Formulation Development Outsourcing Market Size, Share, & Industry Analysis Report: By Formulation, By Service (Preformulation and Formulation Development), By Therapeutic Area, By End Use, and By Region – Market Forecast, 2025–2034
- Published Date:Jun-2025
- Pages: 128
- Format: PDF
- Report ID: PM5691
- Base Year: 2024
- Historical Data: 2020-2023
Market Overview
The global formulation development outsourcing market size was valued at USD 37.23 billion in 2024 and is projected to register a CAGR of 8.4% during 2025–2034. Growing R&D in biologics, peptides, and targeted therapies requires advanced formulation techniques that many pharmaceutical firms outsource to specialized CDMOs.
The formulation development outsourcing market refers to the segment of the pharmaceutical and biotechnology industries where companies contract external service providers to design, optimize, and develop drug formulations. These services include pre-formulation studies, formulation optimization, stability testing, scale-up support, and regulatory documentation. Outsourcing this process allows pharmaceutical firms, especially small and mid-sized ones, to reduce costs, access specialized expertise, accelerate time-to-market, and focus on core research and development activities. Companies are increasingly outsourcing formulation work to reduce capital expenditure, gain flexibility, and speed up drug development timelines.
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Outsourcing helps manage risks associated with formulation failures while reducing infrastructure and operational costs, which is driving the formulation development outsourcing market growth. Additionally, outsourcing formulation development speeds up the drug testing and approval process, helping companies to bring new medicines to market quicker by using expert services that streamline the process.
Market Dynamics
Growth in Biopharmaceutical and Generic Drug Development
The growth in biopharmaceutical and specialty generic drug development has significantly increased the demand for efficient and cost-effective formulation strategies. According to the Pharmaceutical Research and Manufacturers Association, in 2023, the US biopharmaceutical sector reached ∼USD 96 billion in R&D expenditures, which is over 20% of total sales, highlighting a strong focus on innovation and new therapeutics. As the biosimilar and generics market expands, companies aim to develop high-quality products at lower costs and faster speeds. These drugs often require complex formulations to ensure bioavailability and stability, which many firms lack the internal resources to handle. This gap drives them to outsource to specialized contract providers who offer expertise and advanced capabilities. Outsourcing allows manufacturers to maintain product quality while reducing development time and costs. This trend is especially strong among smaller biotech firms and emerging pharmaceutical companies looking to compete in a growing market.
Advancements in Formulation Technologies
Advancements in formulation technologies are transforming how drugs are developed and delivered, creating new growth opportunities in the field of formulation development outsourcing. Innovations such as lipid-based delivery systems, solid dispersions, and sustained-release formulations help improve drug solubility, absorption, and effectiveness. Developing these advanced formulations requires specialized knowledge and equipment that not all pharmaceutical companies possess internally. As a result, more companies are turning to expert service providers who deliver tailored solutions. For instance, in March 2025, Croda's Avanti Research expanded its ionizable lipid portfolio for lipid nanoparticle (LNP) drug development through a partnership with Certest. This collaboration focuses on improving the design and formulation of LNPs to enhance the delivery and efficacy of RNA-based therapies. These advancements support the development of more effective treatments, especially for complex diseases. Contract formulation developers play a key role in bringing innovative medicines to patients faster and more efficiently.
Segment Insights
Market Assessment by Therapeutic Area
Based on therapeutic area, the market segmentation includes oncology, infectious disease, neurology, hematology, respiratory, cardiovascular, dermatology, and others. In 2024, the oncology segment held the largest share due to the surge in demand for precision oncology therapeutics and the rapid pace of clinical pipeline expansion. Increasing complexity in formulating novel small molecules and biologics, particularly antibody-drug conjugates (ADCs), cancer immunotherapies, and targeted oral formulations, has pushed pharmaceutical companies to rely heavily on specialized outsourcing partners. CROs and CDMOs offering advanced capabilities in nanoparticle delivery systems, solubility enhancement techniques, and parenteral dosage forms have become pivotal. Moreover, regulatory acceleration for cancer therapies has compressed development timelines, further incentivizing sponsors to outsource formulation expertise to reduce risk and cost.
The cardiovascular segment is expected to witness the highest CAGR during the forecast period, fueled by a sharp rise in reformulation projects and fixed-dose combination (FDC) therapies for chronic conditions such as hypertension, heart failure, and dyslipidemia. The growing demand for modified-release tablets and transdermal delivery systems, particularly in elderly populations requiring long-term adherence, is reshaping outsourcing needs. Additionally, innovation in lipid-based and nano-formulations to enhance the bioavailability of poorly soluble cardiovascular agents is gaining traction. Outsourcing partners equipped with bioequivalence study support and GMP-compliant scale-up capabilities are being increasingly integrated into early-stage hypertension drug pipelines.
