Pharmaceutical Contract Packaging Market Size 2024-2028

The global pharmaceutical contract packaging market size is estimated to grow by USD 9.32 billion at a CAGR of 16.54%  between 2023 and 2028.

The market growth hinges on various factors, notably the upward trajectory of research and development (R&D) investment in the pharmaceutical sector, the expanding scope of global pharmaceutical sales, and the rising approval rates of new drugs by the FDA. With increased funding dedicated to R&D initiatives, pharmaceutical companies are better positioned to innovate and develop new therapeutic solutions to address unmet medical needs. Furthermore, the robust growth in global sales reflects escalating demand for medications across diverse demographics and geographies. The FDA's approval of a growing number of new drugs underscores regulatory support for innovation in the industry, fostering a conducive environment for market expansion. Collectively, these factors contribute to the buoyancy of contract packaging, driving advancements in healthcare and offering novel treatment options to patients worldwide.

What will be the Size of the Pharmaceutical Contract Packaging Market?

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Pharmaceutical Contract Packaging Market Dynamics

In the market, contract packaging services play a pivotal role, offering a range of solutions from pharmaceutical packaging materials to silica-based packaging material tailored for specific needs. Cloud packaging companies streamline processes, enhancing efficiency. The market caters to diverse requirements, including bioproducts, generic pharmaceuticals, and various formats like plastic bottles, vials and ampoules, and prefillable syringes. Services encompass plastic bottle filling for solid dosage forms and liquid and liquid suspensions. Leading players like Aphena Pharma Solutions invest in production capacity, meeting demands for steroids and other pharmaceuticals, driving innovation, and ensuring quality across the supply chain. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Pharmaceutical Contract Packaging Market Driver

The rising R&D spending in the pharmaceutical industry is notably driving pharmaceutical contract packaging market growth. Many pharmaceutical companies are investing in R&D to be successful in their businesses in the long term. On average, a pharmaceutical company spends around 15%-20% of its revenue on R&D purposes. For instance, Biogen, one of the global pharmaceutical manufacturing companies, spent around 16%-17% of its revenue on R&D in 2021. The high R&D spending by manufacturers is expected to bring more pharmaceutical products to the market. This has increased the demand for contract packaging.

Further, by adopting contract packaging, pharmaceutical manufacturers can reduce their capital expenditure and operating cost associated with the purchase of packaging machinery, space for setting up packaging units, and labor costs for the same. Furthermore, opting for contract packaging also helps pharmaceutical manufacturers concentrate on their core businesses. The R&D spending by pharmaceutical manufacturers will also increase the demand for innovative packaging. Therefore, all these factors will boost market growth during the forecast period.

Significant Pharmaceutical Contract Packaging Market Trend

The growing demand for sustainable packaging is an emerging trend in the market. The growing environmental concerns are increasing the demand for sustainable packaging solutions among manufacturers. Plastic films and plastic materials are mostly derived from petroleum feedstock. Their adverse effects on the environment have encouraged the vendors to provide eco-friendly packaging to their consumers.

Moreover, many pharmaceutical manufacturers are setting sustainable goals in their business operations to reduce their environmental impacts. For instance, Johnson and Johnson announced its sustainable goal to provide 100% reusable, recyclable, and compostable packaging by 2025. The adoption of sustainable packaging by pharmaceutical end-users enables contract packaging vendors to focus on creating sustainable packaging techniques. Hence, these factors are expected to propel the growth of the global market during the forecast period.

Major Pharmaceutical Contract Packaging Market Challenge

The emergence of in-house packaging is a major challenge impeding pharmaceutical contract packaging market growth. A few pharmaceutical manufacturers are now focusing on gaining complete control over their product supply chain. This, in turn, is encouraging them to adopt in-house packaging units rather than outsourcing the need to contract packagers. Contract packaging can be time-consuming as the pharmaceutical products are transported between the manufacturers' locations and contract packagers' locations. Besides the transportation and labor expenses, contract packaging can also increase the overall lead time of the product hitting the market.

Furthermore, the other reasons for having in-house packaging units are the unwillingness of the pharmaceutical packaging manufacturers to share information with contract packagers, the availability of in-house machinery and staff, and high switching costs. Additionally, many pharmaceutical contract manufacturers are also providing in-house packaging services as a bundled offering. For example, Aesica, a UK-based pharmaceutical contract manufacturer, provides complete pharmaceutical services from pharmaceutical product manufacturing to packaging. Therefore, all these factors are likely to hinder the market growth during the forecast period.

