The global non-sterile outsourcing market is estimated to be worth USD 7,896.8 million in 2024 and anticipated to reach a value of USD 13,746.9 million by 2034. Sales are projected to rise at a CAGR of 5.7% over the forecast period between 2024 and 2034. The revenue generated by non-sterile outsourcing in 2023 was USD 7,471.0 million.
While pharmaceutical companies continue to competitively re-engineer operational efficiency and financial performance, outsourcing of non-sterile manufacture continues to be a strategic necessity. Of the many cogent reasons that constitute the drivers for this trend, one of the major advantages of shifting toward an outsourcing approach relates to capital expenditure reduction.
With an outsourcing option, pharmaceutical companies are freed from immense financial investments to build and maintain manufacturing facilities, besides those specialized pieces of equipment. Financial flexibility at this level can be invested in other essential areas of the firm, including R&D, marketing, and innovation, to therefore drive growth in competitiveness.
A great deal of investment upfront is required to establish a pharmaceutical manufacturing plant, especially in terms of land purchase, building a medical facility, and installing all modern equipment to Good Manufacturing Practice standards.
Global Non-Sterile Outsourcing Industry Assessment
| Attributes | Key Insights |
|---|---|
| Historical Size, 2023 | USD 7,471.0 million |
| Estimated Size, 2024 | USD 7,896.8 million |
| Projected Size, 2034 | USD 13,746.9 million |
| Value-based CAGR (2024 to 2034) | 5.7% |
Setting up the facility is just a one-time expense; operating a manufacturing facility includes many related ongoing operational expenses in utilities, labor, equipment maintenance, and so on, not forgetting compliance and updating of regulatory standards.
Pharmaceutical manufacturing is something that calls for precision and Good Manufacturing Practices; therefore, regular inspection, audit, and upgrading of equipment and processes are needed.
Outsourcing partners are specialists in the art of manufacturing and are therefore better placed to manage such operational demands efficiently. Easily running into hundreds of millions of dollars, especially for those facilities involving sophisticated technology and quality control measures to make sure the production of non-sterile pharmaceutical products, these start up costs could reach a hundredfold.
Offshoring allows companies to bypass these up-front costs and utilize the already established infrastructure of the CMOs.
Outsourcing of manufacturing activities would help pharmaceutical companies to convert fixed into variable costs as they only have to pay for the consumed amount of the manufacturing services. This would also help in better planning of finances and reduce the impact of depreciation on the Balance Sheets. It ultimately shifts CapEx to OpEx, providing more financial flexibility and cash flow management.
The capital expenditure reduction associated with outsourcing in pharmaceutical companies is a game-changing strategy. It aids them in eluding the huge upfront and continuous expenses related to manufacturing facilities and equipment. Such financial flexibility will assist companies in adhering to their core competencies, stimulating innovation, and responding agilely to market changes.
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Increasing focus on Targeted Therapies Driving the Demand of Non-Sterile Outsourcing
Targeted therapies represent a significant change in the pharmaceutical industry. Being designed to influence specific molecules or pathways involved in disease processes, such therapies offer a host of personalized treatment options more effective and most often free of side effects if compared to traditional therapies.
It is dramatic-implications in terms of requirements rising for specialized manufacturing capabilities, flexibility, and innovation.
Targeted therapies are a significant milestone in the field of medical treatment-mainly in oncology, immunology, and the management of several rare diseases. Unlike conventional treatments with action on a variety of cells, targeted therapies aim to exert their effect on or interfere with a particular interplay of molecular targets involved in the disease process, leading to a reduction in collateral damage on healthy cells.
Most of these new targeted therapies require manufacturing processes beyond the capabilities of the companies at the time of molecular discovery. Examples include the manufacture of very complex molecules and their dosage forms and the incorporation of advanced drug delivery systems into the product.
All such requirements can be handled only by contract manufacturing organizations and contract development and manufacturing organizations.
The non-sterile outsourcing market offers greater development flexibility to products that can adapt to the ever-changing landscape of targeted therapies. In the development and manufacture of these, batch sizes may vary considerably over a short period of time, and scalability is a business driver. CMOs and CDMOs bring agility into play to manage these fluctuations efficiently.
