Europe's €67 Billion CDMO Market: Why Pharma Is Rethinking Manufacturing

Pharmaceutical manufacturers are rethinking how and where they produce medicines. Rising demand for complex therapies, supply-chain pressures and major investments in new facilities are pushing companies towards hybrid manufacturing models.

Rather than choosing between in-house production and outsourcing, companies are deciding which capabilities to own, which to acquire and where specialist CDMO partnerships offer greater flexibility.

For European pharmaceutical companies, these decisions also raise questions about competitiveness, investment and access to technical expertise.

Manufacturing decisions are no longer driven primarily by cost. Companies must balance production capacity, supply security, specialist capabilities and the flexibility to respond to changing demand.

Several factors are influencing these decisions:

• Growing demand: GLP-1 medicines, biologics, peptides and advanced therapies require specialised manufacturing capabilities.

• Supply-chain resilience: Geopolitical uncertainty is encouraging companies to diversify production across regions.

• Capital requirements: Building sterile fill-finish, biologics and advanced-therapy facilities requires substantial investment and long development timelines.

• Technical complexity: Scaling production depends on experienced engineering, validation and manufacturing specialists.

• Intellectual property: Companies must decide which processes and technologies require direct control.

The result is a more selective investment strategy. Companies are building capacity where control is essential, acquiring established infrastructure and using CDMOs for specialist expertise and flexibility.

Europe remains a major pharmaceutical manufacturing centre, with established capabilities in active pharmaceutical ingredients (APIs), biologics, sterile fill-finish and advanced therapies.

Industry estimates place the European CDMO market at approximately €36 billion in 2025, with projected growth to €67 billion by 2034.

European manufacturers benefit from established infrastructure, specialist technical expertise and regulatory capabilities.

However, major U.S. investment programmes are increasing competition for pharmaceutical manufacturing projects.

Rather than treating Europe and the U.S. as competing locations, some companies are developing manufacturing networks across both regions to strengthen supply security and serve different markets.

Companies are investing in facilities where production control, long-term demand and specialist manufacturing capabilities justify the capital expenditure.

Major U.S. investments illustrate the scale of this strategy:

• Eli Lilly: Announced $27 billion in 2025 for four new U.S. manufacturing sites.

• Novartis: Committed $23 billion over five years to U.S. manufacturing and R&D infrastructure.

• Roche: Is expanding manufacturing through Genentech's Holly Springs facility in North Carolina, with an initial investment exceeding $700 million.

Europe is also attracting investment in specialised manufacturing:

• Bachem: More than CHF 500 million planned for peptide and oligonucleotide API manufacturing in Switzerland.

• Lonza: Approximately CHF 500 million invested in a commercial fill-finish facility in Stein, Switzerland.

• AGC Pharma Chemicals: More than €100 million invested in highly potent API manufacturing capacity in Barcelona.

• BSP Pharmaceuticals: A phased expansion in Latina, Italy, with an estimated €200 million first phase.

• SK pharmteco: Expanded commercial-scale API manufacturing capabilities in Swords, Ireland.

These investments suggest that companies are prioritising facilities supporting high-demand therapies, complex manufacturing processes and long-term supply requirements.

Acquisitions allow pharmaceutical manufacturers and CDMOs to secure established facilities, production capacity and experienced teams without building entirely new operations.

Recent transactions illustrate different approaches:

• Samsung Biologics: Completed its acquisition of GSK's Rockville, Maryland manufacturing facility on 31 March 2026, adding 60,000 litres of biologics drug-substance capacity and establishing its first U.S. manufacturing presence.
• Thermo Fisher Scientific: Completed its acquisition of Sanofi's Ridgefield, New Jersey facility on 2 September 2025. The agreement expands sterile fill-finish and packaging capacity while maintaining production of existing Sanofi therapies.
• Lonza: Completed its acquisition of Roche's Vacaville, California biologics facility on 1 October 2024, adding approximately 330,000 litres of bioreactor capacity. The transaction involved total consideration of $1.694 billion, according to Lonza's 2024 financial report.

For pharmaceutical companies, selling a facility to a CDMO can release capital while preserving manufacturing access through long-term agreements.

For CDMOs, acquisitions provide operational infrastructure, established processes and skilled workforces.

The strategic advantage depends on maintaining supply continuity and effective oversight after ownership changes.

CDMOs are increasingly supporting pharmaceutical companies with specialised manufacturing capabilities, additional capacity and access to technologies that would be expensive to develop internally.

Recent European investment programmes include:

• CordenPharma: More than €1 billion committed to peptide development and manufacturing expansion, including a new facility near Basel.

• Vetter: Approximately €480 million planned for the first phase of a manufacturing facility in Saarland, Germany.

• Hovione: Completed an initial $100 million U.S. investment programme, expanding spray-drying capabilities.

• Cambrex: Investing $30 million at its Milan facility to expand development, quality control and production capabilities.

For emerging biotechnology companies, outsourcing can provide access to clinical and commercial manufacturing without the expense of building facilities.

For established pharmaceutical manufacturers, CDMOs offer additional capacity, geographic diversification and access to specialist technologies.

However, outsourcing production does not remove responsibility for quality, regulatory compliance or supply continuity.

Whether companies build, acquire or outsource manufacturing, they need the technical expertise to establish, scale and manage production effectively.

The workforce implications extend beyond manufacturing operators to several specialist functions:

These capabilities are particularly important when transferring production between sites, commissioning new facilities or coordinating multiple external manufacturing partners.

Outsourcing may reduce the need for some internal production resources, but it can increase the importance of technical oversight, supplier management and process knowledge.

Successful outsourcing requires companies to retain control over critical manufacturing knowledge, quality standards and strategic decisions.

Key responsibilities include:

• Defining critical process parameters and manufacturing requirements.

• Maintaining oversight of quality agreements and regulatory compliance.

• Managing technology transfer and process documentation.

• Monitoring supplier performance and production capacity.

• Establishing contingency plans for supply disruptions.

Overdependence on a single manufacturing partner can create operational risks, particularly when production requires highly specialised facilities or technologies.

The objective is not necessarily to own every manufacturing asset, but to retain sufficient expertise and oversight to manage the network effectively.

The build, buy or outsource decision is becoming a question of strategic control rather than simply cost.

Pharmaceutical companies are investing in owned facilities where production scale and supply security justify it, acquiring established infrastructure to accelerate expansion and partnering with CDMOs for specialist capabilities.

For Europe, the opportunity lies in maintaining its position as a competitive manufacturing hub while responding to global investment, emerging technologies and changing production requirements.

For pharmaceutical and biotechnology organisations, manufacturing expansion depends on more than investment in facilities. It requires experienced specialists who can commission equipment, transfer processes, maintain quality and manage increasingly complex production networks.

Panda International supports European life sciences companies with permanent, contract and workforce solutions across engineering, validation, quality and technical operations.

As manufacturing models evolve, the companies best positioned to succeed will be those that combine the right production strategy with the technical capabilities needed to execute it. 

Explore our workforce solutions.