Formulation Development Outsourcing Market Overview

The Formulation Development Outsourcing Market is anticipated to experience substantial growth between 2025 and 2035, fueled by the increased demand for new drug development. Estimated at around USD 30.4 billion in 2025, the market is forecast to reach USD 73.5 billion by 2035, demonstrating a robust compound annual growth rate (CAGR) of 8.4% over the decade.

Formulation development outsourcing means pharmaceutical and biotech companies hiring external service partners to create and optimize drug formulation. It entails transforming active pharmaceutical ingredients (APIs) into stable, efficacious, and stable dosage forms like tablets, capsules, injectables, or topical creams. Formulation development aims at ensuring the drug will achieve the desired therapeutic effect, with adequate stability and bioavailability, and meet the standards of the regulators. Outsourcing this responsibility enables companies to take advantage of the technical know-how, sophisticated machinery, and regulatory acumen of such specialized contract development and manufacturing companies (CDMOs) or contract research organizations (CROs). It's particularly useful at the preclinical and clinical development stages when formulation issues might hinder or scupper product development.

By outsourcing, companies can reduce time-to-market, minimize infrastructure investments, and focus internal resources on core competencies like drug discovery or commercialization. Additionally, the complexity of modern therapeutics, such as biologics, controlled-release drugs, and combination therapies, often requires sophisticated formulation techniques that are better handled by external experts. The demand for formulation development outsourcing has been rising due to increasing R&D costs, patent expirations, and the need for rapid innovation in competitive markets. It also supports small and mid-sized companies that may lack in-house capabilities.

Formulation Development Outsourcing Market Drivers and Opportunities

Rising R&D Costs and Time Constraints is anticipated to lift the Formulation Development Outsourcing Market during the forecast period

​One of the key forces behind the market for drug development formulation outsourcings is the increasing expense and complexity of pharmaceutical research and development (R&D). Bringing a new drug to market takes time and money, often over a period of ten years and at a total of billions of dollars. As the need to bring innovative drugs to market sooner grows stronger, pharmaceutical companies seek to maximize resource utilization and minimize internal burden.

This enables them to offload early-phase technical activities to skilled CDMOs that have the in-house infrastructure, resources, and regulatory knowledge. Such organizations then have the capability of performing studies and creating dosage forms faster, thanks to expanded specializations and experience in working across a wide range of therapeutic areas and delivery systems.

This shortens the development timeframe, decreases fixed costs, and enables companies to achieve compliance milestones within the deadline. Additionally, contracting out preempts the likelihood of costly delays due to formulation-related issues, something that can halt clinical advancement. As R&D further moves in the direction of precision medicine and sophisticated biologics, contracting out becomes increasingly attractive in order to control the rising costs and technology requirements of drug development.

Increasing Demand for Specialized Drug Delivery Systems drives growth of Formulation Development Outsourcing Market

A key driver of the market is the growing need for innovative and sophisticated drug delivery systems. No longer just oral tablets, therapeutics today have evolved to focus on specialized delivery platforms like nanoparticles, liposomes, injectables, transdermal patches, and controlled-release drug delivery. These sophisticated systems aim to improve drug solubility, target specificity, patient compliance, and therapeutic effect.

Nonetheless, the creation of such systems calls for significant scientific knowledge, sophisticated machinery, and hands-on knowledge of working with new excipients and technologies—resources not usually found within the pharmaceutical firm, particularly in the case of medium and small companies. Outsourcing partners bring the knowledge of creating sophisticated delivery systems and the attendant regulatory routes to the table.

Opportunity for the Formulation Development Outsourcing Market

Growth of Biologics and Biosimilars is significant opportunities in the global Formulation Development Outsourcing Market

The increasing development of biosimilars and biologics poses a significant business opportunity to the market of formulation development. Products such as monoclonal antibodies, vaccines, and gene therapies are structurally and environmentally sensitive and require advanced formulation techniques to deliver stability, bioavailability, and safety. Biosimilars, as they are generic counterparts of the biologics, also need to be designed with adequate formulation to match the reference product and to meet strict regulatory requirements.

Several pharmaceutical companies don't have the in-house skills or equipment to undertake the unique challenges of formulation of biologics, such as cold chain logistics, protein aggregation mitigation, and extended stability. This creates a critical need to outsource to CDMOs with proven experience in formulation of biologics. Further, as biologics continue to dominate the pharmaceutical development pipeline—most notably in therapeutic areas such as oncology, immunology, and rare diseases—the need to accelerate development timelines and budgets grows. Outsourcing partners provide customized solutions, rapid prototyping, and process scalability to accelerate product development.

Formulation Development Outsourcing Market Scope

Formulation Development Outsourcing Market Report Segmentation Analysis

The global Formulation Development Outsourcing Market industry analysis is segmented into by Service Type, by Dosage form, by Application, by End-user and by region.

The Pre-formulation Service type segment is anticipated to hold the major share of the global formulation development outsourcing market

The Pre-formulation Service type segment will have the dominant position in the global formulation development outsourcing market owing to its key role in the initial drug development stages. It includes the meticulous analysis of the physicochemical characteristics of drug substances to help steer the decision-making of the right formulation approach. Based on knowledge of a drug’s solubility, stability, and compatibility with excipients, pharmaceutical companies have the ability to maximize prospects of success in the subsequent development stages.

The complexity of drug molecules and growing needs for tailored therapeutic answers have pushed firms to outsource pre-formulation services to specialized players with high-end capabilities. Outsourcing enables firms to cut timelines and R&D expenditures while assuring compliance with regulations. With more and more pharmaceutical and biotech firms prioritizing the speed of drug pipelines, steady demand will be seen in pre-formulation services that will further cement its leadership in the market.

The oral dosage form segment is anticipated to hold the highest share of the global formulation development outsourcing market during the projected timeframe.

The oral dosage form market is expected to lead the market for formulation development outsourcing across the forecasting period. This growth in the oral dosage form market occurs due to the prevailing preference for oral treatments among patients due to convenience, ease of administration, and painless delivery. Additionally, oral dosage forms like tablets, capsules, and powders have the advantage of being economical to manufacture and they have good patient compliance, hence preferred among drug developers. Pharmaceutical firms rely on oral dosage forms while developing oral formulations but suffer from issues like poor solubility and bioavailability, and therefore approach the services of the partners who utilize the best technologies and formulation capabilities.

The oncology application segment is anticipated to be the fastest CAGR segment of the market over the forecast period.

The oncology application segment is expected to experience the highest compound annual growth rate (CAGR) within the market for formulation development outsourcing during the forecast period. This growth mainly results from the growing cancer burden across the world and the acceleration in oncology-based drug development programs. Oncology drugs usually encompass very complicated molecules, targeted delivery mechanisms, and the necessity of precision dosing, and hence the formulation of such drugs becomes very complicated. Pharmaceutical and bio-tech companies are increasingly outsourcing the formulation development to specialized service providers that have the capabilities and the infrastructure to manage such complexities. A rise in personalized cancer therapy and the use of biologics also led to the growing demand for innovative formulation solutions specific to the needs of individual patients.

The Pharmaceutical and Biopharmaceutical Companies end-user segment dominated the market in 2024 and is predicted to grow at the highest CAGR over the forecast period.

Pharmaceutical and biopharmaceutical companies are the leading end-users in the global formulation development outsourcing market, and this segment is expected to maintain dominance while growing at the highest CAGR through the forecast period. These companies rely heavily on outsourcing to enhance their drug development efficiency, access specialized expertise, and reduce costs associated with in-house R&D. The complexity of modern drug molecules, coupled with the pressure to accelerate time-to-market, has driven these companies to collaborate with contract development organizations (CDOs) for advanced formulation support. Additionally, the globalization of clinical trials and rising regulatory demands necessitate robust, compliant, and scalable formulation solutions. As the pharmaceutical and biotech industries continue to expand and diversify their pipelines, their demand for external formulation development expertise will remain strong and continue to grow.

The following segments are part of an in-depth analysis of the global Formulation Development Outsourcing Market:

Formulation Development Outsourcing Market Share Analysis by Region

North America is projected to hold the largest share of the global Formulation Development Outsourcing Market over the forecast period.

North America will continue to have the greatest market share in the global market for the formulation development outsourcing market, spurred by the region's strong pharmaceutical and biotechnology industries. The region has high levels of investment in research and development, high densities of the world's top pharmaceutical companies, and a sophisticated regulatory environment headed by organizations such as the U.S. FDA. The region also hosts many contract development and manufacturing organizations (CDMOs) that have high levels of technological capabilities and experience in the development of complex formulation.

