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January 2025
The Europe pharmaceutical CDMO market size is calculated at USD 35.48 billion in 2024, grew to USD 37.98 billion in 2025, and is projected to reach around USD 70.05 billion by 2034. The market is expanding at a CAGR of 7.04% between 2025 and 2034. The growing research and development activities, increasing investments, and favorable government policies drive the market.
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Contract development and manufacturing organization (CDMO) is a service that allows pharmaceutical companies to conduct research and manufacturing. They possess the required infrastructure and facilities to carry out advanced research on behalf of the company. They offer a wide range of services, from formulation development to supply chain management. The major advantages of pharmaceutical and biotechnology companies include reduced costs, accelerated time to market, and compliance with regulatory standards. Partnering with CDMOs enables pharmaceutical companies to focus on drug discovery and marketing. Additionally, CDMOs assist clients who want to outsource specific steps in their process.
Recent advancements in science and technology enable growing European research and development activities. European companies aim to turn fundamental research into innovative treatments that are widely available and accessible to patients. The rising incidences and prevalence of chronic disorders necessitate the development of novel therapies. The increasing adoption of advanced technologies to drive the latest innovations in research and manufacturing favors the market. The increasing investments, collaborations, and mergers & acquisitions also contribute to market growth. Europe accounted for a total of 22.7% of the global pharmaceutical sales in 2023.
Artificial intelligence (AI) has been an integral part of the healthcare sector, including the CDMO sector. AI has revolutionized the CDMO sector by enhancing drug discovery and development processes and introducing automation. It can improve manufacturing efficiency and quality control. AI and machine learning (ML) algorithms analyze vast amounts of data and identify optimal process conditions, reducing the total number of experimental runs. This significantly reduces the cost and time required for developing and manufacturing products. AI and ML help to decrease human intervention, ultimately reducing manual errors. Additionally, AI-based predictive analytics can detect potential quality deviations or non-compliance issues in real-time. AI can also assist in streamlining the supply chain of pharmaceutical products. Thus, AI can drive the latest innovations and accelerate the delivery of life-saving therapeutics to patients.
Regulatory Compliance
The major growth factor of the Europe pharmaceutical CDMO market is the stringent regulatory compliance. CDMOs provide relevant expertise and regulatory compliance to pharmaceutical companies. These companies need to maintain high equipment costs, sophisticated technology, and an ever-evolving field of knowledge. On the other hand, CDMOs prioritize good manufacturing practice (GMP) guidelines to promote safe processes. They possess suitable equipment and advanced technologies to conduct research and large-scale manufacturing. They also help in stringent regulatory compliance to assist in the marketing approval of novel products. They help ensure that pharmaceutical products meet the necessary quality and compliance standards for safety, purity, and efficacy. Hence, CDMOs can reduce the overall expenses of research and manufacturing and accelerate the time to market. This ultimately ensures pharmaceutical and biotechnology companies stay competitive in the rapidly evolving market.
High Initial Costs
The major challenge faced by market players is the high initial costs of CDMOs. The fee-for-service model is generally higher and more expensive, significantly impacting the project budget. This restricts several companies from outsourcing their projects, hindering the market growth.
Growing Research and Development
The future of the Europe pharmaceutical CDMO market is promising, driven by growing research and development activities. The rising incidences of chronic disorders expedite the development of novel pharmaceutical products. Several pharmaceutical companies in Europe are focusing on developing cell and gene therapy products and biologicals. The growing demand for personalized medicines also promotes the market. The development of these products requires specialized facilities and equipment, facilitating the demand for CDMOs. The increasing investments and favorable government policies accelerate the development of novel pharmaceutical products. In 2023, the research-based pharmaceutical companies invested around € 50,000 million in R&D in Europe. The growing research and development lead to an increasing number of clinical trials in Europe. It is estimated that around 3700 clinical trials are authorized annually.
By product, the API segment registered its dominance over the Europe pharmaceutical CDMO market in 2024. The demand for active pharmaceutical ingredients (API) products is significantly increasing due to new product approvals annually and generics as therapeutics. According to the IQVIA report, around 70% of all medicines sold in Europe are generics. This increases the need for large-scale manufacturing of APIs at a faster rate to cater to a larger population. Pharma companies partner with CDMOs to overcome challenges involved in commercial API manufacturing, such as complex synthesis processes and regulatory compliance. CDMOs address these challenges with the presence of skilled professionals and rigorous quality control systems.
By workflow, the commercial segment held the largest share of the Europe pharmaceutical CDMO market in 2024. The increasing incidences of chronic disorders and rising population necessitate developing and manufacturing pharmaceutical products, potentiating the segment’s growth. Several government agencies and the European Union have imposed regulations for the timely delivery of medicines to patients, fulfilling unmet medical needs and ensuring the affordability and accessibility of medicines. Hence, favorable government policies also promote the segment’s growth. Additionally, the increasing number of pharmaceutical startups in Europe, which lack advanced facilities and expertise, require CDMOs, boosting the segment’s growth.
By application, the oncology segment held a dominant presence in the Europe pharmaceutical CDMO market in 2024. The rising incidences of cancer and growing research and development activities augment the segment’s growth. Cancer is the second most important cause of death and morbidity in Europe, with more than 3.7 million cases and 1.9 million deaths. Approval for new products also contributes to the segment’s growth. In 2024, EMA approved a total of 28 medicines for cancer treatment involving 13 drugs with new active substances and 10 generics. The increasing funding by government and private organizations for oncology research and development promotes the segment’s growth. The Union for International Cancer Control (UICC) opened a call for proposals in December 2023 with grants of up to 500,000 Euros for research projects of two years.
By end-use, the large pharmaceutical companies segment led the Europe pharmaceutical CDMO market in 2024. Large pharmaceutical companies are mostly involved in multidisciplinary tasks to develop a wide variety of products. They predominantly prefer to partner with CDMOs to manufacture diverse pharmaceutical products. This eliminates their need to set up a separate research facility and manufacturing plant. The availability of suitable capital investments also potentiates the demand for CDMOs.
Germany dominated the Europe pharmaceutical CDMO market in 2024. The presence of key players and increasing investments are the major growth factors contributing to market growth in Germany. Key players such as Richter BioLogics, Adragos Pharma, Luye Pharma AG, etc., hold the major share of the market. Germany is the fourth largest market for pharmaceuticals in the world. The increasing number of pharmaceutical CDMO facilities in Germany and increasing investments also potentiate the market. Favorable government policies and initiatives fuel market growth. The German government released a new Pharma Strategy to strengthen pharmaceutical research and production in Germany and to improve market access and pricing environment. The strategy will improve the conditions for the pharmaceutical industry in Germany.
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France is anticipated to grow at the fastest rate in the market during the forecast period. The favorable trade policy and the increasing number of CDMOs drive the market. France's export of pharmaceutical products was around $37.34 billion in 2023. France is the 7th largest exporter of pharmaceutical products globally. This necessitates commercial and large-scale manufacturing of pharmaceutical products. The growing demand for biotherapeutics such as antibodies, peptides, vaccines, and cell therapy products increases the need for CDMOs. The French government also supports foreign-direct investment to strengthen France in the healthcare sector. The government has also encouraged to accelerate the production of essential medicines to increase patient accessibility.
Alberto Santagostino, CEO of AGC Biologics, on the appointment of its new CEO, commented that the company will become a friendly CDMO to work with by leveraging technical talent, established centers of excellence, commercial track record, growing capacity at their global sites, and the solidity of the parent company to offer reliability while staying uncomplicated.
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