The global Healthcare Contract Manufacturing Market size is expected to reach USD 323.6 billion by 2028, according to a new report by Grand View Research, Inc. It is expected to expand at a CAGR of 7.7% from 2021 to 2028. The changing regulatory landscape, coupled with rising offshoring to emerging countries, is anticipated to propel the market growth over the forecast period.
Increasing
demand for advanced products is a major factor driving the market. Original
equipment manufacturers (OEMs) are outsourcing the manufacturing activities of
medical devices to third parties, mainly to developing countries to gain
economic benefits. Furthermore, these regions are witnessing rising cases of
chronic conditions, such as heart disorders, thereby positively affecting the
market growth. Changes in reimbursement schemes are anticipated to increase the
adoption of cost containment measures by OEMs. For instance, to prevent
reimbursement issues from impacting financing goals, device manufacturers are
developing a well-planned reimbursement strategy in parallel with their
regulatory and clinical strategies in the early phases of product development.
Moreover,
the growing geriatric population across the globe and the consequent rise in
age-related diseases have stimulated the progress of pharmaceutical and medical
device development, thus leading to the growth of the healthcare manufacturing
industry. With a rise in demand, the market now witnesses an influx of
manufacturing service providers. Asia Pacific was the dominant regional market
for medical device outsourcing in 2020 owing to lower cost and easy
availability of skilled human resources. For instance, according to IBEF,
M&A deals in the healthcare sector in India increased by 155% (USD 1.09
billion) in 2019.
A
rise in the number of medical device companies vying to enter regional markets,
such as India and China, is further expected to contribute to the growth of
this market. For instance, the Chinese government’s Marketing Authorization
Holder (MAH) scheme facilitates international healthcare players to produce
their products within the local Chinese market equipped with state-of-the-art
centers. The expansion of production capacity by players such as WuxiBiologics
is a distinguished example of this deliberate plan.
Due
to the emergence of infections, such as COVD-19, many organizations are
attempting to accelerate production to meet the growing demand. Thus, these
companies are appointing healthcare CMOs to speed up their production processes
as well as reduce their overall costs to meet the increasing demand for medical
products. The worldwide effort to develop a vaccine and therapeutic
agent against COVID-19 has created the greatest opportunity for many large as
well as small CMOs as the pharmaceutical companies are manufacturing vaccine
doses on a large scale. Hence, we can say that the pandemic has had a positive
impact on this industry.
This
paradigm shift from in-house manufacturing to contract manufacturing in the
pharmaceutical and medical device industry has resulted in the increased focus
of the companies on contract manufacturing service vendors. These services have
effectively addressed the concerns regarding pharmaceutical and medical device
manufacturing as well as significantly accelerated the commercialization of
products.
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Healthcare Contract Manufacturing Market Report
Highlights
- By type, the
pharmaceutical segment dominated the market with a share of 75.2% in 2020
owing to low manufacturing budget and highly sophisticated contract
manufacturing service offerings
- The medical
device type segment is expected to be the fastest-growing segment with a
CAGR of 9.7% over the forecast period owing to increasing pressure on OEMs
to reduce costs and enhance the timeline for taking a product to market
- Cardiology
was the dominant therapeutic area segment in the medical device contract
manufacturing market in 2020 owing to rising demand for cardiovascular
devices as a result of the increasing prevalence of associated heart
conditions
- Asia Pacific
dominated the market in 2020 and is expected to witness the fastest growth
over the forecast period owing to the presence of a large number of
service providers, lower costs, and growing demand for medical devices in the
region
Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, the company offers market intelligence studies ensuring relevant and fact-based research across a range of industries including technology, chemicals, materials, healthcare and energy.
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