Pharmaceutical outsourcing continues to grow, but not all manufacturing capacity is becoming equally valuable.
Recent CDMO investment is moving towards specialist capabilities, manufacturing in key markets and capacity that can support products as they approach commercial scale. Major drugmakers are also committing billions to their own production networks, changing what they need from external partners.
Visiongain forecasts the global pharmaceutical contract manufacturing market to grow from US$171.00bn in 2026 to US$367.06bn by 2036, at a CAGR of 7.9%.
This week, we examine where CDMO investment is moving, how Big Pharma’s manufacturing expansion is changing outsourcing decisions, and which parts of the market are likely to benefit.
Capacity is not interchangeable across modalities. A large facility has limited value to a customer if it cannot support the required process, suitable slots are unavailable or transferring production would delay the programme.
The gap becomes more important as products approach launch. Specialist equipment, regulatory qualification and technology transfer can take time, while commercial demand may rise much faster. Headline capacity figures therefore reveal relatively little about how quickly a CDMO can take on a specific programme.
New plants and acquired sites also need the right customer programmes to reach attractive utilisation.
Visiongain Insight: Installed capacity is not the same as qualified, available capacity. For sponsors, the difference can affect development and launch timelines; for CDMOs and investors, it can mean years between adding an asset and generating an attractive return.
Manufacturing location is becoming a more important factor in supplier selection. Samsung Biologics’ move into the US shows how leading CDMOs are responding.
The company completed its acquisition of GSK’s Rockville, Maryland facility in March, adding 60,000 litres and giving it its first US manufacturing base within a network previously centred in South Korea.
Thermo Fisher is already seeing the shift in customer demand. Its pharmaceutical services business has won contracts to help customers move production from Europe and Asia to the US, with chief executive Marc Casper expecting reshoring to support growth into 2027 and 2028.
The broader shift goes beyond reshoring. Drugmakers are also looking for qualified production across multiple regions, creating alternative supply routes when trade policy or supply conditions change. Hovione, for example, has reported growing demand for dual sourcing across its US and European operations.
Geopolitical risk remains part of that calculation, although the picture can change quickly. WuXi AppTec was added to the US government’s Section 1260H list in June, before a federal judge temporarily blocked enforcement of the designation on 7 August following a legal challenge by the company.
Long development timelines make supplier decisions difficult to reverse. Moving an established process can involve technology transfer, validation and regulatory changes, increasing the value of having a second qualified production route before disruption occurs.
Lonza is directing further investment towards ADC manufacturing, with new commercial-scale payload-linker capacity planned for Visp and another ADC filling line in Stein. The investments cover processes that require specialist infrastructure and experience and cannot be expanded quickly.
Samsung Biologics is making a larger move into peptides. Its proposed acquisition of PolyPeptide would extend the company beyond mammalian biologics and add six manufacturing sites across Europe, the US and India, as demand for peptide manufacturing grows, driven in part by GLP-1 and other metabolic medicines.
Buying an established specialist can add technical expertise, qualified facilities and customer relationships far faster than building them from scratch. In Samsung’s case, the proposed deal would provide an established peptide platform rather than requiring the company to develop that capability organically.
Big Pharma’s manufacturing push does not necessarily translate into less external production. Lilly offers a useful example: despite committing more than US$50bn to US capital expansion since 2020, the company is also expanding its manufacturing partnership with Resilience. In July, the two announced a combined US$750m investment in Ohio, including production of Lilly’s KwikPen injectable device.
The effect may instead be felt in which work companies choose to outsource. In May, Lonza said large US pharma investments could delay some outsourcing decisions, while reporting sustained demand from both large pharma and biotech. It sees the current investment wave primarily as a geographic shift in capital spending rather than a fundamental change in sourcing strategy.
The pressure is likely to fall most heavily on undifferentiated capacity, where sponsors have fewer reasons to use an external supplier rather than their own network. Specialist processes, rapid access to qualified production and manufacturing in another region offer clearer advantages. Biotech companies remain more dependent on external partners, with Lonza noting their limited focus on building in-house capacity.
Visiongain Insight: Big Pharma’s factory build-out is more likely to change the type of work outsourced than remove external manufacturing altogether. Capacity that offers little advantage over an internal plant faces greater pressure, while specialist capability, faster access and regional flexibility give sponsors clearer reasons to continue using external partners.
Growth in contract manufacturing will not lift every part of the market equally. Investment is likely to become more selective as CDMOs weigh new capacity against customer demand, utilisation and the time required to qualify specialist facilities.
Scarcity alone will not guarantee attractive returns. Specialist assets still need sufficient demand and utilisation to justify the investment, while new capacity in less differentiated areas faces greater competition from both other CDMOs and customers’ own manufacturing networks.
M&A is likely to remain part of the response, particularly where acquiring an established platform can provide technical expertise, qualified infrastructure or access to a market faster than organic expansion.
Visiongain Insight: The gap is likely to widen between CDMOs adding capacity backed by clear customer demand and those expanding on the assumption that overall market growth will fill new facilities. Specialist capability, geography and scale will only create value where they translate into utilisation and reliable commercial supply.
Contract manufacturing is becoming more specialised, more geographically distributed and more closely tied to decisions around capacity, supply security and outsourcing.
Visiongain’s Contract Manufacturing & CDMOs Hub brings together briefings, analysis and market insight on the forces shaping the sector, from biologics and advanced therapies to contract manufacturing, capacity investment, supply chains and CDMO strategy.
Explore the Contract Manufacturing & CDMOs Hub for strategic updates and related market reports.
Related reports include:
For commentary, data requests or interview enquiries, please contact: press@visiongain.com
