Drug Discovery Services Market To Generate $54.2 Billion Revenue by 2030
- Published: January 2024
The global drug discovery services market revenue is expected to reach USD 54.2 billion by 2030, exhibiting a CAGR of 14.7% during 2024–2030. This can be ascribed to the rise in the incidence of chronic illnesses, the increase in the government spending on the healthcare industry, and the surge in the frequency of mergers, acquisitions, and business partnerships.
Moreover, AI has the potential to enhance medication discovery. Thus, drug discovery service providers are expected to benefit from the use of artificial intelligence (AI) to examine the results of the research on drugs. Before a chemical is created or generated, AI could assist in examining the structure of proteins, to help forecast how it will affect the target, and identify potential safety concerns. This, coupled with the gradual rise in the healthcare spending, helps advance pharmaceutical technology and drive the market eventually.
Additionally, an increase in the number of mergers and acquisitions as well as partnerships between companies, to gain a competitive edge, is predicted to fuel the industry expansion. For instance, in September 2021, Eurofins and Liverpool ChiroChem Ltd. partnered to expand their combined drug discovery platform, DiscoveryOne, to offer enhanced chemical knowledge, using LCC's fragment library and PROTAC linker molecules. Moreover, Convance and Medable established a partnership in 2020 to implement a decentralized trial technology.
Furthermore, during the projection period, there will be a lucrative potential for the sector due to the rising investments in the development of innovative technologies and the increasing opportunities in emerging markets.
Pharmaceutical and Biotechnology Companies To Lead Industry
Pharmaceutical and biotechnology companies hold the largest share, of 45%, in 2023, because of the rise in the count of R&D initiatives for new medications. In addition, drug discovery services allow access to a wide range of screening platforms and chemical libraries. These services elevate the chances of identifying potential drug candidates, thereby helping these companies in enhancing their product offerings.
Additionally, an increasing number of biotechnology and pharmaceutical firms are adopting outsourcing services for drug R&D from early to late phase because of rise in R&D expenses. Outsourcing is a cost-effective solution for the biotechnology and pharmaceutical businesses that lack the critical resources required for the development of new products. Hence, many pharmaceutical and biotechnology firms outsource their R&D operations to contract research organizations (CROs) as they seek to make drug development and market entrance simpler. With CROs, it is no longer necessary for huge pharmaceutical companies to handle everything in house. Furthermore, along with governmental bodies (including the NIH and EMA), CROs also assist foundations, universities, and research institutions.
Moreover, for the pharma or biotech industry, CROs take care of highly specialized and concentrated R&D tasks. Their knowledge in such areas is highlighted by their specialization in particular development process elements or therapeutic subfields. Preclinical, clinical, and regulatory compliance services are provided by the knowledgeable and error-proof personnel in these organizations for drug development and commercialization. They also offer a broad range of services for the clinical trial operations of small biotech businesses, with the primary goal of bridging the time to market gap through the efficient use of innovative approaches.
Asia-Pacific Is Expected To Register Highest Growth Rate
During the projection period, the APAC market is predicted to have the greatest CAGR. A major factor behind this growth is the aging population, which frequently needs medication for a variety of acute and chronic diseases.
In addition, because of the presence of trained laborers, lower production costs, a supportive regulatory framework, and availability of high-quality data, the region is quickly becoming a center for outsourcing drug discovery activities. Additionally, the expansion will be fueled by the increasing investments in medical facilities, rising demand for better care, and growing number of businesses opening drug production sites in APAC nations.
Japan is likely to offer a strong opportunity to CROs since it holds a significant share of the global pharmaceutical market. The amended Pharmaceutical Affairs Law encourages research on cancer and tissue diagnostics in Japan, which is set to stimulate the market expansion. Additionally, organizations such as the Japan Agency for Medical Research and Development (AMED) have been founded with the goals of managing research and clinical trial data and enhancing R&D infrastructure.
Key players in the market include Charles River Laboratories International Inc., Eurofins Scientific (Ireland) Limited, Frontage Laboratories, Inc., Galapagos NV, General Electric, Laboratory Corporation of America Holdings, Thermo Fisher Scientific Inc., Syngene International Limited, and WuXi AppTec.