Formulation Development Outsourcing Market Overview

The Formulation Development Outsourcing Market size is projected to witness significant growth from 2025 to 2033, driven by the rising demand for new drug development. Valued at approximately USD 30.4 billion in 2025, the market is expected to reach USD 60.5 billion by 2033, reflecting a strong compound annual growth rate (CAGR) of 9.1% over the forecast period.

Formulation development outsourcing involves pharmaceutical and biotechnology companies partnering with external service providers to design and refine drug formulations. This process includes converting active pharmaceutical ingredients (APIs) into stable, effective dosage forms such as tablets, capsules, injectables, or topical applications. The goal is to ensure that drugs deliver the intended therapeutic effects, maintain stability and bioavailability, and comply with regulatory requirements. Outsourcing formulation development allows companies to leverage the specialized expertise, advanced technologies, and regulatory knowledge of contract development and manufacturing organizations (CDMOs) or contract research organizations (CROs). This approach is especially valuable during the preclinical and clinical development phases, where formulation challenges can delay or derail product progress.

By outsourcing, firms can accelerate time-to-market, reduce capital expenditures on infrastructure, and allocate internal resources toward core functions such as drug discovery and commercialization. The increasing complexity of modern therapies—such as biologics, controlled-release formulations, and combination drugs—further reinforces the need for specialized formulation capabilities that external partners can provide.

Formulation Development Outsourcing Market Drivers and Opportunities

Rising R&D Costs and Time Constraints Expected to Drive the Formulation Development Outsourcing Market Growth

​ A major factor propelling the growth of the formulation development outsourcing market trends is the escalating cost and complexity associated with pharmaceutical research and development (R&D). Developing a new drug can take over a decade and require investments amounting to billions of dollars. With increasing pressure to accelerate time-to-market for innovative therapies, pharmaceutical companies are prioritizing efficient resource allocation and reducing internal operational burdens.

To address these challenges, many firms are turning to contract development and manufacturing organizations (CDMOs) to handle early-phase technical processes. These specialized partners offer the infrastructure, expertise, and regulatory insight needed to develop and optimize formulations more quickly and effectively. Their broad experience across diverse therapeutic areas and advanced delivery systems allows them to expedite studies and produce high-quality dosage forms—enabling pharma companies to stay competitive in a fast-paced industry.

Rising Demand for Advanced Drug Delivery Systems Fuels Growth in the Formulation Development Outsourcing Market

The increasing demand for innovative and advanced drug delivery systems is a major factor driving the growth of the formulation development outsourcing market. Modern therapeutics have progressed far beyond conventional oral tablets, with growing emphasis on specialized delivery technologies such as nanoparticles, liposomes, injectables, transdermal patches, and controlled-release systems. These advanced platforms are designed to enhance drug solubility, improve target specificity, increase patient adherence, and optimize therapeutic outcomes.

However, developing these complex delivery systems requires deep scientific expertise, access to advanced equipment, and practical experience with novel excipients and formulation technologies—capabilities that are often lacking, especially among small and mid-sized pharmaceutical companies. By partnering with experienced outsourcing providers, companies gain access to specialized knowledge and the technical proficiency required to develop and scale these systems, along with an understanding of the associated regulatory pathways.

Opportunity for the Formulation Development Outsourcing Market

Growth in Biologics and Biosimilars Presents Key Opportunities for Formulation Development Outsourcing

The expanding development of biologics and biosimilars presents a significant growth opportunity for the formulation development outsourcing market. Complex therapies such as monoclonal antibodies, vaccines, and gene therapies are highly sensitive and demand advanced formulation strategies to ensure stability, bioavailability, and patient safety. Similarly, biosimilars—designed to replicate the efficacy and safety of biologic reference products—require meticulous formulation to meet stringent regulatory standards and achieve therapeutic equivalence.

Many pharmaceutical companies, particularly small and mid-sized firms, lack the specialized expertise and infrastructure needed to address the unique challenges associated with biologic formulations. These include managing cold chain requirements, preventing protein aggregation, and ensuring long-term stability. As a result, there is a growing reliance on CDMOs with established capabilities in biologic drug development.

With biologics continuing to dominate R&D pipelines—especially in high-growth areas like oncology, immunology, and rare diseases—the pressure to accelerate development timelines while controlling costs is intensifying. Outsourcing partners help meet these demands by offering tailored formulation solutions, rapid prototyping, and scalable processes that support efficient and timely product advancement.