North America also takes the lead in the development of drug delivery systems and biologics, which demand specialized formulation support. With a growing need for speedy drug development timelines, along with the need to cut costs, the region's companies are prompted to outsource formulation services. With the growing incidence of chronic diseases and the escalating need for new therapies, the trend of outsourcing also continues to grow. With all of these factors combined, North America becomes the market leader in the global formulation outsourcing market.

Formulation Development Outsourcing Market Competition Landscape Analysis

The market is competitive, with several established players and new entrants offering a range of drug discovery outsourcing services. Such as, Catalent Inc., Charles River Laboratories, Piramal Pharma Solutions, Syngene International Ltd., Aizant Drug Research Solutions, Irisys LLC and Others

Global Formulation Development Outsourcing Market Recent Developments News:

• In February of 2024, the Danish pharmaceutical giant, Novo Nordisk, acquired the contract development and manufacturing organization (CDMO), Catalent Inc., for $16.5 billion. The acquisition represents a major move to enhance the manufacturing and distribution capabilities of Novo Nordisk, mainly of its GLP-1 products such as Wegovy and Ozempic. This takeover has been described as a possible paradigm shift in pharmaceutical outsourcing and the manner in which drug developers and CDMOs will work in the market going forward.
• In May 2024, AGC Biologics, a worldwide CDMO, partnered with BioConnection, a contract manufacturing organization (CMO), to offer complete biopharmaceutical development and manufacturing services. This partnership pairs AGC Biologics' drug substance development capabilities with BioConnection's aseptic filling capabilities to respond to the growing need for efficient end-to-end solutions for biopharmaceutical companies to reduce time-to-market for new treatments.
• In August 2022, Catalent Inc. added capabilities when it acquired Metrics Contract Services, a CDMO focused on oral solid dose formulation and manufacturing, in a $475 million deal. The acquisition adds to the capabilities of Catalent in integrated oral solid formulation development, manufacturing, and packaging.

The Global Formulation Development Outsourcing Market is dominated by a few large companies, such as

·         Catalent Inc.

·         Charles River Laboratories

·         Piramal Pharma Solutions

·         Syngene International Ltd.

·         Aizant Drug Research Solutions

·         Irisys LLC

·         Intertek Group PLC

·         Laboratory Corporation of America Holdings (LabCorp)

·         Thermo Fisher Scientific Inc.

·         Lonza Group AG

·         Dr. Reddy's Laboratories Ltd.

·         Cambrex Corporation

·         Hovione

·         PPD, Inc.

·         Dishman Carbogen Amcis

1.       Global Formulation Development Outsourcing Market Introduction and Market Overview

1.1.    Objectives of the Study

1.2.    Global Formulation Development Outsourcing Market Scope and Market Estimation

1.2.1.Global Formulation Development Outsourcing Market Overall Market Size (US$ Bn), Market CAGR (%), Market forecast (2025 - 2035)

1.2.2.Global Formulation Development Outsourcing Market Revenue Share (%) and Growth Rate (Y-o-Y) from 2021 - 2035

1.3.    Market Segmentation

1.3.1.Service Type of Global Formulation Development Outsourcing Market

1.3.2.Dosage Form of Global Formulation Development Outsourcing Market

1.3.3.Application of Global Formulation Development Outsourcing Market

1.3.4.End-user of Global Formulation Development Outsourcing Market

1.3.5.Region of Global Formulation Development Outsourcing Market

2.       Executive Summary

2.1.    Demand Side Trends

2.2.    Key Market Trends

2.3.    Market Demand (US$ Bn) Analysis 2021 – 2024 and Forecast, 2025 – 2035

2.4.    Demand and Opportunity Assessment

2.5.    Demand Supply Scenario

2.6.    Market Dynamics

2.6.1.Drivers

2.6.2.Limitations

2.6.3.Opportunities

2.6.4.Impact Analysis of Drivers and Restraints

2.7.    Emerging Trends for Formulation Development Outsourcing Market

2.8.    Porter’s Five Forces Analysis

2.8.1.Bargaining Power of Suppliers

2.8.2.Bargaining Power of Buyers

2.8.3.Threat of Substitutes

2.8.4.Threat of New Entrants

2.8.5.Competitive Rivalry

2.9.    PEST Analysis

2.9.1.Political Factors

2.9.2.Economic Factors

2.9.3.Social Factors

2.9.4.Technology Factors

2.10.  Key Regulation

3.       Global Formulation Development Outsourcing Market Estimates & Historical Trend Analysis (2021 - 2024)

4.       Global Formulation Development Outsourcing Market Estimates & Forecast Trend Analysis, by Service Type

4.1.    Global Formulation Development Outsourcing Market Revenue (US$ Bn) Estimates and Forecasts, by Service Type, 2021 - 2035

