The average cost to develop a drug is $2.3 billion, and an increasing share of that spending has gone to contract research organizations (CROs) and contract development and manufacturing organizations (CDMOs) in recent years. From 2014 to 2022, CRO and CDMO spending increased by about 13 percent annually, compared with about 8 percent for overall R&D spending. Senior Partner Gaurav Agrawal and coauthors note that this outsourcing trend could accelerate, with CRO and CDMO spending projected to more than double the 2014 total within the next four years.
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A stacked bar chart shows the annual global pharmaceutical industry R&D spending from 2014, 2022, and an estimate for 2029. In 2014, spending among contract research organizations (CROs) and contract development and manufacturing organizations (CDMOs) composed $32 billion of the total $144 billion. This spending grew to $82 billion in 2022, representing a 12% increase. By 2029, CRO and CDMO spending is estimated to reach $135 billion. Overall, global pharmaceutical R&D spending was $144 billion in 2014, grew to $251 billion in 2022, and is estimated to reach $350 billion by 2029.
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To read the article, see “Building a shared vision for pharma R&D–supplier partnerships,” January 9, 2025.