Topical Drugs CDMO Market – By Product Type, By Therapeutic Area, By Service Type, By End Use – Global Forecast, 2024 – 2032

Topical Drugs CDMO Market Size

The global topical drugs CDMO market was valued at USD 43.7 billion in 2023 and is estimated to grow at a CAGR of over 10.5% from 2024 to 2032. The growth of the market is primarily driven by an increasing focus on non-invasive drug delivery systems.
 

The topical formulations such as creams, gels, ointments, and transdermal patches are gaining popularity as patients and healthcare providers seek safer and more convenient alternatives to oral and injectable medications. Furthermore, pharmaceutical companies are increasingly outsourcing the development and production of these specialized topical drugs to CDMOs that possess expertise, advanced manufacturing capabilities, and regulatory knowledge to meet these complex demands.
 

CDMOs are investing in facilities and expanding their services to include formulation development, clinical trial support, and commercial production for personalized topical treatments. For instance, in September 2024, Blue Wolf Capital Partners LLC expanded its pharmaceutical presence by acquiring seven European manufacturing facilities from Recipharm in Sweden, France, and Spain, which specialize in oral solid, semi-solid, and liquid dosage forms. Additionally, Blue Wolf agreed to acquire Synerlab, a French CDMO with six facilities. These acquisitions have enhanced Blue Wolf's CDMO capabilities, regulatory expertise, and geographical reach, positioning them as a key player in the European pharmaceutical market. Thus, the aforementioned trends collectively contribute to fostering market growth in the coming years.
 

Topical drugs CDMO refers to service providers that offer specialized outsourcing services for the development and manufacturing of topical drug products. Topical drugs are medications designed to be applied directly to the skin or mucous membranes for localized or systemic effects. CDMOs in this area provide various services to pharmaceutical, biotechnology, and specialty pharma companies, assisting them in bringing topical drug products from the research and development stage to commercialization.      
 

Topical Drugs CDMO Market Trends

Technological advancements in formulation technology and transdermal drug delivery systems are propelling this trend forward. Innovative technologies, including nanoparticle-based topical treatments, liposomes, and microencapsulation, are enhancing the bioavailability and therapeutic efficacy of topical drugs. This enhancement makes them more attractive for treating a broader range of conditions, from chronic skin issues like eczema and psoriasis treatment to pain management and hormonal therapies.
 

Moreover, the growth of the topical drugs contract development and manufacturing organization (CDMO) market is primarily driven by the increasing demand for dermatological treatments, which is fuelled by a rising prevalence of skin conditions. The global CDMO market for topical drugs is expanding as pharmaceutical companies seek specialized partners to meet the high standards required for formulation, regulatory compliance, and scale-up.
 

Topical Drugs CDMO Market Analysis

Based on product type, the market is segmented into semi-solid formulations, liquid formulations, transdermal products, and solid formulations. The semi-solid segment accounted for USD 27.3 billion in 2023. The semi-solid formulations segment is further sub-segmented into creams, ointments, gels, and other semi-solid formulations.
 

• Semi-solid formulations have gained prominence due to their widespread use in treating various skin conditions. These formulations effectively deliver active pharmaceutical ingredients (APIs) directly to affected areas, providing targeted treatment with minimal systemic absorption, making them ideal for dermatological applications.
   
• The versatility and ease of application of semi-solid formulations have made them the preferred choice for both prescription and over the counter drugs. They are commonly used to treat conditions such as acne, eczema, psoriasis, and fungal infections, which are highly prevalent globally.
   
• This has led to an increasing demand for semi-solid topical treatments, prompting pharmaceutical companies to expand their product portfolios in this segment.
   

Based on therapeutic areas, the topical drugs CDMO market is classified into dermatology, pain management, wound care, ophthalmology, and other therapeutic areas. The dermatology segment dominated the market with 34.5% of market share in 2023.
 

• The dermatology segment's prominence was due to the high prevalence of skin disorders and the rising demand for effective topical treatments.
   
