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The pharmaceutical analytical testing outsourcing market size is forecast to increase by USD 2.88 billion, at a CAGR of 7.4% between 2023 and 2028. The market experiences significant growth due to several key drivers. The increasing number of FDA-approved manufacturing facilities in developing countries provides an ample supply of resources for analytical testing services. Additionally, the rise in mergers and acquisitions in the pharmaceutical industry leads to the outsourcing of analytical testing to specialized laboratories. However, the market faces challenges such as the shortage of trained professionals, which may hinder the growth of the market. In vitro and in vivo tests, as well as bioanalytical testing, are essential aspects of pharmaceutical research and development for generic drugs, drug R&D, and biosimilars. Key analytical testing services include high-performance liquid chromatography (HPLC), gas chromatography (GC), and mass spectrometry (MS). By leveraging advanced technologies and expertise, outsourcing analytical testing services enables pharmaceutical companies to streamline their operations and focus on their core competencies.
Pharmaceutical analytical testing plays a pivotal role in ensuring the quality, safety, and efficacy of drugs and pharmaceutical products. This process involves various analytical techniques, including in vitro tests and in vivo tests, to assess the purity, dosage, therapeutic efficacy, and non-toxicity of drug molecules. In the context of drug Research and Development (R&D), analytical testing is essential for assessing the drug molecule's properties, such as bloodstream absorption, metabolism, and stability. These tests help determine the drug's potency, bioavailability, and bioequivalence, which are crucial factors in clinical trials and eventual approval by regulatory authorities.
Moreover, generic drugs and biosimilars also undergo extensive analytical testing to demonstrate their therapeutic equivalence to branded drugs. Bioanalytical testing, a specialized form of analytical testing, is used to quantify and identify biomolecules, such as proteins and peptides, in biological samples. Stability testing is another critical aspect of pharmaceutical analytical testing. It ensures that the drug product maintains its quality, safety, and efficacy throughout its shelf life. This testing involves monitoring the drug's degradation and identifying any contaminants that may affect its stability. Pharmaceutical and biopharmaceutical companies often outsource their analytical testing requirements to Contract Research Organizations (CROs) and specialized laboratories. This approach allows them to leverage the expertise and advanced analytical testing methods offered by these service providers.
Simultaneously, some of the commonly used analytical testing methods include hyphenated techniques, such as liquid chromatography-mass spectrometry (LC-MS), gas chromatography-mass spectrometry (GC-MS), and capillary electrophoresis-mass spectrometry (CE-MS). Kinetic methods, such as enzyme-linked immunosorbent assay (ELISA) and radioimmunoassay (RIA), are also widely used for drug assessment. Environmental monitoring is another essential aspect of pharmaceutical analytical testing. It involves testing the environment where drugs are manufactured to ensure that they meet the required standards for purity and safety. This testing is crucial for maintaining the quality of the final product and preventing contamination. In conclusion, pharmaceutical analytical testing is a vital component of drug development and manufacturing. It ensures the purity, dosage, therapeutic efficacy, and non-toxicity of drug molecules, enabling the successful completion of clinical trials and eventual approval by regulatory authorities. By outsourcing analytical testing requirements to specialized CROs and laboratories, pharmaceutical and biopharmaceutical companies can leverage advanced testing methods and expertise to ensure the quality and safety of their products.
The 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.
The bioanalytical segment is estimated to witness significant growth during the forecast period. The market experiences growth due to the expanding pharmaceutical and biotechnology industries. Primary consumers of analytical testing services are companies operating in these sectors, ensuring their products adhere to regulatory standards, including quality, purity, and safety. The rise in chronic diseases, such as cancer, necessitates increased drug production, leading to a heightened demand for analytical testing. In Vitro and In Vivo tests, including bioanalytical testing, are essential in all stages of drug discovery and manufacturing.
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The bioanalytical segment was valued at USD 2.08 billion in 2018. Consequently, the need for these services will continue to increase worldwide. The market expansion is fueled by significant investments in research and development by pharmaceutical, biotechnology, and medical device companies, focusing on discovering treatments for life-threatening diseases. Key areas of testing include Generic Drugs, Drug R&D, Biosimilars, and other related sectors. This market growth is a testament to the industry's commitment to ensuring the highest standards of product quality and safety.
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North America is estimated to contribute 50% 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 market is witnessing significant expansion due to the escalating research and development initiatives, intricate regulatory norms, and the growing intricacy of drug molecules. Pharmaceutical firms in the US and Canada are progressively outsourcing analytical testing to proficient contract research organizations (CROs) to optimize their processes, lessen expenses, and concentrate on essential functions like drug discovery and manufacturing. This outsourcing strategy enables companies to benefit from sophisticated technologies, specialized knowledge, and sophisticated laboratories, which are indispensable for adhering to regulatory guidelines and augmenting drug efficacy, purity, bloodstream absorption, metabolism, non-toxicity, and contaminant screening. The region's stringent regulatory framework, spearheaded by the Food and Drug Administration (FDA), necessitates thorough testing procedures for therapeutic efficacy, safety, and drug quality.
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.