4.1.1.Formulation Optimization

4.1.2.Pre-formulation Services

4.1.3.Analytical Testing & Stability Studies

4.1.4.Others

5.       Global Formulation Development Outsourcing Market Estimates & Forecast Trend Analysis, by Dosage Form 

5.1.    Global Formulation Development Outsourcing Market Revenue (US$ Bn) Estimates and Forecasts, by Dosage Form, 2021 - 2035

5.1.1.Injectable

5.1.2.Oral

5.1.3.Topical

5.1.4.Others

6.       Global Formulation Development Outsourcing Market Estimates & Forecast Trend Analysis, by Application

6.1.    Global Formulation Development Outsourcing Market Revenue (US$ Bn) Estimates and Forecasts, by Application, 2021 - 2035

6.1.1.Oncology

6.1.2.Respiratory

6.1.3.Neurology

6.1.4.Infectious Disease

6.1.5.Cardiovascular Disease

6.1.6.Others

7.       Global Formulation Development Outsourcing Market Estimates & Forecast Trend Analysis, by End-user

7.1.    Global Formulation Development Outsourcing Market Revenue (US$ Bn) Estimates and Forecasts, by End-user, 2021 - 2035

7.1.1.Pharmaceutical and Biopharmaceutical Companies

7.1.2.Government and Academic Institutes

7.1.3.Others

8.       Global Formulation Development Outsourcing Market Estimates & Forecast Trend Analysis, by region

8.1.    Global Formulation Development Outsourcing Market Revenue (US$ Bn) Estimates and Forecasts, by region, 2021 - 2035

8.1.1.North America

8.1.2.Eastern Europe

8.1.3.Western Europe

8.1.4.Asia Pacific

8.1.5.Middle East & Africa

8.1.6.Latin America

9.       North America Formulation Development Outsourcing Market: Estimates & Forecast Trend Analysis

9.1.    North America Formulation Development Outsourcing Market Assessments & Key Findings

9.1.1.North America Formulation Development Outsourcing Market Introduction

9.1.2.North America Formulation Development Outsourcing Market Size Estimates and Forecast (US$ Billion) (2021 - 2035)

9.1.2.1.   By Service Type

9.1.2.2.   By Dosage Form

9.1.2.3.   By Application

9.1.2.4.   By End-user

9.1.2.5.   By Country

9.1.2.5.1.     The U.S.

9.1.2.5.2.     Canada

9.1.2.5.3.     Mexico

10.   Western Europe Formulation Development Outsourcing Market: Estimates & Forecast Trend Analysis

10.1.  Western Europe Formulation Development Outsourcing Market Assessments & Key Findings

10.1.1.   Western Europe Formulation Development Outsourcing Market Introduction

10.1.2.   Western Europe Formulation Development Outsourcing Market Size Estimates and Forecast (US$ Billion) (2021 - 2035)

10.1.2.1.    By Service Type

10.1.2.2.    By Dosage Form

10.1.2.3.    By Application

10.1.2.4.    By End-user

10.1.2.5.    By Country

10.1.2.5.1. Germany

10.1.2.5.2. Italy

10.1.2.5.3. U.K.

10.1.2.5.4. France

10.1.2.5.5. Spain

10.1.2.5.6. Benelux

10.1.2.5.7. Nordics

10.1.2.5.8. Rest of W. Europe

11.   Eastern Europe Formulation Development Outsourcing Market: Estimates & Forecast Trend Analysis

11.1.  Eastern Europe Formulation Development Outsourcing Market Assessments & Key Findings

11.1.1.   Eastern Europe Formulation Development Outsourcing Market Introduction

11.1.2.   Eastern Europe Formulation Development Outsourcing Market Size Estimates and Forecast (US$ Billion) (2021 - 2035)