Market Evaluation by End Use
Based on end use, the segmentation includes pharmaceutical and biopharmaceutical companies, government and academic institutes, and others. In 2024, the pharmaceutical and biopharmaceutical companies segment held the largest share due to aggressive portfolio diversification and increasing dependence on external formulation partners for complex dosage forms. The need to accelerate time-to-market for niche, high-value therapies such as cell and gene therapies, long-acting injectables, and mRNA-based platforms has driven these firms to engage specialized CDMOs with proprietary technologies and end-to-end capabilities. Outsourcing has also become essential for bridging internal gaps in preformulation analytics, regulatory dossier support, and cGMP manufacturing readiness, especially for small to mid-sized companies lacking in-house infrastructure.
The government and academic institutes segment is expected to witness the highest CAGR during the forecast period due to their expanding role in translational research and early-stage drug discovery. Increased public funding for therapeutic innovation, particularly in orphan diseases and pandemic preparedness, has encouraged partnerships with CDMOs that can support preclinical formulation strategies and niche-scale GMP production. Many academic institutions are evolving into incubators for spin-offs and biotech collaborations, necessitating external formulation expertise to bridge lab-scale feasibility with clinical trial readiness. Enhanced focus on tech transfer and regulatory alignment is also reinforcing outsourcing as a strategic component in these settings.
Regional Analysis
By region, the study provides insights into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. In 2024, Asia Pacific held the largest share due to the surge in regional biopharmaceutical innovation, a rapidly expanding generics industry, and the proliferation of global outsourcing hubs in countries such as India, China, and South Korea. According to the India Brand Equity Foundation, India's biopharmaceutical sector constitutes 49% of the bioeconomy and contributes ∼USD 39.4 billion to the economy. By 2025, the vaccination market in India is projected to be valued at USD 3.04 billion. Regulatory harmonization under initiatives such as ASEAN CTA and ICH alignment in China has increased the confidence of multinational sponsors to leverage APAC-based CROs and CDMOs. These service providers offer competitive advantages through advanced formulation technologies, integrated preclinical-to-commercial services, and substantial cost-efficiency. Furthermore, strong government incentives for pharmaceutical R&D, coupled with rising demand for novel formulations across growing middle-class populations, are attracting foreign investments and contract partnerships, consolidating Asia Pacific’s position as the preferred destination for outsourced formulation development.
The North America formulation development outsourcing market is projected to register the highest CAGR during the forecast period, driven by an upsurge in biotech venture capital, accelerated drug pipelines, and a strategic focus on complex and high-value formulations. Increasing adoption of advanced drug delivery platforms such as lipid nanoparticles for mRNA therapies, depot injections for CNS disorders, and inhalable biologics is pushing sponsors to collaborate with CDMOs offering proprietary technologies and late-stage formulation scalability. Regulatory pathways such as the FDA’s breakthrough therapy and fast track designation are compressing development timelines, intensifying the reliance on agile, US-based outsourcing partners. Additionally, the region’s leadership in digitalized formulation tools, predictive analytics, and QbD (Quality by Design) practices is reinforcing its position as a key growth engine in outsourced development services.
Key Players & Competitive Analysis Report
The competitive landscape of the formulation development outsourcing market is characterized by intensified industry analysis, dynamic market expansion strategies, and a sharp focus on technological differentiation. Players are increasingly leveraging joint ventures and strategic alliances to enhance capabilities in complex dosage forms, bioavailability enhancement, and novel delivery systems. Mergers and acquisitions have become central to consolidating market presence and accelerating access to high-growth therapeutic segments, particularly oncology and rare diseases. Post-merger integration efforts are heavily focused on harmonizing analytical platforms, regulatory compliance systems, and GMP-certified manufacturing networks to ensure operational continuity and scale.
Technology advancements in AI-enabled formulation modeling, high-throughput screening, and predictive stability profiling are emerging as competitive levers. The surge in demand for personalized medicine and biologics has pushed CDMOs to invest in modular formulation platforms and adaptive fill-finish technologies. Additionally, launches of innovative service models, including virtual formulation labs and end-to-end development-as-a-service solutions, are reshaping client engagement. The shift toward risk-based outsourcing and quality-by-design (QbD) frameworks is further compelling market participants to enhance technical depth and regulatory readiness. Overall, the competitive dynamics are defined by a convergence of scientific innovation, operational agility, and strategic alignment, aimed at capturing share in a rapidly evolving, compliance-driven global outsourcing environment.
