North America Topical Drugs CDMO Market (By Product Type: Semi-Solid, Liquid; By Service Type: Contract Development, Contract Manufacturing; By Sponsors; By Country) - Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2024-2033

The global North America topical drugs CDMO market was estimated at USD 13.08 billion in 2023 and it is expected to surpass around USD 36.21 billion by 2033, poised to grow at a CAGR of 10.72% from 2024 to 2033. The topical medication CDMO market in North America is being driven by increased healthcare outsourcing, better patient care, R&D spending because of the rising prevalence of various skin diseases, and the expiration of current patents.

Key Pointers

• By Product Type, the semi-solid formulations segment held the largest revenue share of 67% in 2023.
• By Service Type, the contract manufacturing segment emerged as the dominant force in the market in 2023.
• By Sponsors, the pharmaceutical companies generated the maximum market share in 2023.
• By Sponsors, the biopharmaceutical companies are poised to register the fastest CAGR during the forecast period.

North America Topical Drugs CDMO Market Overview

The North America topical drugs contract development and manufacturing organization (CDMO) market has witnessed significant growth in recent years. This growth can be attributed to the rising demand for specialized topical drug formulations, advancements in drug delivery technologies, and the increasing prevalence of dermatological disorders. This overview aims to delve into the key aspects and trends shaping the landscape of the North America Topical Drugs CDMO market.

North America Topical Drugs CDMO Market Growth

The growth of the North America topical drugs contract development and manufacturing organization (CDMO) market can be attributed to various key factors. Firstly, the increasing incidence of dermatological disorders, such as psoriasis and eczema, has fueled the demand for specialized topical drug formulations. Additionally, advancements in drug delivery technologies have played a crucial role in enhancing the precision and efficacy of topical applications. The industry is witnessing a growing emphasis on customized formulations, with pharmaceutical companies seeking CDMOs that can provide tailored solutions to meet specific requirements. This trend, coupled with the market's response to the demand for personalized topical drugs, is driving collaborations between drug developers and CDMOs. Overall, these factors, along with the commitment of key players to maintaining regulatory compliance and ensuring high-quality services, contribute to the positive growth trajectory of the North America Topical Drugs CDMO market.

North America Topical Drugs CDMO Market Trends:

• Increasing Demand for Specialized Formulations: The market is witnessing a surge in demand for specialized topical drug formulations to address specific dermatological needs, driven by the rising prevalence of skin disorders like psoriasis and eczema.
• Advancements in Drug Delivery Technologies: Ongoing advancements in drug delivery technologies are influencing the development of more precise and targeted topical drug applications, enhancing the overall efficacy and patient experience.
• Focus on Customization and Personalization: Pharmaceutical companies are placing a growing emphasis on customized formulations, leading to collaborations with CDMOs that can offer tailored solutions to meet unique drug development requirements.
• Rising Importance of Regulatory Compliance: The stringent regulatory landscape is a key trend, with CDMOs prioritizing compliance with quality standards. This emphasis on regulatory adherence serves as a crucial factor influencing partnerships and collaborations in the market.
• Growing Market Presence of Key CDMOs: Prominent CDMOs in the market are expanding their presence through investments in research and development, allowing them to offer a broader range of services and maintain a competitive edge.
• Digitalization and Technological Integration: The integration of digital technologies in research, development, and manufacturing processes is becoming more prevalent. This trend aims to enhance efficiency, reduce time-to-market, and ensure real-time collaboration between stakeholders.
• Diversification of Service Offerings: CDMOs are diversifying their service portfolios to meet the evolving needs of the pharmaceutical industry, encompassing a broader range of topical drug development and manufacturing capabilities.

Product Type Insights

The market was predominantly led by the semi-solid formulations segment, capturing a substantial revenue share of 67% in 2023. The growth of this segment can be attributed to the escalating interest in semi-solid dosage forms, an upsurge in research and development (R&D) endeavors, and an expanding pipeline of semi-solid topical drugs. Semi-solid dosage forms, including creams, ointments, and lotions, typically incorporate active ingredients dissolved or uniformly dispersed in a suitable base along with excipients. The appeal of semi-solid formulations lies in their user-friendly nature, rapid preparation, and effective local delivery capabilities.

CDMOs play a pivotal role in augmenting product pipelines for various biopharmaceutical and pharmaceutical companies. Consequently, there has been a notable uptick in strategic collaborations and expansion initiatives among industry players, particularly in the realm of developing semi-solid formulations for diverse disease indications. This trend is anticipated to propel the growth of the semi-solid formulations segment throughout the forecast period. For instance, in June 2023, Swiss-American CDMO, a global company specializing in topical solutions and skincare products, joined forces with BioNTX to announce the establishment of the Biotechnology and Healthcare Industry Alliance of North Texas (BHIANT)

Service Type Insights

In 2023, the contract manufacturing segment emerged as the dominant force in the market. This prominence can be ascribed to the notable influx of Contract Development and Manufacturing Organizations (CDMOs) entering the topical drugs CDMO industry. A key driver for the segment's growth is the increasing trend among pharmaceutical companies to outsource the manufacturing of topical formulations to CDMOs. This outsourcing strategy is favored due to its cost-effectiveness and the reduced need for significant capital investment, thereby contributing significantly to the segment's expansion.