11.1.2.1.    By Service Type

11.1.2.2.    By Dosage Form

11.1.2.3.    By Application

11.1.2.4.    By End-user

11.1.2.5.    By Country

11.1.2.5.1. Russia

11.1.2.5.2. Hungary

11.1.2.5.3. Poland

11.1.2.5.4. Balkan & Baltics

11.1.2.5.5. Rest of E. Europe

12.   Asia Pacific Formulation Development Outsourcing Market: Estimates & Forecast Trend Analysis

12.1.  Asia Pacific Market Assessments & Key Findings

12.1.1.    Asia Pacific Formulation Development Outsourcing Market Introduction

12.1.2.    Asia Pacific Formulation Development Outsourcing Market Size Estimates and Forecast (US$ Billion) (2021 - 2035)

12.1.2.1.    By Service Type

12.1.2.2.    By Dosage Form

12.1.2.3.    By Application

12.1.2.4.    By End-user

12.1.2.5.    By Country

12.1.2.5.1. China

12.1.2.5.2. Japan

12.1.2.5.3. India

12.1.2.5.4. Australia & New Zealand

12.1.2.5.5. South Korea

12.1.2.5.6. ASEAN

12.1.2.5.7. Rest of Asia Pacific

13.   Middle East & Africa Formulation Development Outsourcing Market: Estimates & Forecast Trend Analysis

13.1.  Middle East & Africa Market Assessments & Key Findings

13.1.1.   Middle East & Africa Formulation Development Outsourcing Market Introduction

13.1.2.   Middle East & Africa Formulation Development Outsourcing Market Size Estimates and Forecast (US$ Billion) (2021 - 2035)

13.1.2.1.    By Service Type

13.1.2.2.    By Dosage Form

13.1.2.3.    By Application

13.1.2.4.    By End-user

13.1.2.5.    By Country

13.1.2.5.1. UAE

13.1.2.5.2. Saudi Arabia

13.1.2.5.3. Turkey

13.1.2.5.4. South Africa

13.1.2.5.5. Rest of MEA

14.   Latin America Formulation Development Outsourcing Market: Estimates & Forecast Trend Analysis

14.1.  Latin America Market Assessments & Key Findings

14.1.1.   Latin America Formulation Development Outsourcing Market Introduction

14.1.2.   Latin America Formulation Development Outsourcing Market Size Estimates and Forecast (US$ Billion) (2021 - 2035)

14.1.2.1.    By Service Type

14.1.2.2.    By Dosage Form

14.1.2.3.    By Application

14.1.2.4.    By End-user

14.1.2.5.    By Country

14.1.2.5.1. Brazil

14.1.2.5.2. Argentina

14.1.2.5.3. Colombia

14.1.2.5.4. Rest of LATAM

15.   Country Wise Market: Introduction

16.   Competition Landscape

16.1.  Global Formulation Development Outsourcing Market Product Mapping

16.2.  Global Formulation Development Outsourcing Market Concentration Analysis, by Leading Players / Innovators / Emerging Players / New Entrants

16.3.  Global Formulation Development Outsourcing Market Tier Structure Analysis

16.4.  Global Formulation Development Outsourcing Market Concentration & Company Market Shares (%) Analysis, 2023

17.   Company Profiles

17.1.      Catalent Inc.

17.1.1.    Company Overview & Key Stats

17.1.2.    Financial Performance & KPIs

17.1.3.    Product Portfolio

17.1.4.    SWOT Analysis

17.1.5.    Business Strategy & Recent Developments

    * Similar details would be provided for all the players mentioned below 

17.2.      Charles River Laboratories

17.3.      Piramal Pharma Solutions

17.4.      Syngene International Ltd.

17.5.      Aizant Drug Research Solutions

17.6.      Irisys LLC

17.7.      Intertek Group PLC

17.8.      Laboratory Corporation of America Holdings (LabCorp)

17.9.      Thermo Fisher Scientific Inc.

17.10.   Lonza Group AG

17.11.   Dr. Reddy's Laboratories Ltd.

17.12.   Cambrex Corporation

17.13.   Hovione

17.14.   PPD, Inc.

17.15.   Dishman Carbogen Amcis

17.16.   Other Prominent Players

18.   Research Methodology

18.1.  External Transportations / Databases

18.2.  Internal Proprietary Database

18.3.  Primary Research

18.4.  Secondary Research

18.5.  Assumptions

18.6.  Limitations

18.7.  Report FAQs

19.   Research Findings & Conclusion