• Conditions such as acne, psoriasis, eczema, and skin infections affect millions globally, driving pharmaceutical companies to develop innovative topical formulations to address these issues. Topical medications are often the first line of treatment in dermatology, as they allow for localized application, delivering active ingredients directly to affected areas with minimal systemic absorption.
   
• Furthermore, as pharmaceutical companies expand their dermatology pipelines, many are turning to CDMOs for specialized expertise in developing and manufacturing topical formulations, such as creams, gels, ointments, and lotions.
   

Based on service type, the topical drugs CDMO market is categorized into contract manufacturing and contract development. The contract manufacturing segment held the highest market share and is expected to grow at a 10.2% CAGR over the analysis period.
 

• Contract manufacturing has emerged as the dominant segment due to its ability to offer cost-effective, scalable, and efficient production solutions for pharmaceutical companies.
   
• Furthermore, the rise in demand for topical drugs, driven by the increasing prevalence of skin conditions such as acne, psoriasis, and dermatitis, has further fueled the need for contract manufacturing services.
   
• CDMOs offer specialized expertise in producing semi-solid and liquid formulations, which are the most common forms of topical medications. Their capability to ensure regulatory compliance, high-quality standards, and flexibility in production makes them an essential partner in the supply chain.
   

Based on end use, the topical drugs CDMO market is divided into pharmaceutical companies, biotechnology companies, and other end-users. The pharmaceutical companies' segment is projected to reach USD 67.1 billion by 2032.
 

• Pharmaceutical companies' dominance was attributed to their increasing reliance on outsourcing for drug development and manufacturing.
   
• As the demand for topical treatments grows, driven by the rising incidence of dermatological conditions, pharmaceutical companies are expanding their topical drug pipelines.
   
• This has led to greater collaboration with CDMOs, which provide the necessary expertise and infrastructure for efficient production, ensuring companies can meet market demands while maintaining quality standards.
   
• Outsourcing to CDMOs enables pharmaceutical companies to reduce costs and mitigate the risks associated with in-house manufacturing, such as regulatory compliance, production scalability, and technological advancements. By partnering with CDMOs, they can focus on their core competencies, such as research and marketing, while leveraging the manufacturing capabilities of specialized organizations.
   

U.S. topical drugs CDMO market is expected to grow at 10.1% CAGR, to reach USD 35 billion by 2032.
 

• The presence of leading CDMOs in the U.S. enhances the country's ability to produce high-quality topical products. These CDMOs frequently collaborate with pharmaceutical companies to streamline the development process, ensuring efficient time-to-market for new formulations.
   
• For example, in January 2023, Swiss American CDMO partnered with LiquiGlide, the developers of the EveryDrop dispensing platform. This collaboration expanded Swiss American's offerings by incorporating LiquiGlide's innovative technology into the global skincare market.
   
• This partnership is expected to significantly boost the market in the U.S. by enhancing product efficiency and reducing waste, catering to the growing demand for sustainable and effective skincare solutions.
   
• Furthermore, with growing healthcare awareness, patients are increasingly seeking non-invasive treatments to manage their conditions. This shift has spurred demand for topical medications, which offer effective relief without the complications associated with oral drugs.
   
• Consequently, this trend is fueling growth in the U.S. market, as manufacturers expand their development and manufacturing capabilities to meet the increasing demand.
   

The Germany topical drugs CDMO market is experiencing robust growth in the Europe market.
 

• Germany's stringent regulatory standards push manufacturers to work with CDMOs that can ensure high-quality production while meeting compliance requirements for Good Manufacturing Practices (GMP), making local CDMOs preferred partners.
   
• Furthermore, Germany is a leading pharmaceutical market in Europe with high export potential. CDMOs in Germany benefit from partnerships with large pharmaceutical companies looking to outsource production, especially for topical products aimed at both domestic and international markets, thereby contributing to the growth of the market.
   
• Additionally, there is a rising demand for customized topical treatments for niche markets, such as dermatology and cosmetics, where patients seek tailored formulations. This trend has pushed CDMOs to offer flexible, small batch manufacturing capabilities, adding to market growth.
   