The increased number of FDA-approved manufacturing facilities in developing nations is notably driving market growth. Pharmaceutical analytical testing outsourcing is a significant segment of the pharmaceutical industry in the United States. When pharmaceutical companies seek partners for outsourcing their drug discovery, they prioritize manufacturing facilities that hold US Food and Drug Administration (FDA) approval, possess a competent workforce, and offer cost-effective solutions. India, for instance, is a popular destination for big pharmaceutical companies due to its abundance of FDA-approved manufacturing plants and a large talent pool at reasonable costs.
Moreover, compliance with World Health Organization-Goods Manufacturing Practices (WHO-GMP) further adds to the appeal. This trend has led to substantial investments in these countries for pharmaceutical analytical testing outsourcing. Clinical research organizations, biotech firms, and contract research organizations increasingly rely on hyphenated techniques and advanced analytical testing methods to ensure the quality and efficacy of pharmaceutical products. Thus, such factors are driving the growth of the market during the forecast period.
The rising mergers and acquisitions are the key trends in the market. Pharmaceutical companies in the US are increasingly turning to outsourcing for analytical testing services due to budget constraints and a shift towards strategic partnerships. With consolidated infrastructure and reduced government spending on manufacturing, the need for in-house positions is decreasing. Contract Development and Manufacturing Organizations (CDMOs) are investing in advanced technologies such as Automation Technology and Microbial Manufacturing Technology to offer comprehensive, one-stop solutions. Personalized Medicine and Biotechnology are driving the demand for outsourced services, particularly in areas like Toxicity Testing and Drug Safety.
Moreover, CDMOs are expanding their offerings to include services like marketing and client outreach, providing pharmaceutical companies with a competitive edge. The Pharmaceutical Analytical Testing Outsourcing Market is expected to grow significantly due to these trends, with companies prioritizing efficiency, cost savings, and innovation. Key players in the market include companies specializing in Healthcare Infrastructure and Data Analysis. Thus, such trends will shape the growth of the market during the forecast period.
The shortage of trained professionals is the major challenge that affects the growth of the market. Pharmaceutical analytical testing is a critical process in drug development, ensuring the quality and safety of medicines for chronic diseases. However, the pressure to bring new drugs to market quickly can lead to non-compliance among laboratory professionals. This issue is exacerbated by a lack of expertise in advanced analytical testing techniques such as kinetic methods and electrochemical techniques. Regulatory bodies strictly enforce adherence to testing standards, and any deviations can result in improper data collection, leading to product failures and significant financial losses for biopharmaceutical companies. Stability testing is essential to ensure drug efficacy and safety over extended periods.
However, outsourcing analytical testing to specialized laboratories can help mitigate these risks and ensure regulatory compliance. Pharmaceutical companies can benefit from the expertise and advanced technologies of these laboratories, leading to more accurate and reliable drug assessments. In conclusion, outsourcing pharmaceutical analytical testing is a strategic decision that can help ensure regulatory compliance, improve product quality, and ultimately bring safer and more effective drugs to market for the treatment of chronic diseases. Hence, the above factors will impede the growth of the market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
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.
Boston Analytical - The company offers pharmaceutical analytical testing outsourcing solutions such as analytical testing and microbiology testing.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
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.
Pharmaceutical analytical testing plays a crucial role in ensuring the quality, safety, and efficacy of drugs and biopharmaceuticals. In vitro and in vivo tests are essential components of this process, assessing various aspects such as purity, dosage, therapeutic efficacy, and non-toxicity. These tests are critical for drug R&D, including generic drugs, biosimilars, and clinical trials. Bioanalytical testing is another significant area, focusing on the quantification and identification of drug molecules in biological samples.
In addition, stability testing is also vital, monitoring the drug's behavior under various conditions to ensure its consistency and safety. Clinical research organizations and contract research organizations often outsource pharmaceutical analytical testing to specialized labs, enabling them to focus on clinical trials and healthcare infrastructure development. Advanced analytical testing methods, such as hyphenated techniques, kinetic methods, and electrochemical techniques, are increasingly used for drug assessment. The pharmaceutical industry's focus on chronic diseases, personalized medicine, and biotechnology has led to a growing demand for pharmaceutical analytical testing. Automation technology and microbial manufacturing technology are also essential, ensuring drug safety and reducing contaminants. Toxicity testing is another critical aspect, ensuring the drug's safety for human health before it reaches the market.
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Market Scope |
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Report Coverage |
Details |
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Page number |
145 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 7.4% |
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Market Growth 2024-2028 |
USD 2.88 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
6.8 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 50% |
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Key countries |
US, Germany, China, UK, and Japan |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Agno Pharma, Alcami Corp., AptarGroup Inc., Boston Analytical, Cambrex Corp., Catalent Inc., Charles River Laboratories International Inc., Cotecna Inspection SA, Element Materials Technology Group Ltd., Eurofins Scientific SE, Intertek Group Plc, Laboratory Corp. of America Holdings, Merck KGaA, Pace Analytical Services LLC, Seikagaku Corp., SGS SA, Source BioScience, Thermo Fisher Scientific Inc., West Pharmaceutical Services Inc., and WuXi AppTec Co. Ltd. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period. |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Service
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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