North America Topical Drugs CDMO Market 2030: The Power of Contract Manufacturing

The North American topical drugs CDMO market is experiencing a robust expansion, with an estimated value of USD 13.03 billion in 2023. This market is projected to surge at a compelling compound annual growth rate (CAGR) of 10.7% from 2024 to 2030. Several key factors are fueling this significant growth. These include a rising trend in healthcare outsourcing, a persistent drive for improved patient care, substantial R&D investments spurred by the increasing prevalence of various skin diseases, and the impending expiration of existing drug patents. Furthermore, the integration of advanced development and manufacturing technologies, coupled with the inherent cost-effectiveness offered by Contract Development and Manufacturing Organizations (CDMOs) and a growing number of these specialized firms, are positively influencing this market’s trajectory.

CDMOs stand out with their superior expertise and resources, particularly concerning clinical trials, and they offer more cost-effective manufacturing solutions compared to in-house operations of pharmaceutical companies. Their proficiency in managing the development of innovative drugs for specific therapeutic applications further boosts their demand in the market. The escalating need for novel innovations and new product development is expected to significantly enhance market demand. Additionally, competitive pressures and pricing concerns are increasingly prompting pharmaceutical companies to outsource their new drug development and manufacturing processes, which is anticipated to drive overall market expansion. A burgeoning focus on creating advanced drug delivery technologies to improve drug stability and patient outcomes is also poised to propel market growth. Moreover, continuous technological advancements empower CDMOs to address a diverse range of therapeutic needs in topical drugs, encompassing treatments for various skin conditions, wound care, pain management, and dermatological disorders, thereby accelerating market growth.

Get a preview of the latest developments in the North America Topical Drugs CDMO Market Download your FREE sample PDF copy today and explore key data and trends

The utility of topical medications extends beyond traditional skin conditions. These formulations are increasingly being employed for pain relief, wound healing, scar reduction, and even cosmetic applications. This broadening spectrum of applications is set to open up new avenues for pharmaceutical innovation and development within topical drug formulations. Crucially, affordability and accessibility are driving factors in the demand for topical drug CDMO services. The cost-effectiveness of topical drug development and manufacturing through CDMOs, as opposed to in-house processes, combined with technological advancements and the creation of innovative drug delivery systems to meet rising product demand, are all contributing to the overall market growth.

The growing consumer emphasis on self-care is leading to increased consumption of both pharmaceutical products and cosmeceuticals. This heightened demand for topical drugs, coupled with the rising trend of outsourcing among topical drug manufacturers, is encouraging the expansion of manufacturing capabilities across various locations to meet the surging needs. For instance, in November 2023, SOHM, Inc. inaugurated a new Good Manufacturing Practice (GMP) manufacturing facility in Carlsbad, California, specifically designed for topical products, boasting a daily capacity of 1,892 liters. Similarly, in April 2022, BORA Pharmaceuticals committed USD 10 million to expand its oral solid dose capabilities at its facilities in Taiwan (Zhunan) and Mississauga, Ontario. This investment was strategically planned over two years to cater to increasing client demand.

Detailed Segmentation

Product Type Insights

Semi-solid formulations segment led the market and accounted for a revenue share of 66.2% in 2023. The segment growth is driven by increasing interest in semi-solid dosage forms, rising R&D activities, and a growing pipeline of semi-solid topical drugs, among others. Semi-solid dosage forms are usually present in various formulations, such as creams, ointments, and lotions. These dosage forms consist of active dissolved or uniformly dispersed ingredients in a suitable base and excipients. In addition, various advantages of semi-solid formulations include ease of use, rapid preparation, and local delivery capabilities. The interest in this segment has increased in recent years due to these benefits, fueling the demand for CDMOs with expertise in developing these products.

Service Type Insights

The contract manufacturing segment dominated the market in 2023. The growth of the segment can be attributed to a surge in the number of CDMOs entering the topical drugs CDMO industry. Several pharmaceutical companies are outsourcing topical formulations manufacturing to CDMOs owing to cost-effectiveness and less capital investment, which is one of the key factors contributing to segment growth. Furthermore, strong presence of small and midsized market players with advanced manufacturing capabilities in the region, leads to introduction of high-quality end products and ensures the effectiveness & safety of pharmaceutical products is expected to boost the market. Moreover, rising adoption of generic drugs and growing trend of Rx-to-OTC switches positively impact topical drug outsourcing to cater to a large customer base with an affordable price range, which is expected to support segment growth.

