DeciBio Consulting LLC, a leading market intelligence and strategy consulting firm, announced the publication of its first edition, “Pharma R&D Services Market Report (2024-2029).” This comprehensive report forecasts the global pharma R&D services market to reach approximately $129 billion by 2029, growing at a compound annual growth rate (CAGR) of 5% from an estimated $101 billion in 2024.
DeciBio’s Pharma R&D Services Market Report offers an in-depth analysis of the pharma R&D services landscape. Informed by a combination of primary research from stakeholders across pharma R&D functions, extensive secondary research, and proprietary DeciBio databases and tools, this report provides both a quantitative and qualitative assessment of the key market segments and trends.
The pharma R&D services market represents a critical component of the broader pharmaceutical industry. For example, in 2024, approximately 50% of pharma's $300 billion investment in R&D was allocated to external partners. These external service providers offer specialized expertise, infrastructure, and support to pharma companies across all stages of drug development. These services enable pharmaceutical companies to access novel technologies and capabilities, de-risk investments, accelerate timelines, and manage R&D budgets. Complex activities are particularly essential to outsource. For example, clinical trials and companion diagnostic (CDx) development face significant barriers for pharmaceutical companies to internalize.
This report covers R&D services spanning from drug discovery to clinical development, providing a detailed analysis of these critical segments of the market. A diverse group of companies service these pharmaceutical R&D processes. This report includes findings for general and specialty CROs, laboratory services companies, bioinformatics and Saas companies, and companion diagnostic developers.
Report Details:
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Research Methods:
- Secondary research: analysis of quarterly and annual reports, earnings call transcripts, congress abstracts, and company websites
- Primary research: Interviews with 35 stakeholders across the U.S., Europe, and Rest of World (ROW) from biopharma companies and CROs
- Proprietary databases & analysis: use of internal databases and tools (e.g., Dexter expert network, additional market reports, e.g., Cell Therapy R&D and Manufacturing)
- 2029 Market Size: ~$129 billion
- CAGR (2024-2029): 5%
- Base Year: 2024
- Forecast Period: 2024-2029
- Market / Forecast Currency: USD
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Report Coverage:
- Market size, segmentation, and forecast
- Key market players and trends
- Services and technologies
- Market drivers and moderators
- Competitive analysis
Segments Covered:
- Application: Drug Discovery & Design, Preclinical Services, Clinical Trial Services, Quality Control, CDx/Dx Development, Bioinformatic Technologies
- Pharma Type: Large (revenue exceeding $10B), Medium (revenue $1 - $10B), Small (revenue <$1B)
- Therapeutic Indication: Oncology, Rare Disease, Neurology, Immunology, Cardiology, Metabolic, Other
- Therapeutic Modality: Small Molecule, Protein-Based, Cell Therapy, Gene Therapy, Vaccines, Other
- Provider Type: General CRO, Specialized CRO, Laboratory Services Provider, Bioinformatics Company, CDx/Dx Developer
- Geography: U.S., Europe, Asia Pacific (APAC), Rest of World (ROW)
- Analytical Technology Modality (as a subsegment): Genomics, Proteomics, Epigenomics, Transcriptomics, Cellomics, Imaging, Spectroscopy/Microscopy, Chemical Analysis, Other
Pharmaceutical Service Providers Profiled:
- General CROs: Charles River Laboratories, ICON, IQVIA, Labcorp, PPD (A Thermo Fisher Brand), Syneos Health, WuXi AppTec, Parexel
- Additional Providers (Specialized CROs, Bioinformatic Companies): Crown Bioscience, Evotec, The Jackson Laboratory, BioReliance, Tempus
- CDx/Dx Developers: Foundation Medicine, Guardant Health, Roche Diagnostics
Market Drivers:
The report identifies several key factors that will drive the growth of the pharma R&D services market in the next 5 years. One of the main growth factors is the increasing complexity of therapeutic modalities, such as cell and gene therapies, and the movement to sophisticated antibody-drug conjugates and bi- and multispecific antibodies. Such transitions necessitate specialized expertise, driving reliance on outsourcing. Rapid technological advancements, particularly AI, have the ability to transform drug development and increase the demand for technology-driven partners, as pharmaceutical companies vie to be at the forefront of medical innovation. Furthermore, pharmaceutical companies are pushing for an accelerated time-to-market, driven by the intense competitive landscape and the high cost of drug development failure. Pharmaceutical companies continue to outsource to build flexible and scalable R&D models, offering significant cost efficiencies. The degree of outsourcing may vary based on where pharmaceutical companies are in development, but clinical trials will certainly continue to drive outsourcing as site management needs increase and fast growing regions, such as China, require trial localization.
Market Moderators:
The report also discusses how the pharma R&D services market faces several moderating factors. Major patent expirations drive cost cutting initiatives across pharmaceutical companies, who must mitigate the reduction in profits from patent losses, putting pressure on overall budgets and outsourcing. Furthermore, ongoing geopolitical tensions are disrupting global CRO dynamics and creating economic uncertainty. U.S.-specific policies such as the Inflation Reduction Act and Most-Favored-Nation Prescription Drug Pricing weigh on drug prices. Meanwhile, the BIOSECURE Act impacts the relationships and reach of U.S. pharma with Chinese CROs. These pressures impact overall investment and program planning. Additionally, evolving regulatory requirements may reduce preclinical spending. For example, the FDA Modernization Act, which promotes New Approach Methods (NAMs), may lead to reduced preclinical spending as NAMs partially replace more expensive animal models. Finally, the growth of the functional service provider (FSP) model enables pharma to be more selective in which services to outsource vs. keep in-house. Decreasing dependence on full-service outsourcing, as well as the use of FSPs as more affordable hybrid options, could both reduce overall pharma outsourcing expenditure.
Overall, the growth drivers are expected to outweigh the moderators during the 5-year forecast window. Andrew Aijian, Senior Partner at DeciBio Consulting, says, "The pharma R&D services market has weathered recent headwinds, from biopharma funding constraints to pipeline reprioritizations. While some challenges may persist in the near term, we’re seeing early signs of recovery, particularly in high-growth areas like precision medicine, AI-enabled drug discovery, and decentralized trials. Leveraging advances in bioanalytical technologies, bioinformatics, data, AI, and novel disease models, service providers will help drive the next wave of innovation in pharma pipelines and trials. Our inaugural report provides critical insights into these dynamics, offering a roadmap for stakeholders navigating this evolving landscape. The increasing complexity of drug development, coupled with the rapid pace of technological advancements, underscores the growing importance of external service providers across the entire R&D continuum."
For more information on DeciBio’s Pharma R&D Services Market Report (2024-2029) please contact glazier@decibio.com.
About DeciBio:
DeciBio Consulting (www.decibio.com) is a leading strategy consulting, market intelligence, and SaaS firm dedicated to accelerating the adoption and impact of technologies enabling precision medicine.
Headquartered in Los Angeles, California, with additional offices in San Francisco, New York City, and London, DeciBio serves a global base of clients and customers, ranging from startups to Fortune 500 healthcare corporations. DeciBio offers advisory services for growth planning, market and opportunity assessment, product and portfolio strategy, voice-of-customer feedback, technology assessment, and commercial due diligence.
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Contacts
Hannah Glazier
glazier@decibio.com