Drug Discovery Services Market

Drug Discovery Services Market Outlook (2023 to 2033)

The global drug discovery services market size is projected to garner significant growth from 2023 to 2033. According to the research report published by FMI, the global market is anticipated to surpass a valuation of USD 19.7 billion in 2023. It is likely to hit a valuation of USD 76.5 billion by 2033. The market is projected to exhibit a captivating CAGR of 14.5% from 2023 to 2033.

New drugs are continuously required to address the various unmet medical needs. Several diseases, including neurodegenerative, cancer, rare genetics, and cardiovascular diseases still lack effective treatment. The emergence of new diseases is spiraling the demand for new drugs. Drug discovery services are expected to increase multifold due to the growing development and discovery of novel drugs.

Drug discovery requires substantial resources and time. As drug discovery becomes complex, the demand for specialized expertise across various scientific disciplines rises. Experts from toxicology, medicinal chemistry, pharmacology, and formulation development usually engage in discovering new drugs. Outsourcing these services can reduce costs and time for research institutions and pharmaceutical companies. The outsourced drug delivery services market provides access to specialized infrastructure and expertise, without any high investments.

Several pharmaceutical, biopharmaceutical, and medical device businesses devote significant resources to developing new medications and technologies. The pharmaceutical sector spends a lot of money on research and development (R&D). The research and development pharmaceutical industry brings high-quality, innovative goods to market. The top pharma companies are enhancing their R&D efficiencies through massive R&D investments to reap long-term benefits.

Initiatives for rare diseases and orphan drug research drive new income streams in the market. However, stringent rules regulating drug research and animal testing may limit market expansion to some extent. Moreover, drug discovery service companies still need to deal with the problem of a scarcity of trained employees.

Attributes	Details
Drug Discovery Services Market Share (2022)	USD 17.5 billion
Drug Discovery Services Market Share (2023)	USD 19.7 billion
Drug Discovery Services Market Share (2033)	USD 76.5 billion
Drug Discovery Services Market Share (2023 to 2033)	14.5%

Drug Discovery Services Market Historical Analysis (2018 to 2022) Vs. Forecast Outlook (2023 to 2033)

In 2022, the global drug discovery services market size stood at USD 17.5 billion. The market share is expanding rapidly due to the rising market dynamics for pharmaceuticals. Technical developments are likely to amplify market development. An increase in the adoption of novel methodologies for discovery is observed. Escalating demand for generic medications and an increase in patients expiring, all contribute to rising drug distribution.

The increased research and development in the pharmaceutical industry bolster the market’s growth prospects. The evolution of the healthcare industry combined with the rise in demand for generic medications augments the demand for drug discovery services. The rising geriatric population, and technical developments in drug discovery services, all accelerate the market's growth. Additionally, the growing pharmaceutical sector and a surge in contract development services aid market expansion. Growing manufacturing companies that are promoting drug discovery operations boost sales of drug discovery services.

Other factors that positively influence drug discovery trends include:

• An increase in awareness about chronic diseases
• A surge in the patient pool
• Increasing unmet medical needs
• Increasing funding and reimbursement initiatives

Category-wise Insights

Why do Pharmaceutical Companies Hold a Huge Chunk of the Market Share?

Pharmaceutical companies occupy lion’s share in the global market. The segment accounted for 42% market share in 2022. Pharmaceutical companies rely on market trends and intelligence to devise drug discovery strategies. They collaborate with research institutions and Contract Research Organizations (CROs) to research specific ailments for target audiences. Therefore, the increasing funding from pharmaceutical companies for new drug discoveries bolsters market growth. Moreover, the development and launch of novel drugs give a boost to market growth.

Which Process Segment is Dominant in Drug Discovery Services?

In terms of market share, the Hit-to-lead identification method is the dominant segment. A hit compound is a molecule that exhibits appropriate activity in a screening assay. Researchers use a slew of methods to find the hit molecule. Although, the conventional technique of high-throughput screening is the standard one. Therefore, the lead optimization segment is expected to see increased demand as technology advances and new state-of-the-art facilities arise.

Which Type of Drug Discovery Service Accounts for a Substantial Market Share?

The medicinal chemistry services segment is predicted to increase at a high-double-digit CAGR throughout the forecast period.

The trend of pharmaceutical companies outsourcing research and development services is growing. The expanding drug discovery and development activities and R&D investments are driving the market forward.

During the projection period, the biological services segment in the drug discovery market is expected to increase at a high CAGR.

Which Drug Type in Drug Discovery Services held a Sizable Market Share in 2022?

Small molecules accounted for a huge portion of the drug discovery services market in 2022. The biologics segment is predicted to expand at a remarkable CAGR in the coming years. The growing use of small-molecule medications to treat chronic diseases surges the demand for these drugs.

