Revenues for the global pharmaceutical contract manufacturing sector will reach $64.07 billion in 2016 and more than double between now and 2021, according to new forecasts.

Manufacturing of finished dosage forms will drive revenue growth over the forecast period, and the market is expected to show a compound annual growth rate (CAGR) of 8.7% between 2010 and 2016, according to the report, from London-based business information company Visiongain.

The production of active pharmaceutical ingredients (APIs) remained the largest sector for the contract manufacturing industry worldwide last year, accounting for 71% of the total market, says the report.  It forecasts that API manufacturers in India and China will achieve increasing demand for their services, and also that demand for generic and highly potent APIs will be the main drivers of growth in this market over the next 10 years.

"The global pharmaceutical contract manufacturing industry will benefit from a continued move to strategic outsourcing by the pharmaceutical industry," comments Richard Lang, pharmaceutical industry analyst at Visiongain.

"That industry will look more to long-term relationships with a few selected contract manufacturing organisations (CMOs) as the decade goes on. Becoming a full-service CMO or specialising in a niche area will best allow contract manufacturers to take advantage of these strategic partnerships," Mr Lang advises.

The US accounted for 42% of total demand for contract manufacturing services last year, says the report, which sees demand continuing to come from developed market-based pharmaceutical companies over the next 10 years.

Drugmakers will outsource increasing amounts of manufacturing during the decade as they focus on activities such as R&D and marketing, while growth in the biotechnology industry also presents a significant  new opportunity for CROs, it notes.

Visiongain forecasts that the overall pharmaceutical contract manufacturing market will grow steadily to 2010. There are opportunities for CMOs to expand, for example through buying out facilities from drugmakers or acquiring smaller CMOs to become a "one-stop shop" for outsourced development and manufacturing. Companies which offer specialised manufacturing services will also benefit throughout the decade, it adds.

- Another new report notes that while the US is currently the world's biggest market for APIs, followed by Europe and Asia-Pacific, the latter region is the fastest-growing. Revenue growth in the Asia-Pacific API market is likely to increase at a rate of 9.6% per annum during 2010-2016, compared to an annual average growth rate of 6.7% during 2005-2010, says the study, from Companies and Markets.

However, it also notes that while manufacturing of APIs is moving from established western markets to more emerging regions, particularly India and China, the fluctuating prices of raw materials in these countries is a cause for concern for many API producers. When material costs are high, profit margins are eroded, a factor which could influence growth in the Asia-pacific API market, it says.