Is North America's Hold on the Biologics CDMO Market at Risk?

The global biologics market is expected to reach USD 720 bn by 2030, fueled by increasing demand for biologics, biosimilars, and advanced therapies. It is undoubtedly an area of keen interest for CDMOs that specialize in biopharmaceutics.

Historically, North America has dominated this market, primarily because of its robust infrastructure, strong regulatory frameworks, and the presence of industry-leading pharmaceutical companies. Yet, as global competition intensifies from Asia-Pacific and Europe, could the dynamics of the biologics CDMO market be shifting?

North America Leads the Biologics CDMO Market

In 2024, North America contributed to 36% of the global biologics CDMO market, and revenues are projected to grow from USD 7.9 bn (2024) to USD 23.6 bn by 2034.

Chief among the drivers is the presence in the U.S. of major pharmaceutical and biotechnology companies including Pfizer, Amgen, Johnson & Johnson, and AbbVie, all of which have extensive R&D pipelines that rely heavily on outsourcing complex manufacturing processes to specialist CDMOs. Unsurprisingly, many leading CDMOs have already established advanced facilities in North America to meet the growing demand for biologics production.

Another critical factor for North American dominance is the nation’s regulatory clarity. The U.S. FDA has established clear guidelines for biologics development and approval, creating an environment that fosters innovation and investment, with reimbursement policies that encourage the adoption of biologic therapies for chronic diseases such as cancer, autoimmune disorders, and genetic conditions. Technological leadership further solidifies North America's position in the market, with the region at the forefront of bioprocessing innovations such as single-use systems, continuous manufacturing, and AI-driven process optimization.

However, North America's dominant position is challenged by high operational costs, which remain a significant barrier compared to more cost-effective regions such as Asia-Pacific, and workforce shortages in specialized manufacturing roles have created bottlenecks in scaling production capacity.

Does this provide enough opportunity for other regions to target North American dominance?

Asia-Pacific: A Rising Force in the East

Many significant CDMOs already operate in the Asia-Pacific region, including WuXi Biologics (China), Samsung Biologics (South Korea), Lonza (Singapore) and Dr. Reddy’s (India). These CDMOs have successfully attracted global pharmaceutical companies seeking cost-effective manufacturing solutions, especially for supply to the region.

The region's cost advantages are one of its most significant strengths; lower labor costs and reduced operational expenses make it an attractive outsourcing destination; whilst governments in the region are also investing heavily in biopharma infrastructure and workforce training programs to build local expertise. Foreign direct investments (FDIs) from multinational corporations are further boosting Asia-Pacific's capabilities, with more companies establishing R&D centers and manufacturing hubs in countries like China and India to tap into growing talent pools and infrastructure.

Whilst promising, Asia-Pacific faces challenges that could limit its growth potential. Regulatory inconsistencies across countries create hurdles for global pharmaceutical companies seeking streamlined approval processes, whilst the perception that quality standards in some parts of Asia-Pacific may not yet match those of North America or Europe will take time to overcome.

Europe: Innovation Meets Challenges

Europe already holds a moderate share of the biologics CDMO market due to strong funding for R&D activities from local governments, particularly focusing on specialized capabilities in niche areas such as ADCs and radioligands. With European CDMOs being known for their focus on high-quality manufacturing processes and stringent regulatory requirements, they remain attractive partners for pharmaceutical companies developing complex biologic therapies.

European labor costs, however, differ little from those of their North American counterparts, cost-conscious biopharma's are likely to favor Asia-Pacific. Additionally, slower regulatory approval processes relative to North America can delay time-to-market for new therapies, which may hinder any competitive challenge from European CDMOs.

The Trends that will Shape the Future of the Biologics CDMO Market

The biologics sector is already growing rapidly, yet there are several trends that could reshape the related CDMO landscape in the coming decade.

Biopharma outsourcing is expected to expand further, and North America will likely remain the preferred partner due to its high-quality standards and advanced technology. It is already investing heavily in viral vector production and other complex bioprocesses. However, Asia-Pacific will continue to attract contracts by offering significant cost advantages and will be increasingly attractive if specialized manufacturing capabilities can match those of their North American and European counterparts.

Digital transformation will be pivotal in modernizing biologics manufacturing. Technological advances will optimize production, predictive analytics will improve supply chain management, and automation will address workforce shortages while enabling scalable operations. Whilst North America has been the driving force of AI, China’s unexpected release of DeepSeek shows that innovation can happen quickly and unexpectedly.

In more recent years, geopolitical shifts have had have profound impact on supply chains. For instance, U.S.-China tensions may push Western pharmaceutical companies to diversify by partnering with Indian or Southeast Asian CDMOs rather than relying heavily on Chinese manufacturers. A demand for localization also suggests that biopharma companies may choose outsourcing facilities based on their locality to customer markets - relying less on a single global manufacturing facility, and opting for multiple, distributed facilities.

Finally, industry consolidation is likely as larger CDMOs pursue mergers and acquisitions to expand their geographic reach and therapeutic capabilities. Cash-rich CDMOs may see benefit by acquiring the additional facilities and industry skillsets of smaller, more agile CDMOs across international markets.

Embracing Global Competition in the Biologics CDMO Market

While North America has long been the leader in the biologics CDMO market, the rise of global competition from Asia-Pacific and Europe should be viewed as a positive shift for biopharma companies. More options and competitions leads to a landscape that fosters innovation, drives efficiency, and provides companies with a broader range of options to meet their unique needs.

Global competition also highlights the importance of differentiation. Each region brings its own strengths to the table. Biopharma companies stand to gain by selecting partners that align with their specific goals, whether that is cutting costs, accessing niche expertise, or leveraging cutting-edge technologies. Rather than viewing competition as a threat, North America and other regions should see it as an opportunity to refine their offerings and strengthen their positions in the global market.