Oral solid dosage (OSD) products, the oldest and most well-understood type of formulation, continue to dominate the pharmaceutical industry, accounting for the largest category of manufactured drugs and the most prescribed dose form for various indications.
The category includes pharmaceutical formulations that are taken by mouth in a solid form, including tablets, capsules, granules, sachets, powders, dry powder inhalers, and lozenges. According to Roots Analysis, two-thirds of the total drugs prescribed worldwide are dispensed in the form of oral solids. Furthermore, approximately 84% of the best-selling pharmaceuticals are administered orally, and oral solid dose forms account for nearly 30% of the small molecules in the development pipeline.
Several factors contribute to the enduring dominance of oral solids. Firstly, they are highly cost-effective and offer manufacturing efficiencies. Secondly, they exhibit stability compared to biologics, which necessitate ultra-cold storage conditions. Lastly, they are patient-friendly, making them a preferred choice for many healthcare professionals.
A recent market analysis report by Grand View Research reveals that the global oral solid dosage contract manufacturing market size was estimated at $36.50 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 5.97% from 2024 to 2030. This growth is driven by advancements in drug delivery technology, such as targeted drug delivery and sustained release dosage forms, investments by contract development manufacturing organizations (CDMOs) to expand OSD development capabilities, and the increasing demand for novel therapies. Furthermore, personalized medicine and the increase in pharmaceutical alliances are likely to propel the oral solid dose contract manufacturing market, offering more opportunities for industry collaboration.
However, the sector comes with its own set of challenges, from the impact of global supply chain disruptions, geopolitical instability, and regulatory changes, to cost pressure and competition from other global regions—all of which will be discussed in this article.
The following offers perspectives from CDMOs and CROs on today’s oral solid dosage trends across drug development, manufacturing and more.
The current state of the market
The consensus among industry insiders is that the market for outsourcing oral solid dose development and manufacturing remains strong. “Oral solid dose provides the most cost effective and stable option for delivering drugs and will likely remain the ‘Holy Grail’ for developers,” says J.D. Mowery, president of Bora CDMO.
“The global pharmaceutical industry is witnessing a sustained rise in demand for outsourced OSD development and manufacturing. With increased pressure on pharmaceutical companies to accelerate time-to-market, enhance cost efficiency, and ensure regulatory compliance, CDMOs have become strategic partners in enabling agile and scalable solutions,” says Alex Del Priore, senior vice president and a member of the executive committee at Syngene.
Mark English, vice president of operations, Almac Pharma Services, concurs. He calls the current state of the market for outsourcing OSD development and manufacturing “quite dynamic and promising,” and cites several key factors that are driving demand, including pharmaceutical companies increasingly wanting to partner with CDMOs for specialized expertise and capabilities and the rise in adoption of integrated supply chain models for a seamless transition from development to production.
“The market for outsourcing oral solid dose development and manufacturing is driven by increasing drug pipeline activity, the growing complexity of formulations, and shifting global supply chain strategies,” adds Tom Sellig, CEO of Adare Pharma Solutions.
Sellig continues, “Personalized medicine, innovative drug delivery systems, and multi-functional dosage forms are in higher demand than ever, requiring CDMOs to invest in specialized capabilities and advanced manufacturing solutions.”
Furthermore, Sellig identifies “reshoring efforts, rising transportation costs, and supply chain disruptions” as significant factors that have led pharmaceutical companies to seek reliable, geographically diverse partners.
The topic of reshoring is touched on by several industry experts. “Regulatory pressures and supply chain concerns, exacerbated by global disruptions, are prompting a shift toward onshoring and nearshoring strategies,” says Hamilton Lenox, chief commercial officer, LGM Pharma. “Moving forward, CDMOs that offer agility, specialized expertise, and scalable manufacturing solutions will be best positioned to meet evolving market demands.”
L. Lee Karras, CEO, the Noramco Group, says, “It’s clear the U.S. government is creating both economic and logistical incentives to onshore production in the U.S.,” but notes that there is “significant capacity” available in the APAC region, which is driving pricing pressures for domestic supply.