Thermo Fisher Scientific Inc., headquartered in Waltham, Massachusetts, is a global provider of scientific instrumentation, reagents, and consumables. The company serves a diverse range of sectors, including biotechnology, pharmaceuticals, and environmental testing, offering products and services that support research, clinical, and industrial applications. Thermo Fisher operates through key segments such as Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Services. It is recognized for its extensive portfolio that aids in scientific research and improves patient outcomes, with a focus on delivering high-quality solutions and maintaining operational excellence.
Eurofins Scientific specializes in analytical testing and laboratory services, offering a wide range of solutions worldwide. The company was founded in 1987 and is headquartered in Luxembourg City, Luxembourg. It provides services across various sectors, including agroscience, consumer and human safety, biopharma, environmental testing, and clinical diagnostics. The company's portfolio encompasses analytical methods and tests to assess the safety, identity, composition, authenticity, traceability, origin, and purity of diverse products. Eurofins' services span agro testing, assurance, consumer product testing, cosmetics and personal care testing, environment testing, and food and feed testing. They also offer audit and certification, training, consulting, forensic services, genomic services, materials and engineering testing, and more.
List of Key Companies in Formulation Development Outsourcing Market
- Catalent Inc.
- Charles River Laboratories International, Inc.
- Element
- Eurofins Scientific SE
- Intertek Group plc
- Labcorp
- Lonza
- Recipharm
- SGS S.A.
- Thermo Fisher Scientific, Inc.
Formulation Development Outsourcing Industry Developments
In May 2024, AGC Biologics and BioConnection partnered to provide a comprehensive end-to-end solution for biopharmaceutical drug substance and product development and manufacturing. This collaboration offers a streamlined one-stop-shop for large pharma, mid-sized biotech firms, and startups, along with an innovative option for evaluating the implications of the US BIOSECURE Act.
In July 2023, Aenova and Galvita established a strategic alliance aimed at enhancing the development, formulation, and manufacturing processes for oral dosage forms. This partnership seeks to leverage their respective expertise to optimize the efficiency and effectiveness of producing high-quality pharmaceutical products.
Formulation Development Outsourcing Market Segmentation
By Formulation Outlook (Revenue, USD Billion, 2020–2034)
- Oral
- Injectable
- Topical
- Others
By Service Outlook (Revenue, USD Billion, 2020–2034)
- Preformulation
- Formulation Development
By Therapeutic Area Outlook (Revenue, USD Billion, 2020–2034)
- Oncology
- Infectious Disease
- Neurology
- Hematology
- Respiratory
- Cardiovascular
- Dermatology
- Others
By End Use Outlook (Revenue, USD Billion, 2020–2034)
- Pharmaceutical and Biopharmaceutical Companies
- Government and Academic Institutes
- Others
By Regional Outlook (Revenue, USD Billion, 2020–2034)
- North America
- US
- Canada
- Europe
- Germany
- France
- UK
- Italy
- Spain
- Netherlands
- Russia
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- Malaysia
- South Korea
- Indonesia
- Australia
- Vietnam
- Rest of Asia Pacific
- Middle East & Africa
- Saudi Arabia
- UAE
- Israel
- South Africa
- Rest of Middle East & Africa
- Latin America
- Mexico
- Brazil
- Argentina
- Rest of Latin America
Formulation Development Outsourcing Market Report Scope
|
Report Attributes |
Details |
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Market Size Value in 2024 |
USD 37.23 billion |
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Market Size Value in 2025 |
USD 40.33 billion |
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Revenue Forecast by 2034 |
USD 83.55 billion |
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CAGR |
8.4% from 2025 to 2034 |
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Base Year |
2024 |
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Historical Data |
2020–2023 |
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Forecast Period |
2025–2034 |
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Quantitative Units |
Revenue in USD Billion and CAGR from 2025 to 2034 |
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Report Coverage |
Revenue Forecast, Competitive Landscape, Growth Factors, and Industry Trends |
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Segments Covered |
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Regional Scope |
|
|
Competitive Landscape |
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Report Format |
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Customization |
Report customization as per your requirements with respect to countries, regions, and segmentation. |
FAQ's
The global market size was valued at USD 37.23 billion in 2024 and is projected to grow to USD 83.55 billion by 2034.
The global market is projected to register a CAGR of 8.4% during the forecast period.
In 2024, Asia Pacific held the largest share due to a surge in regional biopharmaceutical innovation and a rapidly expanding generics industry.
A few of the key players include Catalent Inc.; Charles River Laboratories International, Inc.; Element; Eurofins Scientific SE; Intertek Group plc; Labcorp; Lonza; Recipharm; SGS S.A.; and Thermo Fisher Scientific, Inc.
In 2024, the oncology segment held the largest share due to the surge in demand for precision oncology therapeutics and the rapid pace of clinical pipeline expansion.
The government and academic institutes segment is expected to witness the highest CAGR during the forecast period due to their expanding role in translational research and early-stage drug discovery.
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