It enables pharmaceutical companies to outsource non-sterile manufacturing from the point of view of cost reduction, concentration on core competencies, compliance with the needed regulations, and agility to market needs. This has been a strategic approach toward the growth and competitiveness of the pharmaceutical industries, which will also help targeted therapies.
Owing to the Increase in Production Cost the Pharma Industry Turning towards Non-Sterile Outsourcing
Price gouging is nothing but the act of raising prices of some goods and services to unreasonable levels. This has been evident mostly in the pharmaceutical sector, especially during public health emergencies like the COVID-19 pandemic, whereby manufacturers were charged with raising prices for medicines to an inordinate degree that are considered critical.
The practices weigh much on healthcare budgets and limit patients' access to essential treatments.
Drug manufacturers pricing their products high and, especially with the current crisis period when the market is really high, outsourcer facilities are now called upon to fill up the gap with the compounded medications. These begin to cover cost-effective alternatives, access to key medications reliably, and the ability to navigate the complexities of the present pharmaceutical landscape.
Very often, it is the healthcare providers who find themselves between a rock and a hard place with regard to price gouging, at times having to pay increased prices for very vital medications. When drug prices increase, it may be difficult for hospitals and clinics to acquire treatment at an affordable rate.
In such scenarios, hospitals are compelled to make tough decisions on patient care. All this battle for survival financially translates into reduced access to medications, treatment delays, and finally poor patient outcomes.
With these challenges facing them, more and more healthcare providers turn to the outsourcing facilities for non-sterile compounding. These facilities can make tailored medications at lower costs, providing an alternative to commercially available products that may be price-gouged.
One of the promising solutions to the increased drug prices and the burden associated with ensuring access to life-sustaining medications is outsourcing facilities. Outsourcing will be critical to helping healthcare organizations weather these trends in the future by offering cost-effective solutions, reliable access to compounded medications, and adherence to the strictest regulatory standards.
Emerging Players including Small and Medium-Sized Enterprises Bringing Opportunities in Non-Sterile Outsourcing Services
The pharmaceutical industry has recently witnessed a remarkable surge in the number of SMEs that, though often very innovative and nimble and focused, for example, on niche markets, specialized therapies, or state-of-the-art research, are usually faced with strong challenges, mainly in the form of scaling production and regulatory uncertainty issues.
SMEs represent a predominate force for innovation in the pharmaceutical industry and generally target unmet medical needs. Generally, they strive for new therapies, including orphan drugs, personalized medicines, and advanced drug delivery systems. Most importantly, as entrepreneurial companies, they can quickly adjust or pivot into new trends and technologies.
The non-sterile outsourcing industry allows the SME enough flexibility and scalability for the growth it seeks. Such volumes are easily responsive to demand by CMOs and CDMOs, hence giving them leverage for accommodation of SMEs at different developmental stages.
For SMEs looking to grow from clinical trials to commercialization, scalability is key, as this shift may drastically alter production requirements. This can be in the form of small batches during the early phases of a product to huge volumes for the drugs that will be commercialized.
Such flexibility will allow SMEs to react to the demand of the market without putting at stake the risk of overinvestment in manufacturing capability that will not be needed in the long run.
In conclusion, SMEs can find cost-effective manufacturing solutions from CMOs and CDMOs as partners, who bring focus on core competencies, flexibility, scalability, and good regulatory expertise.
Regulatory Compliance and Quality Assurance is One of the Key Challenge in The Non-Sterile Outsourcing
The demand for compounded drugs is increasing; consequently, outsourcing facilities must navigate an increasingly complex regulatory environment in order to ensure compliance with standards set forth by the USA Food and Drug Administration and other ruling authorities.
This complexity is further enhanced with the maturation of regulations, particularly under DQSA provisions, and the lack of fully definitive guidelines, like the finalized 503B Bulks List.
In 2013, the Congress passed The Drug Supply Chain Security Act, creating a new class of compounders: outsourcing facilities. These outsourcing facilities are allowed by the law to compound medications in bulk and without specific patient prescriptions, as long as they comply with the cGMP of current Good Manufacturing Practices.
What usually tends to create a problem for most outsourcing facilities is being able to meet the stringent cGMP requirements designed originally for large drug manufacturers. This poses a challenge to compounding facilities: to adhere to these high levels of standards and at the same time be flexible enough to specifically meet the needs of individual clients.
