Pharmaceuticals Market is expected to reach US$ 2,840.30 Billion by 2031

Small Molecule Segment to Bolster Pharmaceuticals Market Growth During 2024–2031

According to our new research study on "Pharmaceuticals Market Forecast to 2031 – Global Analysis – by Molecule Type, Indication, Product, Type, and Distribution Channel," the market was valued at US$ 1,757.78 billion in 2024 and is projected to reach US$ 2,840.30 billion by 2031; it is estimated to register a CAGR of 7.1% during 2024–2031. The pharmaceuticals market report emphasizes the trends prevalent in the global market, along with drivers and deterrents affecting its growth.  

Rising global disease burden, increasing demand for innovative treatments, expanding global access to medicines, and growing emerging markets are contributing to the growing pharmaceuticals market size. However, regulatory pressures and market shifts hamper the growth of the market. Further, regional power shifts, supply chain diversification, and regulatory evolution are expected to bring new pharmaceuticals market trends in the coming years.  

Pharmaceuticals Market Share, by Molecule Type, 2024 (%)

Rising Global Disease Burden and Increasing Demand for Innovative Treatments Bolster Pharmaceuticals Market Growth

The pharmaceutical industry regularly grows by 6% every year, primarily due to the increasing number of people suffering from chronic and severe health conditions. The global burden of diseases such as diabetes, obesity, cancer, and Alzheimer’s continues to rise at an alarming rate, fueling the need for medical advancements. There are currently 171 million diabetics worldwide, and this figure is expected to double by 2030. Obesity affects 1.4 billion people, and projections estimate that this number will reach 3.3 billion by 2030. Cancer is a major health concern, with 1 in 20 women diagnosed with breast cancer and 1 in 12 men diagnosed with cancer overall. Furthermore, 18 million people suffer from Alzheimer’s, and the number is likely to increase to 35 million by 2025.

To address these growing illnesses, pharmaceutical companies are investing heavily in research and development research and development to create innovative treatments. This is evident in the € 1.7 billion (US$ 1.83 billion) pharma research and development investments in Italy, which have grown by 35% over the past five years, outpacing the 20% European average. Additionally, € 700 million (US$ 757.42) is invested annually in clinical trials by pharma companies in Italy alone, rising to € 1 billion (US$1.08) if medical device companies are included. This is further supported by the increasing role of public-private partnerships (PPPs), such as the collaboration between the National Institutes of Health, the US FDA, 10 pharmaceutical companies, and 5 non-profit organizations to accelerate gene therapy development for 30 million Americans suffering from rare diseases.

The impact of COVID-19 pandemic has also significantly shaped pharmaceutical market expansion, adding an estimated US$ 500 billion in net cumulative market growth from 2020 through 2027. While all regions have exceeded first-wave vaccination rates, booster utilization remains inconsistent, creating uncertainties about the future course of the pandemic. The demand for innovative drugs will continue to surge, particularly in oncology, where spending is projected to reach US$ 370 billion by 2027—almost double the current level. Moreover, specialty medicines will represent 43% of global spending by 2027 and 56% of total spending in developed markets. Biotech medicines, including breakthrough cell and gene therapies, will account for 35% of global spending by 2027, marking a shift toward advanced biotherapeutics.

The pharmaceuticals market analysis has been carried out by considering the following segments: molecule type, indication, product, type, distribution channel, and geography. The pharmaceuticals market, based on molecule type, is divided into small molecule, and biological and biosimilar products. The small molecule segment held a larger share of the pharmaceuticals market in 2024 and is expected to register a higher CAGR during 2024–2031. By indication, the market is segmented into metabolic diseases, cancer, immunology, respiratory disorder, cardiovascular disorder, neurology disorder, rare disease, and others.

Small molecules are chemically synthesized and have low molecular weight. They are commonly available as tablets, capsules, and injectables. Their simple structure and well-understood pharmacokinetics make them highly effective in treating a wide range of conditions, including cancer, cardiovascular diseases, infectious diseases, and neurological disorders.

The continued growth of the small molecule market is majorly attributed to its cost-effectiveness. Compared to biologics, small molecules are easier and cheaper to manufacture, making them widely accessible to patients worldwide. Generics play a crucial role in affordability, offering alternatives to brand-name drugs at a fraction of the cost. As patents on blockbuster drugs expire, the market sees a surge in generic versions, further increasing availability and competition.

Pharmaceutical companies are increasingly investing in research and development to improve small-molecule drug design. Integration of artificial intelligence (AI) and machine learning (ML) is helping speed up drug discovery, allowing researchers to identify new compounds with enhanced therapeutic potential. Additionally, the growing focus on targeted therapies and precision medicine is enabling small molecules to be designed for specific disease pathways, leading to better efficacy and fewer side effects.

Chronic diseases are on the rise, particularly among aging populations, creating an ever-increasing demand for effective medications. Governments and healthcare organizations are actively promoting the use of generics to make essential medicines more affordable. Small molecules are often used in combination with biologics to maximize treatment benefits. Faster drug approvals and industry collaborations are further fuelling market expansion, making small molecules a mainstay in pharmaceutical innovation.

