The U.S. drug discovery outsourcing market size was exhibited at USD 1.85 billion in 2023 and is projected to hit around USD 3.44 billion by 2033, growing at a CAGR of 6.39% during the forecast period 2024 to 2033.
Report Coverage | Details |
Market Size in 2024 | USD 1.97 Billion |
Market Size by 2033 | USD 3.44 Billion |
Growth Rate From 2024 to 2033 | CAGR of 6.39% |
Base Year | 2023 |
Forecast Period | 2024-2033 |
Segments Covered | Workflow, Therapeutic Area, Drug Type |
Market Analysis (Terms Used) | Value (US$ Million/Billion) or (Volume/Units) |
Country scope | U.S. |
Key Companies Profiled | Albany Molecular Research Inc.; EVOTEC; Laboratory Corporation of America Holdings; GenScript; Pharmaceutical Product Development, LLC; Charles River Laboratories International, Inc.; WuXi AppTec; Merck & Co., Inc.; Thermo Fisher Scientific Inc.; Dalton Pharma Services; Oncodesign; Jubilant Biosys; DiscoverX Corp.; QIAGEN; Eurofins SE; Syngene International Limited; Dr. Reddy Laboratories Ltd.; Pharmaron Beijing Co., Ltd.; TCG Lifesciences Pvt Ltd.; Domainex Ltd. |
The growing need for innovative drug options, escalating disease prevalence, and the surge in public-private partnerships focused on developing new molecules have significantly fueled collaborations between drug developers and service providers. Consequently, these collaborations have contributed to the increased market size.
U.S. is amongst the key markets in the international pharmaceutical industry and is responsible for around 26.0% of global drug discovery outsourcing market. Factors such as advanced infrastructure, increased R&D investments, and a rise in occurrence of various diseases are propelling the expansion of drug discovery outsourcing market in the U.S.
Furthermore, public-private partnerships established for the purpose of creating innovative drug molecules are anticipated to influence market growth within this region substantially. A significant aspect that attracts pharmaceutical R&D investments in U.S. is the relative freedom in drug pricing. This flexibility allows companies to recover their R&D costs and fosters increased productivity, encouraging further investment in the industry.
Following the initial phase of COVID-19 pandemic, various initiatives were implemented to mitigate the adverse effects on businesses. Numerous companies adopted specific strategies to counter the global pandemic’s influence on their operations. For example, in July 2022, Wuxi AppTec announced that its small molecule drug discovery platform had provided over 180,000 custom-synthesized compounds to clients during the first half of the year, marking a 35.0% growth compared to the previous year. The substantial growth in drug discovery services can primarily be attributed to the escalating demand for novel therapeutics post-COVID-19 pandemic.
Lead identification & candidate optimization dominated the market in 2023 accounting for nearly 34.0% of the revenue share. Based on workflow, the market is segmented into target identification and screening, lead identification & candidate optimization, target validation and functional informatics, preclinical development, and other associated workflows. Presence of considerable tools for prediction of drug safety with the use of in silico techniques results in a larger share of segment in drug development informatics.
Other associated workflows in the market, including tools, software, molecule visualization & handling instruments, and database management systems, are anticipated to register the fastest growth from 2024 to 2030. Factors such as intensive research on novel drug candidates, increased investment for outsourcing, and wide array of services offered by private entities in drug discovery can be attributed to the segment growth.
The respiratory system segment led the market in 2023 with nearly 14.7% revenue share. Other prominent areas of therapy utilizing drug discovery outsourcing include pain and anesthesia, oncology, ophthalmology, hematology, dermatology, and more. The incidence of respiratory disorders in the U.S. is significant, with chronic lower respiratory diseases being a major concern. According to the CDC, there were 142,342 deaths due to COPD in 2018, which equates to 42.9 deaths per 100,000 population. High incidence of respiratory disorders, such as bronchitis, tuberculosis, COPD, and asthma, and increasing cases of drug resistance have supported the segment growth.
Anti-infective therapy segment is anticipated to register the highest CAGR over the forecast period. Medications such as antifungals, antibiotics, antibacterial agents, antiprotozoal substances, and antivirals are included in this segment. Notable collaborations, such as Charles River Laboratories partnering with British Columbia cancer agencies, Antabio, and Pcovery, aim to develop new drug candidates for cancer, antifungal diseases, and cystic fibrosis infections, funded by Wellcome Trust. These collaborative efforts for novel drug discovery are expected to drive market growth.
Small molecules are pivotal in fostering innovative treatments, accounting for over 76.0% of the market revenue share in 2023, owing to the highly specialized capabilities and extensive resources required for their development. The financial burden of maintaining such resources internally often leads companies to seek external expertise.
Large molecule (biopharmaceuticals) is protein-based class of drugs that consist of more than 1,300 amino acids essentially optimized by versions of endogenous human proteins. These molecules hold great promise for disease diagnosis and prevention as demonstrated by early phase clinical trials. Moreover, significant investment for drug development entities are anticipated to drive the segment in the coming years.
This report forecasts revenue growth at country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Nova one advisor, Inc. has segmented the U.S. drug discovery outsourcing market
Workflow
Therapeutic Area
Drug Type