Small-molecule pharmaceuticals, even though, dominate the global pharmaceutical market, biologics, biosimilars, and large-molecule drugs are gaining market share. Primarily due to the introduction of new biologic-based treatments and rising earnings from current biologics. In addition, biologics and biosimilars necessitate more specialized testing services than small molecules at each level. Therefore, in the next few years, the growing demand for outsourcing these activities to CROs is likely to fuel the expansion of the market.

Which Therapeutic Area Segment Dominated the Global Drug Discovery Market?

Oncology dominated the drug discovery services market in terms of therapeutic areas. It is predicted to continue to do so throughout the forecast period. The segment accounted for an impressive 39.7% market share in 2022. Cancer medicines are in high demand due to increasing cancer cases worldwide. This is likely to make the segment a prominent shareholder in the next years.

Country-wise Insights

Why Does North America Dominate Global Market Share?

North America is a global leader in research and development spending in the pharmaceutical industry. The region accounted for a massive 35.2% market share in 2022. The region is also an outsize market for bulk medications and ready-to-use dosage forms.

The United States accounted for 24.1% market share in 2022. The region’s market works as a free economy, with transparent trading practices and anti-competitive actions restricted. Since biologics is more expensive, the United States has a lot of room for biosimilars. As a result, the United States drug discovery services market is one of the primary competitors for biosimilars.

Remicade, Enbrel, Rituximab, Adalimumab, Infliximab, Etanercept, Darbepoetin Alpha, and other drugs are among the popular players in the United States. As a result of the factors mentioned above, the market is expected to grow rapidly over the forecast period. The progressive increase in regional healthcare spending aids new pharmaceutical technology advancements.

Which Growth Strategies are Likely to be Adopted by Market Players?

The global drug discovery services market is competitive, with Laboratory Corporation of America Holdings (United States), Charles River Laboratories International Inc. (United States), WuXi AppTec (China), and Thermo Fisher Scientific Inc. (United States) collectively accounting for a large portion of the market. The United States-based company, Laboratory Corporation of America Holdings, is a prominent player in the global market.

These key players in the global drug discovery market focus on a broad spectrum of clients. They emphasize incorporating modern and advanced technology-enabled solutions. Increasing investments in joint ventures & partnerships are likely to be prevalent as key strategies. Extensive quality systems and processes contribute to the growth of businesses operating in the market. These companies may use organic and inorganic growth techniques, such as acquisitions and expansions, to tap into new demographics.

Several drugs are pending approval from the United States Food and Drug Administration (FDA).

Anticipated Drug Approvals in 2023:

• In January 2023, Genentech declared that it received a Priority Review and Fast Track designation grant for Glofitamab. The drug is a novel bispecific antibody that engages T-cells of the immune system to treat adult patients with refractory or relapsed LBCL.
• In January 2023, Brexpiprazole, an atypical antipsychotic supplement NDA approved for schizophrenia was put under Priority Review by FDA. Brexpiprazole is a drug developed by H. Lundbeck A/S and Otsuka Pharmaceuticals.
• In January 2023, UCB’s Rozanolixizumab was accepted by the FDA for further Phase III study.
• In December 2022, Harm Reduction Therapeutics announced that FDA accepted and granted Priority for Review to their NDA for RiVive. The product is an over-the-counter naloxone nasal spray.

Key Players in the Market

• Laboratory Corporation of America Holdings
• Charles River Laboratories International Inc.
• Genscript Biotech Corporation
• Thermo Fisher Scientific Inc.
• Pharmaron Beijing Co. Ltd.
• Evotec SE
• Eurofins Scientific SE
• Pharmaceutical Product Development Inc.
• Piramal Enterprise Limited
• Syngene International Limited

Market Segmentation

By Process:

• Target Selection
• Target Validation
• Hit-to-lead identification
• Lead Optimization
• Candidate Validation

By Type:

• Chemistry Services
• Biology Services

By Drug Type:

• Small Molecule Drugs
• Biologics Drugs

By Therapeutic Area:

• Neurology
• Infectious and Immune Systems Diseases
• Digestive System Diseases
• Oncology
• Other Therapeutic Areas

By End User:

• Pharmaceutical & Biotechnology Companies
• Academic Institutes
• Manufacturing
• Other End Users

By Region:

• North America
• Latin America
• Europe
• Asia Pacific
• The Middle East & Africa

Frequently Asked Questions

How Big Was the Drug Discovery Services Market in 2022?

The market attained a revenue of USD 17.5 billion in 2022.

What is the Key Trend Driving Market Growth?

Increasing funding and reimbursement initiatives increases market demand.

Which End-use Industry Holds Lucrative Opportunities?

Pharmaceutical companies offer lucrative opportunities.

Which Process Segment is Dominant in Drug Discovery Services?

The hit-to-lead identification method is the dominant segment.

What is the Current Market Valuation?

The market is estimated to secure a valuation of USD 19.7 billion in 2023.