Peter Surman, chief scientific officer, Douglas CDMO, is more skeptical about the push toward onshoring production in the U.S. “Despite the U.S. Federal drive to bring back manufacture of OSD products to the U.S., the cost of supply from U.S. sites is not often competitive even when tariffs are included on imports,” Surman argues. “This is particularly so for generic products where price points are low and set by markets such as India and China, particularly for large volume medicines.
“The high strength of the U.S. dollar favors the continued growth of outsourcing the manufacture of small molecule generics as well as novel pharmaceutical products,” he adds. “There are good opportunities for drug developers to outsource formulation development and manufacture to CDMOs in countries such as New Zealand that share a common culture to the U.S. along with a high level of business integrity and lower operational costs.”
“Tariffs—both actual and potential—are driving many companies with global supply chains to stockpile materials to avoid cost impacts. OSD manufacturers rely on excipients, APIs, clean room supplies, and packaging components, many of which are supplied from non-U.S. sources,” Noramco’s Karras says.
Karras warns, “As costs rise, the manufacturers who rely on non-U.S. sources of these materials and components will be forced to pass on the cost of their respective supply chains to customers. This is an especially difficult challenge in the generics space where wholesalers have squeezed pricing on OSDs so tight that any increase in cost without a subsequent increase in price risks leading to more discontinuations and drug shortages.”
Adare’s Sellig asserts, “The industry’s continued reliance on outsourcing—particularly among small and virtual pharma companies—has made flexible, end-to-end CDMO solutions more valuable than ever.”
Evolving demand & key growth drivers
While demand for CDMOs that offer oral solid dose development and manufacturing remains robust, the sector is constantly evolving—especially post-COVID and in our current environment in which a new presidential administration is enacting new policies that seek to encourage reshoring. Complex formulations, high-potency compounds and personalized medicine are some of the areas that the experts identified as growth areas.
“Demand has shifted from traditional tablets and capsules toward more potent formulations, orally disintegrating tablets (ODTs), and complex production methods,” says Noramco’s L. Lee Karras.
According to Karras, key drivers of this shift include disease areas like oncology, which require more potent APIs, and patient-centric formulations such as taste-masking for pediatric medicines and fast-dissolving tablets to improve patient compliance, enabling new formulations of existing drugs, and more convenient dosing of new drugs. Additionally, for advanced drug delivery, technologies like pulsatile or sustained-release products require more sophisticated manufacturing approaches, including multi-particulate systems, bead coating, and multi-API tablets and capsules.
“OSD outsourcing has evolved significantly due to multiple factors, including the growing complexity of formulations, rising demand for high-potency compounds, and the push for innovative drug delivery technologies,” observes Syngene’s Alex Del Priore. “Additionally, the trend toward patient-centric treatments—such as controlled-release and modified-release formulations—has led to increased investments in advanced manufacturing capabilities.”
Adare’s Tom Sellig voices a similar outlook. He says, “Personalized medicine, innovative drug delivery systems, and multi-functional dosage forms are in higher demand than ever, requiring CDMOs to invest in specialized capabilities and advanced manufacturing solutions.”
“The shift towards personalized medicines has led to a greater need for flexible manufacturing solutions,” explains Almac’s Mark English. “Personalized treatments often require smaller batch sizes and more specialized production processes, which CDMOs are well-equipped to handle. This flexibility allows pharmaceutical companies to meet the specific needs of individual patients more effectively.”
English also sees increasing complexity in drug formulations, “particularly with the rise of high-potency drugs and controlled release technologies.” He says, “These complex formulations require specialized expertise and advanced manufacturing capabilities, which many pharmaceutical companies find more efficient to outsource to CDMOs.”
Bora’s J.D. Mowery backs up this assertion. “We are seeing demand grow for highly potent OSDs,” he says. “Much of this is driven by the continued evolution of science for more targeted treatments, as in the case of cancer treatments.”
