Healthcare Contract Manufacturing Market Size, Share, Growth, Trends, and Global Industry Analysis: By Service Type (Contract Manufacturing, Contract Packing, Contract Development, and Others), By Product Type (Pharmaceuticals, Biologics, Medical Devices, and Nutraceuticals), By End-User (Pharmaceutical Companies, Biotechnology Firms, Medical Device Companies, and Research Institutions), and Region Forecast 2020-2031

Healthcare Contract Manufacturing Market size was valued at US$ 174.8 billion in 2024 and is projected to reach US$ 351.6 billion by 2031 at a CAGR of 10.5% from 2025-2031. The market refers to the worldwide industry where third-party companies, known as contract manufacturing organizations (CMOs), are contracted by healthcare firms, including pharmaceutical, biotechnology, and medical device companies, to manufacture products, components, or provide specialized production-related services on their behalf.

The market is primarily driven by the growing demand for cost efficiency and operational flexibility among pharmaceutical and medical device companies. As product development becomes more complex and expensive, outsourcing to contract manufacturers helps firms reduce capital investment, focus on core functions, and accelerate time-to-market. This is especially critical for small to mid-sized players navigating pricing pressures and increasing competition from generics and biosimilars. A major trend shaping the market is the shift toward end-to-end, integrated service models, where CMOs provide comprehensive support from development through distribution. This reduces fragmentation, improves efficiency, and aligns with the need for faster, global product rollouts.

The strongest opportunity lies in the rising demand for biologics and biosimilars, which require highly specialized manufacturing capabilities. Patent expiries of blockbuster biologics and supportive biosimilar regulations in emerging markets further expand growth potential. However, the market faces notable restraints, particularly the risk of intellectual property theft and loss of proprietary control when outsourcing to regions with weaker IP laws. Compliance risks, quality inconsistencies, and raw material dependencies also challenge smooth operations. Overall, while the market presents vast opportunities through innovation and integration, navigating these risks will be essential for sustainable, long-term growth.

Facts & Figures

• Rising Demand for Biologics & Biosimilars: Biologic therapies, such as mAbs, cell and gene therapies, require complex production processes that heavily favor outsourcing to specialized CDMOs. For instance, in 2024, the FDA approved 18 biologic entities, and over 50 biosimilars were on the U.S. market. CMOs with biologics capacity are experiencing high demand.
• Capacity Expansion & Infrastructure Investment: CMOs are scaling up to meet surging biotech product demand by expanding facilities and increasing production lines. For instance, in April 2025, Amgen invested $900?million in an Ohio biologics plant, and Samsung Biologics completed Plant?5 in Korea, bringing total capacity to 784,000?L.
• Strategic M&A and Partnerships: Consolidation and joint ventures are streamlining capabilities, boosting scale, and offering end-to-end solutions. For instance, in July 2025, Brookfield/EQT acquired Gland Pharma, a Hyderabad CDMO, which could become one of the largest deals in the sector.
• Shifts Toward End-to-End, Integrated Service Models: Pharmaceutical clients prefer CMOs that support all stages, from development to packaging and regulatory compliance. For instance, Industry-wide adoption of integrated CDMO platforms and digitalization, e.g., Samsung Biologics’ fully AI?enabled service.

Key Developments

• In July 2025, Thermo Fisher is purchasing Sanofi’s sterile fill-and-finish facility in Ridgefield, New Jersey, to bolster U.S.-based production of essential medicines. The move aligns with both companies’ capex commitments, Sanofi’s $20B and Thermo Fisher’s $2B in U.S. investments.
• In March 2025, India’s Syngene International acquired Emergent’s Baltimore biologics plant for $36.5M, he company's first U.S. facility, boosting its large-molecule capacity from 20,000?L to 50,000?L.
• March 2025, Mallinckrodt and Endo announced a $6.7B stock-and-cash merger combining generics and sterile injectables. The move aims to streamline operations, tap into synergy, and strengthen U.S. injectable supply chains.
• In February 2025, Belgium-based Ardena acquired Catalent’s Somerset, NJ, drug-product site, adding oral solid-dose and bioanalytical capacity and establishing a key U.S. operational base.

Healthcare Contract Manufacturing Market Segmentation

Based on the service type

• Contract Manufacturing
• Contract Packing
• Contract Development
• Others

The contract manufacturing holds the largest market share in the market. This dominance is driven by the increasing outsourcing of drug and medical device production to third-party manufacturers to reduce operational costs, increase scalability, and meet complex regulatory requirements. Pharmaceutical and biotech companies, especially small to mid-sized firms, rely on contract manufacturers for formulations, API production, and finished dosage manufacturing. The demand is further fueled by the rise in biologics, sterile injectables, and generics. In contrast, contract packing currently holds the smallest share, as it typically comes into play later in the value chain and involves less strategic complexity compared to manufacturing or development services.

Based on the product type

• Pharmaceuticals
• Biologics
• Medical Devices
• Nutraceuticals

The pharmaceuticals segment holds the largest market share in the market. This is primarily due to the high global demand for generic drugs, over the counter (OTC) medications, and specialty formulations, all of which are commonly outsourced to CMOs for cost-effective, large-scale production. The generic drug boom, driven by patent expirations and pricing pressure, has particularly accelerated pharmaceutical outsourcing. Moreover, small and mid-sized pharma companies often lack the infrastructure for in-house manufacturing, further strengthening this segment. While biologics are growing rapidly due to demand for complex therapies, and medical devices also contribute significantly, nutraceuticals currently account for the smallest market share, largely due to lower regulatory complexity and fewer specialized manufacturing requirements.

Based on the end-user

• Pharmaceutical Companies
• Biotechnology Firms
• Medical Device Companies
• Research Institutions

Based on end-use, pharmaceutical companies account for the largest market share in the market. These companies increasingly outsource manufacturing to reduce production costs, speed up time-to-market, and access specialized technologies, especially in the production of generics, sterile injectables, and complex formulations. As patent cliffs and pricing pressures mount, even large pharma firms are relying on CMOs to maintain competitiveness and focus on core functions like R&D and commercialization. Biotechnology firms are also rapidly increasing outsourcing, particularly for biologics and biosimilars, but still trail in volume compared to traditional pharma. The research institutions represent the smallest share, as their focus lies more in discovery and early-phase development, often handing off manufacturing needs to industry partners later in the pipeline.