Published: January 2024 | Report Code: 12827 | Available Format: PDF
The global drug discovery services market values an estimated USD 21.0 billion in 2023, which is expected to reach USD 54.2 billion by 2030, growing at a CAGR of 14.7% during 2024–2030.
The increasing R&D spending of the pharmaceutical and biopharmaceutical sectors, rising demand for outsourcing analytical testing services, initiatives for orphan drug and rare disease research, and expensive nature of the in-house drug development process are all opening up new revenue streams in the global market.
The rising prevalence of serious chronic diseases, including cancer, diabetes, cardiovascular diseases, and respiratory illnesses, as a result of the poor eating habits, increasing pollution levels, and surging cigarette use, has considerably fueled the expansion of the drug discovery services market. Additionally, the rapidly expanding geriatric population would have a favorable impact on the industry in the near future due to its higher vulnerability to numerous ailments. Further, the expansion of the sector is being aided by the involvement of several authorities, such as the FDA and EMA, in the approval of newly discovered pharmaceuticals. Moreover, the existence of multiple contract research organizations (CROs) in both developed and developing countries is drawing funding for research and development projects.
The demand for these services is also set to rise to meet the requirement for novel treatments for chronic illnesses, driven, in part, by the expansion in the global healthcare sector. Pharmaceutical and biopharmaceutical firms continue to outsource their research and development (R&D) tasks to CROs, who have positioned themselves to offer best-in-class R&D services and develop engagement models to maximize productivity and lessen the financial burden placed on pharmaceutical firms. Governments and pharmaceutical corporations are being compelled to explore such solutions and augment their investment in clinical trials due to the growing burden of chronic illnesses.
The need for outsourcing clinical trial and analytical test services is rising because of the biopharmaceutical industry's increasing spending on research and development activities, especially on orphan drugs for rare illnesses. The biopharmaceutical sector is growing quickly over the world as a result of the soaring demand for biologics and the development of a number of innovative and life-saving medications. Moreover, the biologics industry is encouraged to invest in the study and development of novel medicines for a variety of common and rare ailments. The market for drug discovery services is also expanding due to the expiration of patents as well as the rising need for biologics in emerging economies.
The hit-to-lead identification category holds the largest share, of 35%, in 2023. The iterative process of lead identification, also known as hit-to-lead, is a significant stage in early drug research. Outsourcing these services assists pharmaceutical companies in achieving higher economies of scale and effectiveness. The development of cutting-edge in-silico techniques to improve the lead identification process, such as computer-aided drug discovery (CADD) and structure-based drug designs, also supports the category’s expansion.
Hit-to-lead identification involves processes such as high-throughput screening (HTS), which is responsible for finding hits in chemical libraries that could be leads for medicinal chemistry optimization. HTS has been greatly aided by the technological advancements in robots, liquid handling, plate reader detection, and high-speed computing. The process still needs a highly specialized, pricey screening facility, which not every lab can afford. Institutions with limited funding, therefore, typically use the HTS services offered by external providers, such as CROs, as they offer external as well as internal academia and nonprofit institutions, along with the pharmaceutical and biotechnology industry, high-quality services at minimal costs. Therefore, there has been a rapid increase in the outsourcing of hit-to-lead identification services.
Market Size in 2023
USD 21.0 Billion
Market Size in 2024
USD 23.8 Billion
Revenue Forecast in 2030
USD 54.2 Billion
Market Trends, Drivers, and Restraints; Revenue Estimation and Forecast; Segmentation Analysis; Impact of COVID-19; Companies’ Strategic Developments; Market Share Analysis of Key Players; Company Profiling
By Process; By Type; By Drug Type; By Therapeutic Area; By End User; By Region
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The chemistry category dominates the industry, with a share of 60%, in 2023.
In the drug discovery process, from pre-clinical testing to the delivery of candidates, medicinal chemistry is used extensively. The medicinal chemistry market is expanding as a result of the growing trend of pharmaceutical companies outsourcing R&D services, as well as the rise in both the volume and the cost of drug research and development activities.
The small-molecule drugs category holds a significant market share. Small molecules are crucial in the creation of novel treatments for patients all over the world, and such pharmaceuticals account for half the sales of specialty drugs, a fact that can also be observed in the current approval trends.
