Here’s an acronym that you probably hear almost everyday on business television – CDMO. Contract Development and Manufacturing Organization (CDMO) are flexible third-party service providers that are entrusted with all the stages of the process of making medicines – providing services in the research and development stages, offering support in manufacturing, and providing formulating and finishing processes.
The rise of CDMO market
India’s Contract Development and Manufacturing Organization (CDMO) market is witnessing a strong growth trajectory driven by a confluence of factors, including cost advantages, technological advancements, and a strong regulatory framework. According to a report by Boston Consulting Group (BCG), the sector is poised to secure a 4-5 per cent share of the global CDMO market thereby strengthening India’s position as a preferred outsourcing hub for pharmaceutical manufacturing and development.
Per Fortune Business Insight, the global CDMO market size was valued at $242.62 billion in 2024 and is expected to grow to $465.14 billion by 2032, reporting a CAGR of 8.5 per cent during the forecast period. Meanwhile, the BCG report estimated the value of the global CDMO market for new drug modalities to reach $20 billion by 2028.
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Interestingly, while we are talking about the growth of the segment, BCG had noted that some Indian CDMOs, in 2024, witnessed a 50 percent year-on-year surge in Requests for Proposals (RFPs). This was because the global pharmaceutical companies sought to diversify their supply chains and mitigate risks associated with over-reliance on China.
The last decade has seen a considerable rise in CDMOs with an increasingly dynamic mergers and acquisition (M&A) landscape driven by consolidation.
India a preferred hub for drug manufacturing
Industry experts are optimistic that India and other Asian players will emerge as key contributors to the global CDMO market, while offering scalable and cost-effective solutions to meet the increasing demand for specialized drug development. The BCG report said that India has already emerged as a highly attractive destination for drug development and manufacturing as it offers pharmaceutical services priced around 20 per cent lower than those of Chinese competitors. The confidence in India’s pharma manufacturing capabilities is also the courtesy of its robust infrastructure,
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