Sponsors Insights

Pharmaceutical companies accounted for the largest market revenue share in 2023. Increasing R&D investments by pharmaceutical companies to develop and commercialize topical drugs are propelling market demand. The large presence of small and middle-scale pharmaceutical companies with limited infrastructure & capital investment is expected to drive overall market demand. Moreover, the market demand for pharmaceutical companies can be attributed to the growing number of pharmaceutical companies ramping up their investments and product innovations in topical drugs. Moreover, most pharmaceutical companies are looking to outsource topical drug manufacturing due to rationalizing their own facilities. Furthermore, a significant increase in regulatory approvals for various topical products by pharmaceutical companies is boosting the demand for outsourced services. For instance, in July 2022, Incyte announced U.S. FDA approval for the topical cream Opzelura for the treatment of vitiligo. Hence, constant outsourcing of topical drugs and innovation of products in pharmaceutical companies have led market players to increase their product sales, which is expected to drive the market.

Country Insights

The U.S. dominated the market and accounted for a revenue share of 88.3% in 2023. This can be attributed to top manufacturing hubs for highly reliable, complex, and high-end pharmaceuticals. Moreover, biopharmaceutical companies are focusing on the U.S. market due to the booming healthcare industry in the country, which is supporting the country’s considerable market revenue. Increased outsourcing practices by topical drug companies and support of CDMOs in reducing operational and capital expenses are among the key factors accelerating market growth. In addition, strong R&D practices in the country and promotion of new therapeutics have significantly contributed to the considerable market share held by the U.S. Furthermore, the need to maintain high client satisfaction amid intense competition is anticipated to fuel market expansion in the country.

Key North America Topical Drugs CDMO Companies:

The following are the leading companies in the North America Topical Drugs CDMO market. These companies collectively hold the largest market share and dictate industry trends.

• dsm-firminich
• Kerry Group plc
• Cargill, Incorporated
• Archer Daniels Midland Company (ADM)
• Ingredion
• Corbion N.V.
• Tate & Lyle PLC
• International Flavors & Fragrances Inc.
• Lesaffre Group
• BASF SE

North America Topical Drugs CDMO Market Segmentation

Grand View Research has segmented the North America topical drugs CDMO market based on product type, service type, sponsors, and country:

North America Topical Drugs CDMO Product Type Outlook (Revenue, USD Million, 2018 – 2030)

• Semi-solid Formulations
• Liquid Formulations
• SolidFormulations
• Transdermal Products

North America Topical Drugs CDMO Service Type Outlook (Revenue, USD Million, 2018 – 2030)

• Contract Development
• Contract Manufacturing

North America Topical Drugs CDMO Sponsors Outlook (Revenue, USD Million, 2018 – 2030)

• Pharmaceutical Companies
• Biopharmaceutical Companies
• Others

North America Topical Drugs CDMO Country Outlook (Revenue, USD Million, 2018 – 2030)

• U.S.
• Canada

Curious about the North America Topical Drugs CDMO Market? Download your FREE sample copy now and get a sneak peek into the latest insights and trends

Recent Developments

• In November 2023, SOHM, Inc. announced the establishment of a new manufacturing facility in Carlsbad. The new facility will manufacture SOHMbrand Rx topical and OTC products. It would handle all orders while its main facility in downtown San Diego is being renovated. In addition, 2,500 square feet have been allocated to store finished products. This will broaden the company’s service offerings and gain a competitive edge in the market.
• In October 2023, Ascendia Pharmaceuticals, Inc. partnered with Ampio Pharmaceuticals, Inc. to provide services to support Ampio’s OA-201 clinical development for treating symptomatic osteoarthritis pain. This has enhanced the company’s revenue generation capabilities.
• In December 2022, Formulated Solutions LLC announced an agreement to acquire a new 455,000 ft2 FDA-approved pharmaceutical semisolids, liquids, aerosol, BoV, and metered dose nasal spray production facility in Cleveland. The acquisition is anticipated to enhance Formulated Solutions LLC’s service offering in topical products.