Challenges
Pharmaceutical companies face many challenges when outsourcing OSD manufacturing. LGM Pharma’s Hamilton Lenox cites “ensuring quality control, maintaining regulatory compliance, and managing supply chain disruptions” as three of the biggest obstacles.
“Pharmaceutical companies now have dedicated teams to manage CDMO partnerships due to the complexity of regulatory, quality, and tech transfer processes, not to mention supply chain dynamics and strategic sourcing,” says Aaron M. Dely, vice president of R&D at PL Developments.
“Understanding the CDMO depth and breadth of expertise can be challenging,” adds Thomas Gold, head of global formulations R&D at Piramal. “Some pharmaceutical companies will tackle this by hiring a consultant to help manage multiple sites or multiple CDMOs.”
Almac’s Mark English cites “maintaining quality and consistency across the manufacturing process” as one of the primary challenges companies face when outsourcing OSD manufacturing.
“Pharmaceutical companies must ensure that the CDMOs they partner with adhere to stringent regulatory standards and maintain high-quality production,” English says. “CDMOs are addressing this by investing heavily in advanced technologies and facilities that can handle complex manufacturing processes, including those required for high-potency molecules.”
He continues, “Another significant challenge is managing the complexity of supply chains. Outsourcing can introduce risks related to vendor management and supply chain disruptions. To mitigate these risks, CDMOs are adopting integrated supply chain models that provide a seamless and efficient transition from development to production. This approach helps in reducing time and costs while ensuring scientific continuity throughout the product lifecycle.”
Overall, English asserts that CDMOs are playing “a crucial role” in addressing the challenges faced by pharmaceutical companies in outsourcing OSD manufacturing. He says, “By investing in advanced technologies, adopting integrated supply chain models, and offering specialized expertise, CDMOs are helping to ensure successful and efficient outsourcing partnerships.”
Looking to the future
According to these industry experts, trends set to shape the industry include advancement in drug delivery technologies, the increasing focus on personalized medicine, an emphasis on sustainability, and consolidation within the CDMO sector, but by far the most pertinent change-maker on everybody’s radar is the rise of AI.
According to Andrew Lewis, chief scientific officer, Quotient Sciences, “The FDA reported that in 2021, it saw more than 100 drug and biologic application submissions containing elements of AI or machine learning (ML) used in the development process.”
“The earliest applications of AI in the pharmaceutical industry were in drug discovery,” says Lewis. “Now, applications are being found in almost every function throughout development—from report writing and investigation of quality events, to manufacturing process control and facility management.”
“As with many other industries, the rise of AI is going to have a massive impact on OSD outsourcing in the immediate future,” adds Bora CDMO’s J.D. Mowery. “AI will be deployed for computer-based modelling of molecules, and to speed up development and reduce costs associated with developing at the bench and in manufacturing facilities. Embracing this technological shift will enable novel therapies to reach more patients who need them, faster.”
Almac’s Mark English predicts that the integration of digital technologies and automation in manufacturing processes will play a “crucial role” in the development of OSD outsourcing over the next five years.
“The adoption of Industry 4.0 principles, including the use of artificial intelligence, machine learning, and data analytics, will enhance the efficiency, quality, and scalability of OSD manufacturing. CDMOs that embrace these technologies will be better positioned to meet the evolving needs of their clients,” he says.
According to LGM Pharma’s Hamilton Lenox, “AI technologies, such as pharmacokinetic (PK) modeling, are expected to play an increasingly important role in optimizing OSD formulations.”
Lenox adds, “While AI-driven tools may not fully replace traditional approaches right away, their integration into early-stage formulation development will undoubtedly offer significant benefits in the future.” He believes that by continuously evaluating emerging technologies, CDMOs “can position themselves for a competitive advantage in an increasingly crowded market.”
Oral solid dosage forms continue to dominate the pharmaceutical market, but the field is rapidly evolving. Driven by personalized medicine and complex formulations, the OSD contract manufacturing market is growing, with CDMOs investing in advanced technologies like AI to meet demand. While challenges remain, the future of OSD manufacturing is promising, with innovation and collaboration leading to more efficient drug delivery.