In addition, this is complicated by the fact that there is not a finalized 503B Bulks List, which basically outlines the substances that can be used in compounding. Without clear guidelines in this respect, outsourcing facilities could resort to overly conservative approaches toward compounding that set their capabilities very low with respect to meeting market demands.
The non-sterile outsourcing industry are regulatory compliance and quality assurance is comprising the complexities in adhering to the requirements of cGMP, navigating an evolving regulatory landscape, and ensuring the safety of patients. Hence they are among the key barriers for market growth.
The global non-sterile outsourcing industry recorded a CAGR of 5.2% during the historical period between 2019 and 2023. The growth of non-sterile outsourcing industry was positive as it reached a value of USD 7,471.0 million in 2023 from USD 5,795.0 million in 2019.
Outsourcing of non-sterile products has developed into a strategic industry within the pharmaceutical supply chain. Most companies within the pharmaceutical industry first followed an in-house production strategy, but then shifted towards outsourcing to cope with growing competition and a dire need to reduce costs.
The drivers for early outsourcing in the industry were the needs for streamlining operations and manufacturing costs. The companies began to outsource non-sterile processes-less complex, such as the manufacture of tablets, capsules, and powders-to external partners. The shift freed the pharmaceutical companies to pursue core activities like research and development, utilizing the expertise of specialized manufacturing partners.
With the increase in the stringency of different regulatory frameworks across different countries, outsourcing partners have to be on their toes to meet changing standards continuously. This will trigger investments in quality assurance and regulatory expertise, thus underpinning the demand for reliable and compliant manufacturing solutions.
As demand grows for personalized medicine and niche therapeutics, so too will the nonsterile outsourcing market. Where this is concerned, outsourcing providers will be in great demand as many produce specialized dosage forms such as custom-made tablets and capsules.
Principal Consultant
Tier 1 companies comprise leaders with a market revenue of above USD 100 million capturing significant share of 29.5% in global market. The tier 1 leading companies have adapted a number of approaches to sustain their top positions. Key strategies these companies have employed include process enhancement techniques such as automation and continuous processing for improved efficiency and quality in their products.
Moreover, they focus on having a global supply with locations positioning them strategically in the different markets and hence are better placed in handling supply chain complexities. They can extend their services in an evolving environment, as per the need of the industry, by licensing strategically and collaborating in agreements with pharmaceutical companies.
Prominent companies in tier 1 include AbbVie Pharmaceutical Contract Manufacturing, Aenova Group, Bora Pharmaceuticals, APPCO Pharmaceutical Corporation, Atral Pharmaceutical, Aurigene Pharmaceutical Services (Dr. Reddy’s), Biological E. Ltd., Cambrex Corporation, and BioPlus Life Sciences.
Tier 2 companies include mid-size players with revenue of USD 50 to 100 million having presence in specific regions and highly influencing the local and holds around 39.1% market share. These companies normally have flexibility and scalability in operations to cater to variation in production volumes and customer needs.
Tier 2 companies, to further their reach across the globe, set up regional partnerships and distribution networks. They make investments for technology up-gradation that enables efficient manufacturing with compliance across regulatory standards. Prominent companies in tier 2 include COC Farmaceutici, Contract Pharmaceuticals Limited (CPL), DPT Laboratories, Ltd., Eurofins, Mikart, PharmaVision (Vizyon Holding) and Pierre Fabre.
Finally, Tier 3 companies, such as TriRx Pharmaceutical Services, UI Pharmaceuticals, Wasdell Group and Aphena Pharma. They specialize in specific products and cater to niche markets, adding diversity to the industry.
Overall, while Tier 1 companies are the primary drivers of the market, Tier 2 and 3 companies also make significant contributions, ensuring the industry remains dynamic and competitive.
The section below covers the industry analysis for the non-sterile outsourcing market for different countries. Market demand analysis on key countries in several regions of the globe, including North America, Asia Pacific, Europe, and others, is provided. The United States is anticipated to remain at the forefront in North America, with higher market share through 2034. In Asia Pacific, India is projected to witness a CAGR of 9.1% by 2034.
| Countries | Value CAGR (2024 to 2034) |
|---|---|
| USA | 5.5% |
| Germany | 6.0% |
| China | 10.3% |
| France | 5.5% |
| India | 9.1% |
| Spain | 6.3% |
| Japan | 6.2% |
| UK | 6.7% |
China non-sterile outsourcing is poised to exhibit a CAGR of 10.3% between 2024 and 2034. Currently, it holds the highest share in the East Asia market, and the trend is expected to continue during the forecast period.