Small Molecule Drugs Among the Top-Selling Pharmaceuticals

As per the article published by manufacturing chemist 2023, of the top 10 drugs sold worldwide in 2021, 4 were small molecules. However, with 2 of the top three bestsellers being COVID-19 vaccines, this skews the data slightly. The total sales value of these 10 drugs is approximately US$ 181 billion, representing roughly 30% of the total pharmaceutical market. With the removal of two COVID-19 vaccines (Comirnaty and Spikevax), the next two bestsellers—Xarelto and Opdivo—bring the small molecule vs. biologic drug split to an even 50:50 ratio.

Table: Top-Selling Drugs in 2021

This data highlights the significant presence of small molecules among the best-selling drugs, reinforcing their continued importance in the pharmaceutical landscape.

Opportunities in Small Molecule Manufacturing for CDMOs

The global small molecule innovator contract development and manufacturing organizations (CDMO) market was estimated at US$ 41.1 billion in 2020 and is expected to reach ~US$ 73.9 billion by 2030. Companies operating in this space leverage prevailing trends to differentiate themselves in an increasingly competitive market. Investment in the right areas, as well as the ability to assist developers from clinical development through to commercialization, will be critical in maximizing growth opportunities.

Controlled Substances

Controlled substances encompass both innovator drugs and various generic active ingredients, including opioids, depressants, stimulants, and cannabinoids. These drugs are used to treat conditions such as pain management, depression, post-traumatic stress disorder, attention deficit hyperactivity disorder, anxiety, and neurological disorders. Despite the increasing legalization of cannabinoids in various US states, they remain classified as controlled substances.

While handling controlled substances, CDMOs require highly secure facilities with strict compliance regulations. Production and storage must incorporate steel vaults, stringent perimeter security, and 24/7 surveillance. Additionally, specialized government licenses are necessary for manufacturing and handling controlled substances. Despite ongoing challenges including the emergence of potent synthetic opioids like nitazenes, which are significantly stronger than fentanyl and have been linked to overdose deaths , controlled substances including cannabinoids and the painkiller buprenorphine—continue to dominate, accounting for more than 80% of all controlled substances.

Highly Potent APIs

Approximately 45% of all small molecule new chemical entities (NCEs) are classified as highly potent, requiring specialized containment facilities for safe production. Highly potent active pharmaceutical ingredients (HPAPIs) currently account for over 25% of the total drugs worldwide, making them one of the most significant specialized segments in pharmaceuticals. Many pharmaceutical developers lack in-house expertise or facilities to handle HPAPIs beyond small-scale laboratory production, leading to increased reliance on CDMOs with the necessary infrastructure and technical capabilities.

Antibody-Drug Conjugates

Antibody-drug conjugates (ADCs) combine a biologic component (an antibody) with a highly potent small molecule drug. These drugs offer precise targeting for treatments, particularly in oncology. Only 13 ADCs have been approved so far by the FDA, 167 ADC programs are in clinical trials, and over 400 ADCs are in preclinical development. As the ADC market expands, CDMOs specializing in HPAPI manufacturing will play a critical role in advancing these therapies. The highly potent small molecule component of ADCs requires stringent containment measures, further increasing demand for specialized contract manufacturers.

Small Molecules, Big Future

The pharmaceutical industry continues to evolve, driven by new technologies and the increasing complexity of therapeutic needs. Outsourcing to CDMOs remains a crucial strategy for accelerating drug development and improving efficiency. With the growing focus on controlled substances, HPAPIs, and ADCs, small molecule drugs will continue to be an essential part of the global pharmaceutical landscape.   

The geographical scope of the pharmaceuticals market report includes the assessment of the market performance in North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.

The pharmaceuticals market in North America is segmented into the US, Canada, and Mexico. The US holds the largest market share, followed by Canada. Key factors contributing to the market growth in North America include the rising cancer incidence, increasing investments in research and development, and surging product launches. Additionally, strategic initiatives such as the development of new products, regulatory approvals, collaborations, and acquisitions are further propelling the growth of the pharmaceutical market in the region.  

One of the primary market drivers is the aging population in North America. As people age, they often develop chronic diseases and conditions that require continuing pharmaceutical treatments. According to the US Census Bureau, by 2030, one in five Americans will be 65 years or older, fueling the demand for medications related to age-related conditions.

The pharmaceutical market is also driven by rapid innovations in biotechnology. The development of biologic drugs, personalized medicine, and gene therapies has revolutionized the treatment of diseases such as cancer, rare genetic disorders, and autoimmune diseases. This includes CAR-T cell therapies and monoclonal antibodies, which are gaining traction in the market.

Strong regulatory bodies such as the US Food and Drug Administration (FDA) and Health Canada ensure pharmaceutical safety, efficacy, and quality. The regulatory process is rigorous, and it has also led to the consistent introduction of new drugs to the market.

The digital transformation of healthcare, including telemedicine and digital therapeutics, presents new opportunities for the market. Pharmaceutical companies can partner with digital health providers to create integrated solutions for chronic disease management, personalized treatment regimens, and remote patient monitoring.

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