Furthermore, the robust presence of small and mid-sized market players, equipped with advanced manufacturing capabilities within the region, plays a pivotal role. This presence not only facilitates the introduction of high-quality end products but also ensures the efficacy and safety of pharmaceutical products, thereby enhancing market prospects. Additionally, the growing adoption of generic drugs and the trend of Rx-to-OTC switches are positively influencing the outsourcing of topical drug manufacturing. This strategic move aims to cater to a large customer base with an affordable price range, further supporting the growth trajectory of the contract manufacturing segment.

Sponsors Insights

In 2023, pharmaceutical companies emerged as the leading contributors to market revenue, holding the largest share. The upward trajectory of market demand is fueled by the escalating research and development (R&D) investments made by pharmaceutical companies in the development and commercialization of topical drugs. The substantial presence of small and middle-scale pharmaceutical firms, constrained by limited infrastructure and capital investment, is a key driver propelling overall market demand. Additionally, the surge in investments and product innovations in topical drugs by numerous pharmaceutical companies further reinforces their dominance in the market. This is augmented by a prevalent trend among pharmaceutical companies to outsource topical drug manufacturing, a strategic move aimed at optimizing their facilities.

Moreover, the heightened demand for outsourced services is accentuated by a noteworthy increase in regulatory approvals for various topical products by pharmaceutical companies. For example, in July 2022, Incyte received approval from the U.S. Food and Drug Administration (FDA) for the topical cream Opzelura, used in the treatment of vitiligo. Consequently, the continuous outsourcing of topical drugs and the innovation of products within pharmaceutical companies have catalyzed increased product sales, thereby steering market growth.

Concurrently, biopharmaceutical companies are poised to register the fastest CAGR during the forecast period. This acceleration is primarily attributed to the outsourcing of end-to-end services, especially by small, mid-sized, and established biopharmaceutical companies lacking expertise in topical drug development. The growing trend of biopharmaceutical companies investing in the development and production of topical drugs for various skin conditions further propels the growth of this segment.

Country Insights

In 2023, the United States asserted its dominance in the market, commanding an impressive 89% of the total revenue share. This significant market share can be attributed to the country's status as a premier manufacturing hub for highly reliable, complex, and high-end pharmaceuticals. The U.S. market is further buoyed by the focus of biopharmaceutical companies on this region, drawn by the flourishing healthcare industry that underpins the substantial market revenue. The adoption of increased outsourcing practices by companies specializing in topical drugs, coupled with the support of Contract Development and Manufacturing Organizations (CDMOs) in mitigating operational and capital expenses, stands out as pivotal in propelling market growth. The U.S. also boasts robust research and development (R&D) practices, actively promoting the introduction of new therapeutics, thereby contributing significantly to its substantial market share. Additionally, the imperative to uphold high client satisfaction levels amid intense competition is anticipated to further drive market expansion within the United States.

On the other hand, Canada is poised for a stable growth rate throughout the forecast period. The pharmaceutical and biopharmaceutical sector in Canada is experiencing advancements attributed to increased investments, partnerships, and strategic initiatives undertaken by CDMOs. These initiatives specifically focus on research in the field of skin diseases, addressing a spectrum of skin-related and dermatological conditions. Moreover, research on topical and transdermal drug delivery systems holds significant importance within the Canadian pharmaceutical landscape.

North America Topical Drugs CDMO Market Key Companies

• The Lubrizol Corporation
• Cambrex Corporation
• Contract Pharmaceuticals Limited
• Bora Pharmaceutical CDMO
• Ascendia Pharmaceuticals
• Pierre Fabre S.A.
• Piramal Pharma Solutions
• DPT Laboratories, LTD.
• MedPharm Ltd.
• Zenvisionpharma

North America Topical Drugs CDMO Market Segmentations:

By Product Type

• Semi-solid Formulations
  • Creams
  • Ointments
  • Lotions
  • Others
• Liquid Formulations
  • Suspensions
  • Solutions
• Solid Formulations
• Transdermal Products

By Service Type

• Contract Development
  • Formulation Development
  • Analytical Testing
  • Stability Testing
  • Others
• Contract Manufacturing
  • Clinical
  • Commercial

By Sponsors

• Pharmaceutical Companies
• Biopharmaceutical Companies
• Others

By Country

• U.S.
• Canada