China is at the forefront of the global non-sterile outsourcing market, owing to some major key drivers which fueled the growth. Of the major factors responsible, rapid growth in the biopharmaceuticals industry is leading the charge. This booming sector has provided huge business opportunities for the country's CDMO industries, attracting investments, and the outsourcing segment has thus prospered.
With a focus on innovation, heavy investments in R&D, and favorable government policies, the biopharmaceutical sector in China stands out with high growth. The growth of this segment is witnessed across a wide range of products, including also biologics, specialty pharmaceuticals, and advanced therapies requiring specialized capabilities in manufacturing.
The trend is such that biopharmaceutical companies are expanding their operations in China, and the strategic solution would be outsourcing the non-sterile manufacturing process, like tablets, capsules, and powders. Outsourcing allows these companies to use the expertise and infrastructure of specialized partners to assure high-quality production at minimal capital expenditures and with fewer operational complexities.
The center of pharmaceutical manufacturing in Germany is adherence to GMP guidelines. These practices involved in the routine activities include everything from facility conditions and equipment maintenance to employee training and documentation.
In this way, GMP practice contributes to outsourcing partners in Germany with the guarantees of creating manufactured non-sterile products in ideal controlled conditions, reduced contamination risks, and high product quality. Germany’s pharmaceutical industry operates within the framework of the European Medicines Agency (EMA) regulations, which harmonize standards across the EU.
Companies that outsource their services to German companies take advantage of the reputation that Germany has developed over time in creating quality, compliant medications. Such credibility is attractive to healthcare providers who are dependent on consistent and safe products to prescribe.
India’s non-sterile outsourcing market is poised to exhibit a CAGR of 9.1% between 2024 and 2034. Currently, it holds the highest share in the Asia Pacific market, and the trend is expected to continue during the forecast period.
The broad base of SMEs in the country significantly contributes to the non-sterile outsourcing market growth. SMEs have traditionally formed a major part of the country's pharmaceutical industry, leveraging their relatively smaller scale and areas of specialized expertise to contribute to market growth.
The majority of SMEs look for cost-effective manufacturing solutions, which complement the objectives of the nonsterile outsourcing concept. They offer production alternatives at low costs without compromising on quality, hence are strong partners for pharmaceutical companies in attempts to cut down on operational costs.
The majority of Indian SMEs have invested in state-of-the-art facilities working within international standards set by various regulatory bodies. This provides an assurance that this sector will supply quality-compliant non-sterile medicines, hence winning the confidence of big global pharmaceuticals.
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The section contains information about the leading segments in the industry. By dosage form, the oral segment holds the highest market share of 29.5% in 2024.
| By Dosage Form | Oral |
|---|---|
| Value Share (2024) | 29.5% |
The oral dosage form segment leads the non-sterile outsourcing market, since the product is highly used and simple to produce. Manufacturing these products follows a pretty established process and it involves less cost in comparison with the production of sterile products. Oral drugs are in high demand due to the convenience and their effectiveness that fuels this segment's leadership.
Such outsourcing partners can efficiently manage the large production volumes of oral medications through reaping economies of scale that help in cost reduction while maintaining the set regulatory standards. Oral drugs are indicated for treating several conditions, including chronic diseases, infections, and preventive health measures.
This is attributed to the huge demand that these medicinal products have, which fuels the growth of the non-sterile outsourcing market as the pharmaceutical companies look for efficient and cost-effective solutions for their production.
| By Application | Human Medicine |
|---|---|
| Value Share (2034) | 40.1% |
Non-sterile outsourcing mainly applies to human drugs that do not require severe controls on sterility. It may include manufacturing, packaging, and labeling not in a strictly speaking sterile environment.
Therefore, non-sterile outsourcing becomes very useful in handling the massive volumes of non-sterile products as it is flexible and accommodative in cost. In order to assure the safety and efficacy of such drugs, GMP and adequate quality controls are indispensable, even in non-sterile conditions.
The market players are using strategies to stay competitive, such as product differentiation through innovative formulations, strategic partnerships with healthcare providers for distribution. Another key strategic focus of these companies is to actively look for strategic partners to bolster their product portfolios and expand their global market presence.