The Asia Pacific topical drugs CDMO market is witnessing substantial growth of 10.8% during the analysis period.
 

• Chinese consumers show high demand for beauty and skin-care products, particularly in urban areas. The increased focus on aesthetic dermatology propels the need for innovative topical formulations that CDMOs can produce.
   
• Moreover, international pharmaceutical companies are increasingly partnering with Chinese CDMOs due to the large local market potential and quality manufacturing capabilities, which supports CDMO expansion, contributing to the market growth.
   

Brazil topical drugs CDMO market is experiencing robust growth in the Latin America market.
 

• Brazil has a high incidence of dermatological conditions like acne, psoriasis, and fungal infections due to its tropical climate and high humidity. The demand for topical drugs is increasing as the population seeks effective treatment options for these conditions; therefore, these factors are expected to drive the growth of the market.
   
• Additionally, the Brazilian government has implemented policies to encourage the growth of the pharmaceutical sector, including tax incentives, regulatory support, and investment incentives for manufacturing facilities, including CDMOs.
   

Saudi Arabia topical drugs CDMO market is witnessing substantial growth during the analysis period.
 

• Saudi Arabia is investing significantly in the pharmaceutical sector as part of its National Industrial Development and Logistics Program (NIDLP). This program emphasizes local production, creating opportunities for CDMOs to partner with global companies and establish local manufacturing facilities for topical drug formulations.
   
• Moreover, the Saudi Food and Drug Authority (SFDA) has streamlined regulations to promote local manufacturing with a focus on expedited approval processes and incentives for locally manufactured products. Therefore, the CDMOs specializing in topical drugs benefit from smoother regulatory pathways, encouraging faster production and market entry, which further propels the market growth.
   

Topical Drugs CDMO Market Share

The market is marked by a highly competitive landscape, characterized by rapid innovation and technological progress. Prominent pharmaceutical and biotechnology companies hold a significant share of the market, driven by their extensive portfolios of topical drugs and advanced treatment options for skin diseases. Strategic initiatives, such as mergers, acquisitions, and collaborations, further strengthen the market position of key players, allowing them to expand their product and services offerings and access new markets.
 

Topical Drugs CDMO Market Companies

Prominent players operating in the topical drugs CDMO industry include:

• Ascendia Pharmaceuticals
• Bora Pharmaceuticals
• Cambrex
• Contract Pharmaceuticals
• DPT Laboratories
• MedPharm
• PCI Pharma Services
• Pierre Fabre Group
• Piramal Pharma Solutions
• The Lubrizol
   

Topical Drugs CDMO Industry News:

• In June 2024, Aterian Investment Partners acquired Contract Pharmaceuticals Limited (CPL), a North American CDMO specializing in non-sterile liquid and semi-solid dosage forms. This acquisition strengthens the company’s presence in the market, enhancing its capabilities in developing and manufacturing topical medications across the pharmaceutical industry.
   
• In February 2024, Bora Pharmaceuticals acquired U.S. pharma manufacturer Upsher-Smith, strengthening its position as a leading Contract Development and Manufacturing Organization (CDMO). The acquisition supported Bora's global presence and expanded its manufacturing capabilities.
   

The topical drugs CDMO market research report includes an in-depth coverage of the industry with estimates & forecast in terms of revenue in USD Million from 2021 - 2032 for the following segments:

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Market, By Product Type

• Semi-solid formulations
  • Creams
  • Ointments
  • Gels
  • Other semi-solid formulations
• Liquid formulations
• Transdermal products
• Solid formulations

Market, By Therapeutic Area

• Dermatology
• Pain management
• Wound care
• Ophthalmology
• Other therapeutic areas

Market, By Service Type

• Contract manufacturing
• Contract development

Market, By End Use

• Pharmaceutical companies
• Biotechnology companies
• Other end users

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Spain
  • Italy
  • Netherlands
• Asia Pacific
  • China
  • Japan
  • India
  • Australia
  • South Korea
• Latin America
  • Brazil
  • Mexico
• Middle East and Africa
  • South Africa
  • Saudi Arabia
  • UAE