For instance, the U.S. Food and Drug Administration approved 40 small-molecule medicines in 2020. These variants continue to be important cutting-edge therapies, accounting for over 75% of all the medications approved by the FDA in 2020. Cancer, autoimmune, cardiovascular, and respiratory disorders are four important therapeutic areas where small-molecule drugs continue to play a critical role in therapy.
Additionally, the increasing investments in the field, particularly in cancer research, are another factor encouraging the development of small-molecule drugs. They are more affordable, simpler to produce, and can be coupled with intracellular targets, thus making them ideal for oral administration, particularly for the treatment of chronic disorders. The ongoing research projects to look into and create novel therapies for different indications are, thus, expected to have a significant impact on the market growth.
The biologics drugs category is projected to be the most opportunistic during the projection period. Numerous life-saving medications, including those for the treatment of cancer, cardiovascular diseases, and diabetes, have been created by the biologics sector in recent times. It is predicted that this market will develop in the near future due to the rising prevalence of various chronic diseases and increasing awareness of the availability of various biologic medications.
Cardiovascular diseases hold the largest share, of 25%, in 2023. This is ascribed to the growing geriatric population around the world and the adoption of sedentary lifestyles, characterized by the consumption of high-calorie food, alcoholism, tobacco use, and lack of physical activity. Moreover, the increasing discretionary screen time, which involves watching TV and sitting in front of the computer for long hours, is linked to a high risk of cardiovascular diseases, as per a recent study. Furthermore, according to the WHO, CVDs are responsible for most non-communicable disease (NCD)-related deaths.
The oncology category also holds a significant share, which is mostly linked to the uptick in cancer-related medication research activity of late. The population's heightened propensity for various cancers has essentially fueled the oncology market's expansion. The International Agency for Research on Cancer estimates that there were around 19.3 million new cases of cancer and approximately 10 million related deaths in 2020. Lung cancer, breast cancer, colorectal cancer, and prostate cancer are the most-common kinds of this disease.
Moreover, the expansion of the oncology category is attributed to the increasing attention being paid to the discovery of new targets, to help in cancer treatment. For instance, AstraZeneca and Accent Therapies began working together in June 2020 to find, create, and market novel therapeutics that target RNA-modifying proteins (RMPs), for the treatment of cancer. Accent is in charge of the preclinical program, from R&D up to the conclusion of Phase I clinical trials.
The respiratory diseases category is expected to display fast growth during the forecast period as well. This is attributed to the increasing pollution levels and significantly rising smoking prevalence among adults. Resultingly, the high prevalence of respiratory conditions, such as bronchitis, TB, chronic obstructive pulmonary disease (COPD), and asthma, together with an increase in medication-resistant cases, has a positive impact on the category's growth.
As per our regional analysis, North America holds the largest market share, of 55%, in 2023. Several CROs and CMOs in the region support top biopharmaceutical and pharmaceutical firms, which promotes the expansion of the market for drug development services. Further, most newly produced medicines have their patents held by the U.S. Essentially, the expanding senior population and increasing prevalence of numerous chronic diseases in the U.S. are driving the market's expansion.
Furthermore, technological advancements in the pharmaceutical and biotechnology industries, established reimbursement policies, advanced medical infrastructure, increasing awareness among people regarding early disease diagnosis, and growing need to provide improved patient care drive the region’s market.
Additionally, Europe is predicted to account for a sizeable market share. This is attributed to the development of the healthcare infrastructure, the rise in chronic disease prevalence brought on by the rapid aging of the population, and the expansion of hospitals and other healthcare facilities. The growth of the pharmaceutical and medical device industries is also contributing to the expansion of the regional market.
This report offers deep insights into the drug discovery services market, with size estimation for 2017 to 2030, the major drivers, restraints, trends and opportunities, and competitor analysis.
Based on Process
Based on Type
Based on Drug Type
Based on Therapeutic Area
Based on End User
The market for drug discovery services values USD 21.0 billion in 2023.
The current CAGR of the drug discovery services industry is 14.7%.
The usage of AI and big data analytics in pharma and biopharma R&D is the key trend in the market for drug discovery services.
The hit-to-lead identification process dominates the drug discovery services industry.
Chemistry services are demanded more in the market for drug discovery services.
North America has the largest drug discovery services industry share.
APAC is growing the fastest in the market for drug discovery services.
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