Recent Industry Developments in Non-Sterile Outsourcing Market
In terms of dosage form, the industry is divided into oral- (mixtures, linctures, syrups, elixirs, mouth washes/gargles, drops). Ear & eye- (drops, lotions). Nasal- (drops, sprays). Topical- (gel, cream). Parenteral.
In terms of Application, the industry is segregated into human medication, nutraceuticals, cosmetics medical devices and veterinary health.
In terms of application, the industry is segregated into- pharmaceutical companies (human, veterinary), cosmeceuticals companies, nutraceutical companies and medical device manufacturers.
Key countries of North America, Latin America, East Asia, South Asia & Pacific, Western Europe, Eastern Europe, Middle East & Africa (MEA) have been covered in the report.
The global non-sterile outsourcing market is projected to witness CAGR of 5.7% between 2024 and 2034.
The global non-sterile outsourcing industry stood at USD 7,471.0 million in 2023.
The global non-sterile outsourcing market is anticipated to reach USD 13,746.9 million by 2034 end.
China is set to record the highest CAGR of 10.3% in the assessment period.
The key players operating in the global non-sterile outsourcing market include AbbVie Pharmaceutical Contract Manufacturing, Aenova Group, APPCO Pharmaceutical Corporation, Atral Pharmaceutical, Aurigene Pharmaceutical Services (Dr. Reddy’s), Biological E. Ltd., BioPlus Life Sciences, Bora Pharmaceuticals, Cambrex Corporation
1. Executive Summary 2. Industry Introduction, including Taxonomy and Market Definition 3. Market Trends and Success Factors, including Macro-Economic Factors, Market Dynamics, and Recent Industry Developments 4. Global Market Demand Analysis 2019 to 2023 and Forecast 2024 to 2034, including Historical Analysis and Future Projections 5. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034 6. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Dosage Form 6.1. Oral 6.1.1. Mixtures 6.1.2. Linctures 6.1.3. Syrups 6.1.4. Elixirs 6.1.5. Mouth Washes/Gargles 6.1.6. Drops 6.2. Ear & Eye 6.2.1. Drops 6.2.2. Lotions 6.3. Nasal 6.3.1. Drops 6.3.2. Sprays 6.4. Topical 6.4.1. Gel 6.4.2. Cream 6.5. Parenteral 7. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Application 7.1. Human Medication 7.2. Nutraceuticals 7.3. Cosmetics 7.4. Medical Devices 7.5. Veterinary Health 8. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By End User 8.1. Pharmaceutical Companies 8.1.1. Human 8.1.2. Veterinary 8.2. Cosmeceuticals Companies 8.3. Nutraceutical Companies 8.4. Medical Device Manufacturers 9. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Region 9.1. North America 9.2. Latin America 9.3. Western Europe 9.4. Eastern Europe 9.5. South Asia & Pacific 9.6. East Asia 9.7. Middle East & Africa 10. North America Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 11. Latin America Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 12. Western Europe Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 13. Eastern Europe Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 14. South Asia & Pacific Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 15. East Asia Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 16. Middle East and Africa Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 17. Sales Forecast 2024 to 2034 By Dosage Form, By Application and by End User for 30 Countries 18. Competition Outlook, including Market Structure Analysis, Company Share Analysis by Key Players, and Competition Dashboard 19. Company Profile 19.1. AbbVie Pharmaceutical Contract Manufacturing 19.2. Aenova Group 19.3. APPCO Pharmaceutical Corporation 19.4. Atral Pharmaceutical 19.5. Aurigene Pharmaceutical Services (Dr. Reddy’s) 19.6. Biological E. Ltd. 19.7. BioPlus Life Sciences 19.8. Bora Pharmaceuticals 19.9. Cambrex Corporation 19.10. COC Farmaceutici 19.11. Contract Pharmaceuticals Limited (CPL) 19.12. DPT Laboratories, Ltd. 19.13. Eurofins 19.14. JGL d.d. 19.15. Mikart 19.16. PharmaVision (Vizyon Holding) 19.17. Pierre Fabre 19.18. TriRx Pharmaceutical Services 19.19. UI Pharmaceuticals 19.20. Wasdell Group 19.21. Aphena Pharma 19.22. Syngene International
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Non-Sterile Outsourcing Market
