects.
Concerns may arise over issues such as data ownership, patent rights, and the potential for unintended leakage of sensitive information. These uncertainties can deter companies from fully embracing outsourcing partnerships, as the protection of intellectual property remains a critical priority. Thus, significant risks associated with outsourcing drug discovery services may to hamper the market trends.
Drug Discovery Outsourcing Service Market Analysis
By service type, the drug discovery outsourcing services market is classified into chemistry services and biological services. The biological services segment is anticipated to show significant growth of 9.7% during the analysis timeframe. Biological services encompass a range of specialized offerings that involve the study and manipulation of biological systems, such as cells, tissues, and biomolecules, to facilitate the identification and development of potential therapeutic compounds. Biological services play a pivotal role in assessing the interactions between complex potential drug candidates and living organisms at the cellular and molecular level.
Biological services encompass cell-based assays, tissue culture, molecular biology techniques, biomarker analysis, pharmacogenomics, and toxicology studies. These services are vital for assessing the effects of drug candidates on biological systems, evaluating their safety, efficacy, and understanding their mechanisms of action, thereby fostering market expansion.
Based on drug type, the drug discovery outsourcing services market is segmented into small-molecule and large-molecule. The large-molecule drugs segment held a business share of 17.2% in 2022 and is anticipated to grow at a CAGR of 9.2% from 2023 – 2032. Large-molecule drug discovery services encompass a range of specialized expertise, including advanced biologics research, molecular engineering, and high-throughput screening. These drugs are complex therapeutic entities, including proteins, antibodies, and other biologics that offers highly targeted mechanisms of action for treating intricate diseases. Large molecule drugs are administered through injections or infusions and are often produced using advanced biotechnology processes. Furthermore, the rise of biopharmaceuticals and immunotherapies underscores the need for external capabilities in expression, purification, and characterization.
These drugs are used to treat numerous diseases, including cancer, autoimmune disorders, and infectious diseases. Outsourcing services for large-molecule development enables pharmaceutical and biotechnology companies to gain access to expertise and cutting-edge technologies and efficiently navigate the complexities of large-molecule drug development. Such factors are anticipated to boost market size.
Based on disease model, the drug discovery outsourcing services market is segmented into in vitro, animal, cellular, and other disease models. In vitro models accounted for significant revenue share of 42.5% of market, in 2022 and is expected to grow at 8% CAGR during the forecast timeframe. In vitro models provide a controlled and rapid platform for high-throughput screening of potential drug compounds, enabling the assessment of numerous candidates in a shorter time frame. These models simulate disease conditions in a controlled environment, enabling swift and cost-effective evaluation of potential drug candidates. In vitro models aid in the early stages of drug discovery, enabling efficient evaluation of toxicity of drug candidates, compound efficacy and safety profiles before progressing to more resource-intensive stages. This minimizes potential risks, reduces costs, and accelerates decision-making.
Based on cancer type, the drug discovery outsourcing services market is segmented into oncology, neurology, diabetes, infectious diseases, and other therapeutic areas. The oncology segment was valued to be USD 1,190.7 million in 2022 and is expected to grow at CAGR of 8.3% during the forecast timeframe. The rising burden of oncology has surged the demand for drug discovery outsourcing services to develop novel cancer therapeutics. Drug discovery outsourcing lead to the development of novel and innovative oncology treatments, addressing unmet medical needs and offering new avenues for cancer management. Drug discovery outsourcing services in oncology provide specialized expertise, resources, and technologies to identify and develop innovative drugs targeting cancer.
For instance, in 2023, Astex Pharmaceuticals collaborated with Merck & Co., Inc. to identify small molecule candidates with activity towards a tumour suppressor protein for the treatment of cancer. Similarly, in June 2020, AstraZeneca partnered with Accent Therapeutics to discover, develop, and commercialize novel cancer therapeutics targeting RNA-modifying proteins (RMPs). This collaborative effort will enable to rapidly advance and achieve the effective therapeutic potential for the treatment of cancer.
The North America drug discovery outsourcing services market dominated the overall industry with 50.3% market proportion in 2022 and is expected to show similar trend over the coming years. This high revenue share is mainly attributed to the region’s strong pharmaceutical industry and advanced research infrastructure, attracting global collaborations. Outsourcing offers cost-efficiency through access to skilled scientists, cutting-edge technologies, and specialized expertise, allowing companies to optimize resources. Moreover, the increasing complexity of drug discovery, from target identification to preclinical studies, necessitates diverse capabilities. By partnering with outsourcing providers, pharmaceutical companies tap into a wide range of services, accelerating timelines, fostering innovation, and staying competitive in the rapidly evolving landscape, thus fostering the growth of the North America market.
Drug Discovery Outsourcing Services Market Share
Major market players operating in the drug discovery outsourcing services market include:
These industry players majorly adopt various strategies including collaborations, acquisitions, mergers, and partnerships to create a global footprint and sustain market competition.
Drug Discovery Outsourcing Services Industry News:
The drug discovery outsourcing services market research report includes an in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2018 to 2032, for the following segments:
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By Service Type
By Drug type
By Disease model
By Therapeutic area
The above information is provided for the following regions and countries:
Research methodology, data sources & validation process
This report draws on a structured research process built around direct industry conversations, proprietary modelling, and rigorous cross-validation and not just desk research.
Our 6-step research process
1. Research design & analyst oversight
At GMI, our research methodology is built on a foundation of human expertise, rigorous validation, and complete transparency. Every insight, trend analysis, and forecast in our reports is developed by experienced analysts who understand the nuances of your market.
Our approach integrates extensive primary research through direct engagement with industry participants and experts, complemented by comprehensive secondary research from verified global sources. We apply quantified impact analysis to deliver dependable forecasts, while maintaining complete traceability from original data sources to final insights.
2. Primary research
Primary research forms the backbone of our methodology, contributing nearly 80% to overall insights. It involves direct engagement with industry participants to ensure accuracy and depth in analysis. Our structured interview program covers regional and global markets, with inputs from C-suite executives, directors, and subject matter experts. These interactions provide strategic, operational, and technical perspectives, enabling well-rounded insights and reliable market forecasts.
3. Data mining & market analysis
Data mining is a key part of our research process, contributing nearly 20% to the overall methodology. It involves analysing market structure, identifying industry trends, and assessing macroeconomic factors through revenue share analysis of major players. Relevant data is collected from both paid and unpaid sources to build a reliable database. This information is then integrated to support primary research and market sizing, with validation from key stakeholders such as distributors, manufacturers, and associations.
4. Market sizing
Our market sizing is built on a bottom-up approach, starting with company revenue data gathered directly through primary interviews, alongside production volume figures from manufacturers and installation or deployment statistics. These inputs are then pieced together across regional markets to arrive at a global estimate that stays grounded in actual industry activity.
5. Forecast model & key assumptions
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✓ Key growth drivers and their assumed impact
✓ Restraining factors and mitigation scenarios
✓ Regulatory assumptions and policy change risk
✓ Technology adoption curve parameter
✓ Macroeconomic assumptions (GDP growth, inflation, currency)
✓ Competitive dynamics and market entry/exit expectations
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Our triple-layer validation process ensures maximum data reliability:
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Verified data sources
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Industry databases
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Regulatory filings
Government procurement records and policy documents
Academic research
University studies and specialist institution reports
Company reports
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GMI archive
13,000+ published studies across 30+ industry verticals
Trade data
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Parameters studied & evaluated
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