Drug Discovery Market Highlights

The Drug Discovery Market was estimated at USD 61.2 billion in 2023 and is expected to grow at a CAGR of 9.34% during 2023-2033 to reach USD 149.5 billion in 2033.

Drug discovery is a method of identifying novel candidate medications in the domains of pharmacology, biotechnology, and medicine. Historically, medications were found by chance, as with penicillin, or by discovering the active component in traditional treatments. Classical pharmacology is a strategy that involves screening chemical libraries of manufactured small compounds, natural products, or extracts in whole cells or organisms to uncover chemicals with desirable therapeutic effects.

Drug Discovery Market CAGR

2023-2033

CAGR OF

9.34%

Drug Discovery Market

The pharmaceutical and biopharmaceutical sectors have seen a significant increase in R&D efforts. The pharmaceutical, biopharmaceutical, and medical device businesses make significant investments in the phase III and preclinical stages of developing new medications and technologies. One of the key factors influencing the global drug discovery market is the increase in R&D spending, driven by the need for several preclinical and clinical services during the drug discovery and development process.

The increased burden of chronic illnesses, rising healthcare expenses, and the looming patent expiration of blockbuster pharmaceuticals will be the key drivers of the drug development industry's growth in the coming years. According to the World Health Organization 2020, major chronic disorders such as type 2 diabetes, cancer, chronic obstructive pulmonary disease, and cardiovascular disease (CVD) are predicted to account for 60% of the global disease burden and 73% of all deaths in 2020. As a result, there is a large need for newer, safer, and more effective molecules, which leads to the invention of new pharmaceuticals as disease rates rise and patients become more aware of the importance of personalized therapy.

The amount that pharmaceutical companies spend on R&D has increased over time. As a direct result, more money will be invested in drug discovery. The number of trials investigating novel treatments is likewise increasing. According to a study published in Pharmaceuticals in February 2020, the FDA approved three peptides as Active Pharmaceutical Ingredients (APIs). According to a study published in BioPharma Trend 2020, the usage of artificial intelligence in the pharmaceutical industry for medication development is rapidly increasing. This factor is expected to enhance the significant investment in R&D activities to develop novel therapeutic targets, resulting in market growth.

Healthcare expenditures are another element that drives the drug discovery business. The pharmaceutical sector plays an important role in healthcare by producing medications and vaccines for a variety of health interventions. As a result, annual healthcare spending from businesses and governments has a considerable impact on the expansion of the drug discovery process. Healthcare prices are steadily rising around the world as insurance coverage increases. Hospitals are in higher demand as the patient population grows. The need for novel treatments has grown as healthcare spending has skyrocketed and multiple therapy options for patients' well-being have emerged in hospitals and clinics. As a result, this element is expected to drive market expansion.

Numerous factors determine the amount of money required to generate a medicine, putting a significant financial burden on drug discovery and development companies. One of the key causes of high expenses is the expenditure of failed pharmaceutical candidates during the trial phase. The pharmaceutical business is under pressure to enhance its success rate while using limited resources to reduce the cost of failure, as the return on investment (ROI) is declining significantly. Large firms sustain long-term losses. Nonetheless, losses are severe for small and medium-sized firms. As a result, a significant barrier to the drug discovery sector is the high capital expenditure required for drug development, along with low profit margins.

Pharmaceuticals must frequently adhere to regulatory regulations because the majority of medications are used to treat severely ill people with chronic diseases. Many countries have lengthy clearance processes for pharmaceutical drugs due to stringent regulatory criteria, particularly for cancer-related medications. Regulatory authorities frequently have a considerable impact on how clinical research is designed. As a result of the high regulatory standards imposed by authorizing agencies, the drug discovery market is expected to face restraints throughout the projected period.

Drug Discovery Market Segments’ Analysis

Drug Discovery Market

By Drug Type

Small Molecule

Large Molecule

The Market will Grow

At the CAGR of:

9.34%

The Forecast Market

Size for 2033 in USD:

$149.5B

Drug Discovery market is segmented into drug type, end user, and region.

Based on drug type, the market is classified into small molecules and large molecules. The small molecule drug segment accounted for the largest market share in 2023, and is likely to continue its dominance by the end of 2033. This is attributed to the rising demand for small-molecule medications in the population. Small-molecule medications can easily affect cells and treat ailments due to their small molecules and weight. As a result of growing awareness of the usefulness of small-molecule medications, businesses have boosted their investment in small molecule drug development.

Large molecule segment is expected to increase at the fastest growth rate during the forecast period. The increasing adoption of new manufacturing technology is boosting biologics production. Furthermore, increased public awareness of biologics' effective treatment capabilities, combined with rising healthcare expenditure, is driving growth in the large molecule segment.

Drug Discovery Market

By Technology

XX%

High Throughput Screening

Pharmacogenomics

Combinatorial Chemistry

Nanotechnology

61.2

Total Market Size

USD (Billion), 2023

9.34%

CAGR

2023 - 2033

Based on end user, the market has been segmented into pharmaceutical companies, CROs, and others. The pharmaceutical companies acquired the largest market share in the global market in 2023. This is due to the fact that prominent pharmaceutical and biotechnology businesses are increasing their investments in the development of new treatments. The increased prevalence of chronic diseases, as well as the growing senior population, are driving up demand for a variety of novel treatments. The rising demand for pharmaceuticals around the world has spurred the drug discovery industry. Furthermore, the rapid expansion of the biopharmaceutical industry has considerably aided the market growth.
On the other side, the CROs segment is expected to be the most opportunistic during the projected period. The increasing penetration of various small and medium-sized CROs around the world, driven by rising demand for CRO services among pharmaceutical companies, is accelerating the expansion of the drug discovery market. Research is the most common activity in the drug development process, and small and medium-sized pharmaceutical companies with limited financial resources typically obtain CRO services, which promotes the growth of this category.

Drug Discovery Market Regional Analysis

North America accounted for the largest market share in 2023 in the drug discovery market. The United States is the world leader in terms of R&D spending. Furthermore, the United States owns the patents for the majority of new pharmaceuticals that have been developed recently. Furthermore, the rising frequency of chronic diseases has driven up the need for improved and new treatments, boosting the growth of the North American drug discovery market. Approximately half of the US population suffers from one or more chronic diseases. As a result, the country's healthcare expenditure has increased significantly. Furthermore, increased awareness of biologics in the region is driving market expansion. Furthermore, the rising demand for generic drugs, immunotherapy drugs, and biosimilars is expected to impact the growth of the drug discovery market in North America.

Drug Discovery Market

By Region

The Market will Grow

At the CAGR of:

9.34%

The Forecast Market

Size for 2033 in USD:

$149.5B

Asia Pacific region is expected to witness the fastest growth rate in the upcoming years. This is due to the region's high concentration of CROs. Furthermore, nations such as South Korea, India, and China are substantially investing in the expansion of the pharmaceutical industry, which is driving up demand for biopharmaceuticals. Furthermore, the region's growing senior population is likely to raise demand for pharmaceuticals in the future, as older people are more vulnerable to chronic ailments. According to the United Nations, 80% of the world's geriatric population will live in low-and middle-income countries by 2050. As a result, the region's drug discovery industry is likely to increase rapidly in the coming years.

Drug Discovery Market Key Players

The global drug discovery market is dynamic and multifaceted, with the presence of numerous regional and global companies. Large pharmaceutical companies like Pfizer, Novartis, Roche, and Merck invest heavily in drug discovery. They often have in-house research facilities and collaborate with smaller firms or academia for innovation. Furthermore, Biotech firms such as Amgen, Biogen, and Gilead Sciences focus on developing biologic drugs and often engage in drug discovery partnerships with pharmaceutical companies. Some of the prominent players are mentioned below;

•    Pfizer Inc.
•    GlaxoSmithKline PLC
•    Merck & Co. Inc.
•    Agilent Technologies Inc.
•    Eli Lilly and Company
•    F. Hoffmann-La Roche Ltd
•    Bayer AG
•    Abbott Laboratories Inc.
•    AstraZeneca PLC
•    Shimadzu Corp

Drug Discovery Market Scope: