The global drug discovery services market was estimated to be US$ 25.72 Billion in 2022 and is expected to reach US$ 109.61 Billion by 2032 at a CAGR of 15.6%.
Drug discovery services refer to a range of specialized services provided by contract research organizations (CROs) and other service providers to support the process of discovering and developing new drugs. These services typically cover various stages of the drug discovery and development process, including target identification, hit identification, lead optimization, preclinical studies, and early-stage clinical trials.
Drug discovery services are designed to help pharmaceutical and biotechnology companies identify and develop potential drug candidates in a cost-effective and time-efficient manner. Drug discovery services are utilized by companies to outsource certain aspects of their drug discovery process to external experts with specialized expertise and resources, allowing them to focus on their core competencies and accelerate the drug development timeline.
Drug Discovery Services Market Drivers
Rising prevalence of chronic diseases is driving the market growth
The demand for innovative and effective drugs is increasing due to the rising burden of diseases and the need for better treatment options. Patients and healthcare providers are seeking novel therapies with improved efficacy and safety profiles, driving the drug discovery services market.
Additionally, the pharmaceutical and biotechnology industries are investing heavily in R&D activities to discover and develop new drugs, creating demand for services that can support the drug discovery process. This includes investments in basic research, preclinical studies, clinical trials, and development of new technologies and platforms.
Moreover, the rising prevalence of chronic diseases, such as cancer, cardiovascular diseases, diabetes, and infectious diseases like COVID-19, has created a need for new and effective drugs. The drug discovery services market is fueled by the demand for services that can identify and develop drug candidates to address these health challenges.
Service Type Segmentation of Global Drug Discovery Services Market
Biology Services is the largest segment in the market
Based on service type, the largest segment in the global drug discovery services market is "Biology Services". Biology services encompass a wide range of activities related to understanding the biological mechanisms and interactions of potential drug candidates, including target identification, hit identification, and preclinical testing. This segment is typically larger due to the high demand for services related to the biological evaluation of drug candidates, which involves extensive testing and analysis of their efficacy, safety, and pharmacological properties in various biological systems.
Additionally, biology services are critical in the early stages of drug discovery, as they play a crucial role in identifying and validating potential drug targets and evaluating the biological activity of drug candidates. The success of drug discovery and development heavily relies on a deep understanding of the biology of diseases and the mechanisms of action of potential drug candidates.
Furthermore, advancements in molecular biology, genomics, proteomics, and other related fields have led to an increased emphasis on biology services in drug discovery, enabling the identification and validation of novel targets and the development of more effective and targeted drug candidates. This has resulted in a higher demand for biology services, making it the largest segment in the drug discovery services market.
Regional Trends of the Global Drug Discovery Services Market
United States is the global drug discovery services market
Geographically, the global drug discovery services market is segmented into North America, Europe, Asia-Pacific, Middle East and Africa, and South America.
Following are some of the major trends in these regions –
North America: North America, particularly the United States, dominates the global drug discovery services market. The region has a well-established pharmaceutical and biotechnology industry, with major players headquartered in the U.S. There is a high level of investment in research and development (R&D) in drug discovery, driven by robust funding, technological advancements, and a favorable regulatory environment.
North America also has a large pool of contract research organizations (CROs) offering drug discovery services, catering to the needs of pharmaceutical and biotechnology companies.
Europe: Europe is another significant market for drug discovery services. Countries like the United Kingdom, Germany, and Switzerland have a strong presence of pharmaceutical and biotechnology companies, along with a growing CRO industry. The region has a favorable regulatory framework, a well-developed healthcare infrastructure, and a high focus on R&D, which supports the growth of the drug discovery services market in Europe.
Asia-Pacific: Asia-Pacific is a rapidly growing market for drug discovery services, with countries like China, Japan, and India emerging as key players in the pharmaceutical and biotechnology sectors. The region offers cost-effective and skilled labor for drug discovery services, making it an attractive destination for outsourcing drug discovery activities.