Pharmaceutical Contract Packaging Market Segmentation

The market encompasses a broad spectrum of services provided by contract packaging companies to meet the diverse needs of pharmaceutical corporations and government agencies. These services include packaging materials tailored for specific applications like serialization to combat counterfeit medicines and ensure product safety. With advancements in raw materials, solutions like silica-based packaging are gaining traction, especially for sensitive therapies like gene and cell therapies. Moreover, contract businesses offer ancillary services such as bottle filling services for various formats, including plastic bottles and containers, glass bottles, and metal bottles, catering to the production demands of oncology drugs, high-potency drugs, and antibody conjugates.

By Packaging 

The market share growth by the plastic bottles segment will be significant during the forecast period. Pharmaceutical plastic bottles are made up of either low-density polyethene (LDPE), high-density polyethene (HDPE), or polypropylene materials. These bottles are used as primary packaging for solid, liquid, and semi-liquid products. 

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The plastic bottles segment was valued at USD 1.78 billion in 2018. The demand for plastic bottles is increasing in the pharmaceutical industry. This is because plastic bottles eliminate the need for tertiary packaging and ensure the safety of pharmaceutical products throughout the supply chain. Syrups, ophthalmic, and nasal medicines are commonly packaged in plastic bottles. Furthermore, the growing need for medicines is also expected to increase the demand for plastic bottle packaging. Hence, such factors will boost segment growth during the forecast period.

Region Analysis

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North America is estimated to contribute 29% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The US is the key country contributing to the growth of the market in North America. The growing value of the US pharmaceutical exports, increasing healthcare spending, and the rising ageing population are the major factors driving the market growth in the country. Furthermore, the market in the US consists of established global players such as Johnson and Johnson, Pfizer, Abbot Laboratories, and Bristol Myers Squibb.

Furthermore, the healthcare sector is witnessing significant growth in North America, owing to factors such as the growing healthcare infrastructure, rapid urbanization, the introduction of premium medicines, and the introduction of hospital chains that have a cascading effect on healthcare delivery. As the healthcare market grows, there will be a simultaneous rise in the demand for packaging products for various types of medicines. These are some of the factors that would influence the demand for contract packaging in the region during the forecast period.

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• Berlin Packaging LLC -The company offers packaging services to automotive, food, home care, industrial chemicals, pharmaceuticals, and personal health. 

The Pharmaceutical Contract Packaging market research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

Amcor Plc, AmerisourceBergen Corp., AptarGroup Inc., Becton Dickinson and Co., Berlin Packaging LLC, Berry Global Inc., Bilcare Ltd., Catalent Inc., CCL Industries Inc., Constantia Flexibles Group GmbH, Datwyler Holding Inc., FedEx Corp., Gerresheimer AG, Jabil Inc., James Alexander Corp., KP Holding GmbH and Co. KG, Pharma Packaging Solutions, Precision Concepts International, SCHOTT AG, and WestRock Co.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Customer Landscape

The Pharmaceutical Contract Packaging market industry report encompasses the entire market adoption cycle, ranging from the initial innovator phase to the subsequent laggard stage. It emphasizes adoption rates across various regions, determined by penetration levels. Additionally, the Pharmaceutical Contract Packaging market analysis report outlines essential purchasing factors and factors influencing price sensitivity. This aids companies in assessing and formulating effective growth strategies.

 Customer Landscape

Segment Overview

The Pharmaceutical Contract Packaging market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.

• Packaging Outlook
  • Plastic bottles
  • Blister packs
  • Pouches
  • Parenteral containers
  • Pre-filled syringes
• Type Outlook 
  • Primary
  • Secondary
  • Tertiary
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

Market Analyst Overview

The market is experiencing rapid growth due to factors such as the expansion of the ecommerce industry and the increasing demand for packaging processes in the global pharmaceutical industry. With new product launches and the emergence of novel drugs, market players are turning to specialized firms like Credence MedSystems for drug delivery systems and outsourcing bottling services. Blister packaging and autoinjectors are in high demand, driven by the need for flexibility and profitability in the industry's supply chain. To combat issues like counterfeit drugs and human handling errors, there's a rising focus on sustainable contract packaging and child-resistant packaging. As technological advancements continue to shape the market, pharmaceutical contract manufactuting remains integral to the healthcare industry and clinical research endeavors worldwide.

Further, the market faces challenges such as resources shortage amid global economic growth and an aging population. However, there's a surge in demand for commercial packaging and clinical packaging, especially with the generic drug program and the need for injectables and oral medications. The market witnesses global demand for electronic systems and specialized equipment for log keeping and data administration. Companies like Cookeville, Tennessee, with its Solid Dose Division, play a vital role in capacity expansions and bottling and filling services, ensuring compliance with quality standards and launch scheduling. With a focus on innovative technology and sustainable materials, the market is poised for growth amidst emerging trends and expert analysis driving strategic decision-making.

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What are the Key Data Covered in this Pharmaceutical Contract Packaging Market Forecast Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2024 and 2028
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies