In 2024, CDMO and pharma companies delivered a mixed performance. Many met or even surpassed their growth targets, but performance varied significantly across modalities, segments, and geographies. North American CDMOs outperformed their European peers. Meanwhile, established pharma led the way over emerging biopharma companies: 86% met or surpassed their goals, compared to 74% of these newer players.
This year has been more optimistic, especially for CDMOs. According to Simon-Kucher’s latest CDMO Growth Report (1) – developed in collaboration with PharmaSource and based on insights from over 100 executives from CDMO and pharma companies globally – confidence is growing. Over 80% of early-phase CDMOs expect stronger performance and momentum is building across small molecule and end-to-end providers. Pharma companies share this optimism to some degree, yet they are more cautious.
Growth will not come easily though. The CDMO market is entering a high-stakes phase – defined not by scale alone, but by precision. The difference between strong performers and true leaders? A deliberate focus on six critical levers: engagement, pricing, capacity, value-added services, high-value modalities, and technology. This commitment to precision is founded on partnership excellence: a co‑creative approach that ensures every lever drives mutual value and trust. Mastering these will define the winners.
Tailor engagement because one-size no longer fits all
CDMO-pharma relationships are becoming more complex. While both sides agree on core factors like quality (prioritized by 54% of CDMOs and 53% of pharma respondents) and cost-effectiveness (CDMO 48% vs pharma 51%), their views on other value drivers don’t always align.
When it comes to partnership priorities, supply chain reliability ranks just behind quality for 42% of pharma companies, yet only 21% of CDMOs see it as a top concern. In contrast, speed is the main priority for over half of CDMOs, while only 36% of pharma companies view it as critical. These differences shape how each side defines value and assesses performance.
To remain relevant and credible, CDMOs must engage with precision. That starts with applying distinct strategies for different segments. Emerging biopharma value communication (56%) and scientific expertise (44%), while established players value supply chain reliability (48%) and operational scale (37%).
Top CDMOs are responding accordingly. They’re moving away from incremental service tweaks to offer tailored engagement models: customized configurations, refined contract structures, tailored communication, and pricing structures aligned to specific partner expectations.
Why this matters: Treating every client the same is no longer viable. Relevance requires a deep understanding of the business behind the pipeline and the flexibility to engage accordingly. A collaborative model accelerates trust and drives engagement outcomes that measurably advance both parties’ goals.
Implement flexible, smart pricing models
Standard, across-the-board pricing is not realistic or compatible with today’s pharma industry. In 2025, pricing flexibility is a strategic lever – one that signals partnership intent as much as it creates differentiated value.
Many CDMOs are discussing and considering tailored pricing models to align better with the financial and strategic needs of each segment. But there’s still no strong agreement on their effectiveness or the best way to implement them. 72% of emerging biopharma, often operating with constrained budgets, favor outcome- or milestone-based pricing models that offer flexibility and clearer ROI. With broader portfolios and bigger budgets, almost half of established pharma value optionality and risk-sharing across programs.
The most forward-thinking CDMOs are customizing pricing not only with what clients are willing to pay but with how they define value. That might mean tiered pricing for one segment or outcome-linked structures for another. What it doesn’t mean is a standard pricing for everyone. At the same time, take-or-pay models that are favored by nearly one-fifth of CDMO companies remain polarizing. While they offer security for the supplier, they can feel inflexible to clients when timelines shift or demand changes.
Why this matters: Pricing today communicates a message beyond profits. It indicates long-term partnership potential and strategic alignment. It builds trust, reduces friction, and creates accountability from the start. In a high-stakes market, a win-win pricing model is a strategic partnership signal. By co‑creating milestone‑ or outcome‑based structures, both CDMOs and pharma partners gain clear visibility on risk sharing and performance expectations.
Secure capacity early or be left behind
Both CDMOs and pharma companies are keeping a close eye on manufacturing capacity, with some segments expecting tighter constraints than others. Capacity is a key differentiator for those who plan ahead.
Among pharma, concern is most acute within established players (70%+). They’re not taking chances. Many are already locking in capacity with trusted CDMO partners well in advance, to protect timelines and avoid future launch risks.
CDMOs see the same constraints but that pressure is viewed as an opportunity: greater pricing leverage and a strategic lever. 62% of late-phase CDMOs expect capacity issues – the highest of any group – followed by 46% of end-to end providers and just 22% of early-focus CDMOs. For suppliers, it signals a seller’s market. As a result, CDMOs are prioritizing key accounts, making targeted investment decisions, and sharpening internal processes.
Embedding partnership excellence into capacity planning means joint forecasting of volumes, timelines, and contingency scenarios, rather than unilateral commitments. The stakes are clear. For those who move early and act decisively, this environment can favor growth. For those who hesitate, the cost is measured in missed milestones, delayed launches, and lost revenue.
Why this matters: Capacity is finite. As pharma players move quickly to secure access, CDMOs have a narrow window to respond strategically. Those that prioritize key accounts and streamline operations will be the ones to grow.
Develop value-added services with real commercial intent
Many CDMOs are re-evaluating what “value-added” means – and shifting from generic add-ons to more strategic offerings that deepen partnerships and support revenue growth.
The most competitive players are becoming more deliberate in how they package these services. Rather than offering them as ad hoc extras, they’re building them into thoughtful, tiered packages that address specific partner needs.
For some clients, value comes through technical depth like analytical method development, formulation support, or regulatory guidance. For others, it’s about operational strength: faster tech transfer, integrated quality systems, or real-time visibility tools.
On top of enhancing differentiation, this approach also drives stickiness and client satisfaction. For example, in emerging biopharma, these services often play a critical role in bridging internal capability gaps and accelerating timelines.
Why this matters: Value-added services aren’t optional or a code for “nice to have”. When designed around real partner needs, strong positioning for these complementary packages could become a deciding factor for one CDMO being chosen over another.
Act on high-value modalities to stay ahead
Nearly 50% of CDMOs and pharma companies identify antibody-drug conjugates (ADCs) and other oncology-related therapeutics as the fastest-growing areas for outsourced development and manufacturing.
Rising cancer prevalence and increasing demand for targeted, high-potency treatments are turning both oncology-related therapeutic areas and advanced modalities into major growth engines for CDMOs.
While there is strong alignment on the growth potential of ADCs, opinions vary on other high-potency modalities. Nearly half of pharma companies identify highly potent active pharmaceutical ingredients (HP APIs) as a high growth modality, yet only a quarter of CDMOs share that view.
Why this matters: CDMOs that invest early in new and high-growth modalities are better positioned to capture the next wave of demand and stand out in a competitive market.
Invest in tech not just to compete, but to lead
Digital readiness is now a basic expectation. In order to win, businesses must lean into real innovation enablers that improve execution, reliability, and scale.
AI, predictive maintenance, and continuous manufacturing are becoming table stakes for top-performing CDMO and pharma companies. But investment remains fragmented. The absence of a single dominant technology to attract broad commitment from companies highlights the ongoing uncertainty.
While pharma is accelerating investment, particularly in AI and process analytical technology, many CDMOs are still holding back.
Take AI for example. It is among the top digital priorities for both sides, but investment levels differ (CDMO 28% vs pharma 40%).
Overall, there’s a growing misalignment in investment expectations: established pharma expects predictive maintenance to reduce risk and downtime. Emerging biopharma wants AI-enabled quality control. But many CDMOs underinvest in precisely these areas.
Some forward-looking CDMOs are starting to close the gap on future-proofing their businesses. Those who commit to digital transformation, especially in high-value use cases like quality and maintenance, will be the preferred partner.
Why this matters: Pharma is watching. Companies want partners who are equipped with the right digital maturity to help them grow. This demonstrates operational excellence and long-term viability. Additionally, with current uncertainty, it can be a powerful differentiator.
Compete on precision, win on execution for CDMO growth
In a market where confidence is high, but conditions are tightening, success will come down to timing, focus, and execution.
CDMOs that act early, prioritize right collaboration through a model of partnership excellence, and invest strategically will emerge as true market leaders.
Figure 1. Source: Simon-Kucher and PharmaSource. CDMO Growth Report 2025 (1).
Figure 2. Source: Simon-Kucher and PharmaSource. CDMO Growth Report 2025 (1).
References and notes
- Simon-Kucher and PharmaSource. CDMO Growth Report 2025
- Contact us today to discuss insights from our 2025 CDMO Growth Report in detail or to request the full report.
