Global Drug Discovery Market By Drug Type (Small Molecule, & Large Molecule), By Technology (High Throughput Screening, Pharmacogenomics, Combinatorial Chemistry, Nanotechnology & Other Technologies), By End-Use (Pharmaceutical Companies, Contract Research Organizations, & Others) Region and Companies – Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2023-2033

Report Overview

Global Drug Discovery Market size is expected to be worth around USD 71.3 billion by 2023 from USD 173.5 billion in 2033, growing at a CAGR of 9.5% during the forecast period 2024 to 2033.

The global drug discovery market is expanding due to increasing demand for innovative therapies and advancements in biotechnology. The growing prevalence of chronic diseases, such as cancer and cardiovascular disorders, has driven pharmaceutical companies to focus on the development of novel treatments.

Technological innovations, including artificial intelligence and high-throughput screening, are streamlining the identification of drug candidates, enhancing efficiency. Collaboration between pharmaceutical companies, academic institutions, and research organizations, along with government support in terms of funding and regulatory incentives, is further advancing drug discovery.

The rise of personalized medicine, which tailors treatments based on genetic profiles, and the increasing focus on biologics, such as gene therapies, are shaping the future of drug development. Despite challenges like high research costs and stringent regulations, the market continues to grow, offering opportunities for the discovery of new, life-saving therapies.

Key Takeaways

• Market Size: Drug Discovery Market size is expected to be worth around USD 71.3 billion by 2023 from USD 173.5 billion in 2033.
• Market Growth: The market growing at a CAGR of 9.5% during the forecast period 2024 to 2033.
• Drug Type Analysis: In 2023, Sterilization Supplies asserted their dominance, holding 11.5% of the total revenue share.
• Technology Analysis: In terms of technology, High Throughput Screening (HTS) dominated the global Drug Discovery Market, holding a substantial 35.2% share, in 2023.
• End-Use Analysis: In 2023, pharmaceutical companies held the largest share of the drug discovery market.
• Regional Analysis: North America dominated the global Drug Discovery Market, holding a share of 42.1% in 2023.
• Technological Advancements: Innovations like AI, machine learning, and automation are accelerating drug discovery processes, reducing time-to-market.
• Outsourcing Trends: Pharmaceutical companies increasingly outsource drug discovery to specialized contract research organizations (CROs) for cost efficiency.
• Therapeutic Focus: Oncology remains the dominant therapeutic area, with substantial investment in cancer drug research.

By Drug Type Analysis

In 2023, Sterilization Supplies asserted their dominance, holding 11.5% of the total revenue share. The drug discovery market is divided into two primary categories: small molecules and large molecules. Small molecules have historically dominated the market due to their lower production costs, ability to be administered orally, and efficacy in treating a wide range of diseases.

These drugs are chemically synthesized and can easily penetrate cell membranes, making them suitable for intracellular targets, which is crucial for conditions like cardiovascular diseases and cancer.

• Imatinib (Gleevec), developed by Novartis, has revolutionized the treatment of chronic myeloid leukemia (CML) and solidified small molecules’ dominant role in the market.

However, large molecules or biologics are the fastest-growing segment in terms of compound annual growth rate (CAGR), particularly in areas like cancer and autoimmune diseases. Biologics, which include monoclonal antibodies and gene therapies, are highly specific in targeting complex biological processes.

• Keytruda (Pembrolizumab), a humanized monoclonal antibody from Merck has become a major player in cancer immunotherapy, showcasing the growing importance of biologics in the drug discovery landscape.

By Technology

In terms of technology, High Throughput Screening (HTS) dominated the global Drug Discovery Market, holding a substantial 35.2% share, in 2023. High Throughput Screening (HTS) is a powerful and widely used technology in the drug discovery process, designed to rapidly evaluate the biological or biochemical activity of a large number of compounds.

HTS enables researchers to test thousands to millions of chemical compounds in a relatively short time, identifying promising candidates for further development in drug pipelines. This technology is crucial in the early stages of drug discovery, particularly in identifying active compounds that modulate biological targets, such as proteins, enzymes, or cellular pathways.

• For example, AstraZeneca uses HTS extensively in its drug discovery programs to identify new treatments for cancer and cardiovascular diseases.

Furthermore, combinatorial chemistry is playing a vital role in generating diverse chemical libraries for drug discovery, enabling the development of innovative treatments.

By End-Use Analysis

In 2023, pharmaceutical companies held the largest share of the drug discovery market, driven by their substantial investments in research and development (R&D) and in-house capabilities to develop both small molecules and biologics. These companies are at the forefront of drug discovery, utilizing cutting-edge technologies such as high-throughput screening, artificial intelligence, and genomics to accelerate the development of new drugs.

For example, Pfizer and Novartis have made significant advancements in cancer treatments through the discovery and development of targeted therapies and immunotherapies, reinforcing their leadership in this segment.

Key Market Segments

By Drug Type

• Small Molecule
• Large Molecule

By Technology

• High Throughput Screening
• Pharmacogenomics
• Combinatorial Chemistry
• Nanotechnology
• Other Technologies

By End-use

• Pharmaceutical Companies
• Contract Research Organizations
• Others

Drivers

Growing Chronic Disease Burden

The predominance of chronic diseases is a key driver in the global drug discovery market. Chronic conditions such as cardiovascular diseases, diabetes, cancer, and respiratory disorders continue to rise, largely due to aging populations, sedentary lifestyles, and poor dietary habits.

• Research from the National Council on Aging (NCOA) indicates that 94.9% of adults aged 60 and older have at least one chronic condition, while 78.7% are affected by two or more conditions.

This growing burden underscores the urgent need for the development of new and effective therapies. The rise in chronic diseases has heightened the demand for innovative drugs that offer better treatment outcomes and reduce long-term healthcare costs. Pharmaceutical companies are increasingly focusing on the discovery of novel therapeutics that target these prevalent diseases. In particular, advancements in biotechnology, genomics, and molecular biology are enabling the development of targeted therapies that address the underlying causes of chronic conditions.

Moreover, the increasing prevalence of lifestyle-related diseases, such as diabetes and obesity, has spurred significant investment in research and development, further accelerating drug discovery efforts. This focus on addressing the global chronic disease burden continues to be a major growth factor for the drug discovery market.

• According to the WHO, in 2022, one in eight individuals globally was living with obesity. Since 1990, adult obesity rates have more than doubled, while obesity among adolescents has increased fourfold.

Restraints

High Research and Development Costs

The high costs associated with research and development (R&D) are a major challenge for the global drug discovery market. Developing a new drug is a complex, time-consuming process that often takes years of research, testing, and regulatory approval. This involves significant financial investment at each stage, from early-stage discovery to preclinical testing, and eventually, clinical trials.

• Bringing a new prescription drug to market can cost over $2.6 billion, factoring in both successful developments and failed trials.

Moreover, many drug candidates fail during clinical trials, adding to the financial risk and making it difficult for pharmaceutical companies, especially smaller firms, to justify large-scale investments in drug discovery. These high costs not only limit innovation but can also result in higher prices for newly approved medications. As a result, the significant R&D expenses act as a substantial barrier, slowing down the pace of drug development and market growth.

Opportunities

Growth of Precision Medicine and the Rise of Genomic-Based Drug Discovery.

Advances in genomics and the ability to sequence entire genomes at lower costs have enabled researchers to identify genetic variations associated with diseases, paving the way for more targeted drug therapies. This is revolutionizing drug discovery by enabling the development of treatments tailored to the genetic profile of individual patients, improving efficacy and reducing adverse effects.

• The collaboration between Novartis and CRISPR Therapeutics, which focuses on using CRISPR gene-editing technology to develop gene therapies. These therapies target specific genetic mutations responsible for diseases such as sickle cell anemia and beta-thalassemia. By leveraging genomic insights, Novartis aims to discover and develop therapies that provide long-term or even curative treatments, illustrating the potential of precision medicine in the drug discovery landscape.

This shift towards precision medicine, supported by advancements in genetic research, represents a significant opportunity for pharmaceutical companies to develop more effective and personalized treatments.

Impact of Macroeconomic / Geopolitical Factors

Macroeconomic and geopolitical factors can have a substantial influence on the drug discovery market. Economic downturns or financial instability can limit funding for research and development, making it more difficult for pharmaceutical companies to invest in new projects. Geopolitical tensions, such as trade wars or sanctions, can disrupt the supply chain, making it harder to source raw materials or access international markets.

Additionally, regulatory policies vary across countries, and shifts in political leadership can lead to changes in healthcare priorities or funding, which can directly impact drug approval processes. In some cases, these factors may slow down drug development timelines, increase costs, or restrict market access, ultimately affecting the pace and scope of innovation in the industry.

Latest Trends

Advancements in AI and Machine Learning for Drug Discovery

Technological advancements in artificial intelligence (AI) and machine learning (ML) are significantly shaping the drug discovery market. AI and ML are being used to analyze large datasets, predict potential drug candidates, and optimize clinical trial designs, helping to reduce time and costs associated with the drug discovery process. These technologies can also identify novel drug targets and streamline the development of personalized medicine.

• In 2024, Ginkgo Bioworks acquired Reverie Labs, a company specializing in AI and ML tools for drug discovery.

The growing integration of AI and ML into drug discovery is creating opportunities for faster and more efficient drug development.

Regional Analysis

North America is leading the Drug Discovery Market

North America dominated the global Drug Discovery Market, holding a share of 42.1% in 2023 due to its advanced healthcare infrastructure, high healthcare expenditure, and significant adoption of medical technologies. The region held a share of 35.6% and is expected to lead the market in the forecast period as well. The United States plays a crucial role with its well-established healthcare system and substantial investment in medical research and development.

The prevalence of chronic diseases and an aging population drive continuous demand for disposable medical supplies, such as syringes, gloves, and wound care products. Additionally, North America’s stringent regulatory framework, enforced by agencies like the FDA, ensures the safety and efficacy of medical disposables, fostering trust and widespread adoption among healthcare providers. These factors collectively position North America as a leader in the global Drug Discovery Market.

The Asia Pacific region is expected to experience the highest CAGR during the forecast period

The Asia Pacific region is poised to experience the highest Compound Annual Growth Rate (CAGR) in the Drug Discovery Market during the forecast period. Rapid urbanization and economic development in this region have led to significant improvements in healthcare infrastructure and increased healthcare spending. Governments and private sectors are heavily investing in upgrading medical facilities and adopting advanced technologies, thereby enhancing patient care standards.

Moreover, the Asia Pacific region is seeing a surge in healthcare awareness and the implementation of stringent infection control measures, which further boost the demand for disposable medical products. The growth in medical tourism in countries like India, Thailand, and Malaysia also contributes to the expanding market, as these nations provide cost-effective medical treatments that attract international patients.

Key Regions and Countries

North America

• US
• Canada

Europe

• Germany
• France
• The UK
• Spain
• Italy
• Russia
• Netherland
• Rest of Europe

Asia Pacific

• China
• Japan
• South Korea
• India
• New Zealand
• Singapore
• Thailand
• Vietnam
• Rest of APAC

Latin America

• Brazil
• Mexico
• Rest of Latin America

Middle East & Africa

• South Africa
• Saudi Arabia
• UAE
• Rest of MEA

Key Players Analysis

The global drug discovery market is highly competitive, with key players driving growth through various strategic initiatives. These initiatives are centered around product innovation, mergers and acquisitions (M&A), and collaborations with other industry players and research institutions. By focusing on these areas, companies are able to expand their market presence, increase product offerings, and enhance their competitiveness.

• For example, in August, 2024, Recursion and Exscientia have finalized an agreement with a view to create a leading global company in drug discovery. This merger leverages advanced technologies, including artificial intelligence (AI), to offer comprehensive, end-to-end solutions in drug discovery.

Top Key Players

• Hoffmann-La Roche Ltd
• Bayer AG
• Abbott Laboratories Inc.
• Shimadzu Corp
• Eli Lilly and Company
• AstraZeneca
• Sanofi
• Pfizer Inc.
• GlaxoSmithKline PLC
• Merck and Co. Inc.
• Agilent Technologies Inc.
• Polpharma Biologics Group
• Novartis AG
• Takeda Pharmaceutical Company Limited.
• Teva Pharmaceutical Industries Ltd.
• Other Key Players

Recent Developments

• January 2023: The US Food and Drug Administration granted accelerated approval to Leqembi (lecanemab-irmb) for the treatment of Alzheimer’s disease. This approval pathway allows earlier access to drugs that treat serious conditions and fill an unmet medical need, based on evidence that the drug has an effect on a surrogate endpoint, in this case, targeting amyloid plaques in the brain.
• July 2022: Merck and Orion have announced a global collaboration to develop and commercialize ODM-208, an investigational inhibitor of steroid synthesis aimed at treating metastatic castration-resistant prostate cancer.

Report Scope