Drug Discovery Services Market Size To Touch USD 33.2 Bn By 2030

Published Date : 25 Jan 2023

The global drug discovery services market size was evaluated at USD 14.11 billion in 2022 and is expected to touch USD 33.2 billion by 2030 with a noteworthy CAGR of 11.3% from 2022 to 2030.

Drug discovery belongs to the fields of medicine, biotechnology, and pharmacology. Through this, new drugs for disease treatment are discovered. The compound identified using drug discovery can be used to treat and cure diseases. It has now evolved significantly as a result of emerging technologies. 

Drug discovery makes the process more refined, accurate, and time-consuming. Traditionally, drugs were discovered by determining the active ingredient from conventional remedies. Now, it also involves the determination of screening hits and their optimization to increase affinity, efficiency, selectivity, and oral bioavailability. The process of drug discovery starts once the compound that meets all of these requirements is identified. 

Drug discovery is a capital-intensive process involving significant investments by pharmaceutical companies and national governments. The federal governments provide funds and loans for drug discovery. It is a lengthy, expensive, complex, and inefficient process. In the 21st century, basic discovery is funded by governments and philanthropic organizations, while pharmaceutical companies fund the final stage. 

A drug undergoes several phases of clinical trials before launching into the market. It must pass through a new drug approval procedure called the New Drug Application in the USA. Drug Discovery can be a commercial or a public health success and helps identify new therapeutics. 

Growth Factors 

The heavy investments in the research & development activities by the biopharmaceutical industry majorly drive the global drug discovery services market. In line with this, the rising demand for outsourcing clinical trials and analytical tests significantly contributes to market growth. The surging research activities on orphan medicines and chronic disease prevalence positively influence market growth. 

The increasing research on rare diseases and the burgeoning demand for biopharmaceutical drugs catalyze market growth. The significant growth of the biologics industry across the world propels market growth. The development of several innovative and effective drugs fuels market growth. The heavy investments in the research and development of new drugs for various acute diseases favor market growth. 

The surging demand for biologics and the patent expiry strengthen the market growth. The rising prevalence of various chronic diseases such as cancer, diabetes, cardiovascular, and respiratory diseases boosts the overall market growth. Unhealthy food habits, rising pollution, and increasing tobacco consumption stimulate market growth. The rapidly growing geriatric population across the world and the surging susceptibility of senior people to various diseases catalyze market growth. 

The presence of multiple contract research organizations across the globe creates a positive outlook for the market. The growing burden of various diseases such as cardiovascular diseases, diabetes, cancer, respiratory diseases, and neurological disorders significantly contributes to market growth. The favorable government regulations fuels market growth. The heavy investments by pharmaceutical companies boost the market growth.  

Drug Discovery Services Market Report Scope

Report Coverage Details
Market Size in 2022 USD 14.11 Billion
Market Size by 2030 USD 33.2 Billion
Growth Rate from 2022 to 2030 CAGR of 11.3%
Base Year 2022
Forecast Period 2022 to 2030
Segments Covered By Drug Type, By Process, By Type and By Therapeutic Area
Regions Covered  North America, Europe, Asia-Pacific, Latin America and Middle East & Africa

Report Highlights: 

  • Based on the drug type, small molecules segmented dominated the market and accounted for the largest revenue share as these are simple, well-defined, and easy to characterize. Small molecule drugs are witnessing higher demand among the population and are much more effective. It can easily affect the cells and provides effective treatment. On the other hand, biologics are expected to witness a promising CAGR due to the significant growth in the biologics industry and the launch of life-saving drugs that can effectively treat various non-communicable diseases such as cancer, cardiovascular, and diabetes. The increasing awareness about the benefits of biologics and the rising prevalence of various chronic diseases catalyze market growth.  
  • Based on the type, the medicinal chemistry segment dominated the market and accounted for the largest revenue share due to the increasing demand for drug discovery services and the rising outsourcing by biopharmaceutical companies. 
  • Based on the therapeutic area, the oncology segment dominated the market due to the surging drug discovery activities related to cancer and the escalating prevalence of different types of cancer among the population. On the other hand, diabetes is estimated to be the most opportunistic segment during the forecast period due to the increasing prevalence of cancer among the population, changing lifestyles, and unhealthy eating habits.  

Regional Snapshots 

Based on the region, North America dominated the market and accounted for the largest revenue share due to the presence of several top biopharmaceutical and pharmaceutical companies and the increasing number of CROs and CMOs in the region. The rising prevalence of various chronic diseases and the growing geriatric population positively influence market growth across the region. 

The spreading awareness regarding biologics and the high demand for new and innovative drugs catalyzes the growth of the drug discovery services market in the North American region. The high healthcare expenditure propels market growth. On the other hand, Asia Pacific is expected to witness a promising CAGR due to the presence of several top research organizations and the increasing awareness regarding biologics.

The rising demand for innovative biologic drugs and the favorable government policies propel the market growth across the region. The increasing geriatric population and the rising prevalence of Chronic conditions catalyze the market growth. 

Market Dynamics: 

Driver: Rising demand for novel therapies for various therapeutic purposes 

The increasing demand for novel therapies for various therapeutic purposes significantly contributes to market growth across the globe. In line with this, the rising demand for novel medicine for chronic diseases and significant growth in the healthcare industry positively influences market growth. 

The growing outsourcing of research and development activities of pharmaceutical and biopharmaceutical companies to contract research organizations (CROs) and the surging burden of chronic diseases catalyze market growth. The heavy investments in clinical trials create a positive outlook for the market. 

The increasing prevalence of Chronic conditions such as diabetes, dementia, and cardiovascular disease propel the market growth. The increase in R&D spending for producing novel drugs favors market growth. The unhealthy urban lifestyle and the rising Geriatric population boost the overall market growth. The escalating demand for advanced and innovative drugs, surging healthcare costs, and the patent expiration of various drugs fuel the market growth. 

Opportunity: Increasing research and development expenditure in pharmaceutical and biopharma companies 

The increasing research and development expenditure in pharmaceutical and biopharmaceutical companies offers numerous opportunities for market growth. The market players are heavily investing in the research and development of novel drugs. Pharmaceutical companies are heavily investing in drug discovery. The pharmaceutical and biopharma companies are highly research and development intensive. Pharmaceutical and biopharma companies invest in research and development activities to launch new and innovative drugs in the market. 

The companies are expanding their research and development efficiencies by heavily investing. Many companies are choosing to outsource their services. The outsourcing of clinical trials and analytical tests and the increasing demand for biopharmaceutical treatments catalyze market growth. The launch of various novels and effective life-saving biologics and patent expirations propel the market growth. 

Restraint: High cost of drug molecules 

The high cost of drug molecules restricts the drug discovery market growth. The lack of skilled labor and the increasing drug molecule failure rate hampers the market growth. The drug development costs are very high, which further impedes the market growth. The clinical phases and research and development of drug discovery involve enormous costs.  

Challenge: Stringent Regulations 

The stringent regulations governing drug discovery and animal usage challenge the drug discovery services market growth. The achievement of safety and efficacy is the priority of regulatory authorities. These regulations raise the manufacturing cost of drugs. These regulations further regulate the use of animals in the drug discovery process. 

The increasing concerns about animals have made the concerned authorities impose various legislations for animal use and their safety. All these factors challenge the drug discovery services market growth. The shortage of skilled professionals in the CROs further hampers the market growth. 

Key Developments: 

  • In 2020, PharmaResources entered into a partnership with Eurofins to develop a drug discovery platform for developing small-molecule drugs. 
  • In 2020, Convance entered into a partnership with Medable to adopt a decentralized trial technology. 

Major Key Players:

  • Abbott Laboratories Inc.
  • Advinus Therapeutics
  • Agilent Technologies Ubiquigent
  • Albany Molecular Research Inc.
  • AstraZeneca PLC
  • Aurigene
  • Bayer AG
  • Charles River Laboratories International
  • ChemBridge Corporation
  • Covance

Market Segmentation

By Process

  • Target Selection
  • Target Validation
  • Hit to Lead Identification
  • Lead Optimization
  • Candidate Validation

By Drug Type

  • Small Molecules
  • Biologics

By Type

  • DMPK
  • Biology Services
  • Medicinal Chemistry

By Therapeutic Area

  • Oncology
  • Cardiovascular Diseases
  • Diabetes
  • Neurology
  • Respiratory Diseases
  • Others

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