Formulation Development Outsourcing Market Scope

Formulation Development Outsourcing Market Analysis - Report Segmentation

The global Formulation Development Outsourcing Market industry analysis is segmented 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 largest global formulation development outsourcing market share

The pre-formulation service segment is expected to hold a leading position in the global formulation development outsourcing market, primarily due to its critical role in the early stages of drug development. This phase involves a detailed assessment of the physicochemical properties of drug candidates, providing essential data to guide formulation strategy. By understanding a drug’s solubility, stability, and compatibility with various excipients, pharmaceutical companies can enhance the likelihood of success in subsequent development stages.

As drug molecules become more complex and the demand for personalized therapies grows, companies are increasingly turning to specialized outsourcing partners with advanced capabilities for pre-formulation work. Outsourcing these services not only helps reduce development timelines and R&D costs but also ensures adherence to stringent regulatory standards. With pharmaceutical and biotech firms placing greater emphasis on accelerating their drug pipelines, the demand for pre-formulation services is expected to remain strong—further reinforcing this segment's dominant position 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 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 represent the primary end-users in the global formulation development outsourcing market, a position they are expected to maintain while also registering the highest CAGR throughout the forecast period. These organizations increasingly rely on outsourcing to improve development efficiency, access specialized scientific expertise, and lower the costs associated with internal R&D operations.

The growing complexity of drug molecules, combined with the urgent need to accelerate time-to-market, has led to greater collaboration with contract development organizations (CDOs) for advanced formulation services. Furthermore, the globalization of clinical trials and evolving regulatory requirements demand scalable, compliant, and technically robust formulation solutions.

As the pharmaceutical and biotech sectors continue to expand and diversify their drug pipelines—particularly in areas like biologics, rare diseases, and personalized medicine—the reliance on external formulation development partners is expected to remain strong and continue growing steadily.

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 to Maintain Dominance in the Global Formulation Development Outsourcing Market

North America is expected to retain the largest share of the global formulation development outsourcing market, driven by the region’s robust pharmaceutical and biotechnology sectors. High levels of R&D investment, the presence of leading global pharmaceutical companies, and a well-established regulatory framework—led by agencies such as the U.S. FDA—create a favourable environment for market growth.

The region is also home to numerous advanced contract development and manufacturing organizations (CDMOs) with deep expertise and state-of-the-art technologies for developing complex formulations. North America leads in the innovation of drug delivery systems and biologics, both of which require highly specialized formulation capabilities.

As the demand for faster drug development and cost optimization intensifies, companies in the region are increasingly turning to outsourcing to streamline processes. Additionally, the rising prevalence of chronic diseases and the urgent need for novel therapies continue to fuel outsourcing trends. These combined factors firmly position North America as the global leader in the formulation development outsourcing market.

Formulation Development Outsourcing Market Competition Landscape Analysis

The market is competitive, with several established players and new entrants offering a range of formulation development 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 May 2024, AGC Biologics, a global contract development and manufacturing organization (CDMO), entered into a strategic partnership with BioConnection, a contract manufacturing organization (CMO). This collaboration combines AGC Biologics’ expertise in drug substance development with BioConnection’s aseptic filling capabilities, offering a comprehensive end-to-end biopharmaceutical development and manufacturing solution. The alliance aims to meet the growing demand for streamlined services that help biopharma companies accelerate time-to-market for new therapies.
• In August 2022, Catalent Inc. expanded its service portfolio through the $475 million acquisition of Metrics Contract Services, a CDMO specializing in oral solid dose formulation and manufacturing. This acquisition strengthens Catalent’s capabilities in integrated development, manufacturing, and packaging of oral solid dosage forms.
• In February 2024, Danish pharmaceutical leader Novo Nordisk acquired Catalent Inc., a major CDMO, in a landmark $16.5 billion deal. The acquisition is intended to significantly enhance Novo Nordisk’s manufacturing and distribution capabilities, particularly for its GLP-1 product line, including Wegovy and Ozempic. Industry analysts view the move as a potential turning point in pharmaceutical outsourcing, signaling a shift in how drug developers and CDMOs collaborate in the evolving market landscape.

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

●        Other Prominent Players