The growing middle-class population, increasing healthcare spending, and rising prevalence of chronic diseases in Asia-Pacific are driving the demand for drug discovery services in the region.
Middle East and Africa: The Middle East and Africa region is still a nascent market for drug discovery services, with limited market share. However, there is increasing investment in healthcare infrastructure, rising awareness about the importance of drug discovery, and growing partnerships with global pharmaceutical companies, which are expected to drive the growth of the drug discovery services market in the region.
South America: South America is a developing market for drug discovery services, with Brazil being the key market in the region. The region has a growing pharmaceutical industry, increasing R&D investments, and a favorable regulatory environment, which are expected to drive the demand for drug discovery services in South America.
Key players and market strategies:
Companies operating in the global drug discovery services market employ various growth strategies to expand their market presence and achieve business objectives.
Some of the major growth strategies adopted by these companies include:
Mergers and Acquisitions: Companies often pursue mergers and acquisitions to expand their capabilities, reach, and customer base. This allows them to gain access to new technologies, expertise, and resources, and strengthen their market position. For example, in 2020, Charles River Laboratories International Inc. acquired Cellero, a leading provider of custom immune cell and serum products, to enhance its cell and gene therapy offerings.
Collaborations and Partnerships: Companies engage in collaborations and partnerships with other pharmaceutical/biotechnology companies, contract research organizations (CROs), academic institutions, and research organizations to leverage complementary strengths and capabilities. This allows them to pool resources, expertise, and knowledge, and accelerate drug discovery programs. For instance, in 2021, AstraZeneca and Eli Lilly entered into a global research collaboration to co-develop and co-commercialize potential cancer medicines.
New Product Launches: Companies constantly innovate and launch new services or technologies to cater to evolving customer demands and stay competitive. This allows them to expand their service offerings and tap into new market segments. For example, in 2020, Eurofins Scientific launched a COVID-19 testing service for detecting the virus in environmental samples, catering to the growing demand for COVID-19 testing during the pandemic.
Geographic Expansion: Companies expand their geographical footprint to tap into new markets and leverage regional opportunities. This involves setting up new facilities, establishing partnerships, and entering into strategic alliances in different regions. For instance, in 2021, WuXi AppTec expanded its presence in Europe by opening a new site in Ireland, aiming to provide integrated solutions for drug discovery and development to European customers.
Albany Molecular Research Inc., Charles River Laboratories International Inc., Covance Inc., Domainex Ltd., Evotec SE, GenScript Biotech Corporation, GVK Biosciences Pvt. Ltd., IQVIA Holdings Inc., Jubilant Biosys Ltd., Lonza Group Ltd., Merck KGaA ,PerkinElmer Inc., Pharmaron Inc., Syngene International Ltd., WuXi AppTec Co. Ltd. and many more.
Global Drug Discovery Services Market Segmentation:
By Service Type:
- Drug Metabolism and Pharmacokinetics (DMPK) Services
- Biology Services
- Medicinal Chemistry Services
- Drug Screening and Pharmacology Services
- Pharmaceutical Services
- Others
By Drug Type:
- Small Molecule Drugs
- Biologics
By End User:
- Pharmaceutical and Biotechnology Companies
- Contract Research Organizations (CROs)
- Academic and Research Institutes
- Others
By Therapeutic Area:
- Oncology
- Cardiovascular Diseases
- Neurological Disorders
- Infectious Diseases
- Immunology
- Respiratory Diseases
- Others
By Region
- North America
- United States
- Canada
- Rest of North America
- Europe
- Germany
- United Kingdom
- Italy
- France
- Spain
- Rest of Europe
- Asia Pacific
- Japan
- India
- China
- Australia
- South Korea
- Rest of Asia Pacific
- Middle East & Africa
- UAE
- Saudi Arabia
- South Africa
- Rest of the Middle East & Africa
- South America
- Brazil
- Rest of South America
