Veterinary CRO and CDMO Market Size Analysis:

The Veterinary CRO and CDMO Market Size was valued at USD 6.23 billion in 2023 and is expected to reach USD 13.3. billion by 2032, growing at a CAGR of 8.84% over the forecast period of 2024-2032.

The Veterinary CRO & CDMO Market Report. It explores regional differences and emerging health challenges, including that of animal disease incidence and prevalence rates. This report investigates veterinary drug development and clinical trials and the success rates and major therapeutic areas. It explores the nationwide trends in prescribing pharmaceuticals, biologics, and feed additives by region. The report also offers volumes of production and usage of veterinary drugs, indicating the penetration of the market and demand in the future. It includes a comprehensive breakdown of veterinary healthcare expenditures by government, insurance, and out-of-pocket expenditure. It examines regulatory approvals and compliance trends, identifying evolving requirements across leading markets. Increasing investments in animal healthcare are driving the Veterinary CRO and CDMO market, indicating that animal health is gaining importance. The United States is witnessing a steady increase in pet care expenditure, with spending amounting to USD 136.8 billion in 2022 alone, as per the American Pet Products Association (APPA), further augmenting the need for veterinary services.

Veterinary CRO and CDMO Market Dynamics

Drivers

• The growing global pet population and intensified livestock production are increasing the demand for veterinary medicines and vaccines, thereby driving the market for CRO and CDMO services.

The global market for Veterinary CRO & CDMO is majorly driven by the growing pet population worldwide and the rising livestock production. As of 2024, the total pet population globally is over 1 billion pets, with cats being the most owned pet. In particular, 52% of men own cats, while 48% of cat owners are women, and 47% of pet owners are first-time pet owners. Concurrently, livestock production has expanded significantly. For example, India's milk production under the 2023-24 period reached 239.30 million tonnes, making India the largest producer in the world and representing a 3.78% increase over the previous year. The growing adoption of pets and livestock production requires veterinary medicines and vaccines, which leads to the high demand for dedicated services provided by Veterinary CROs and CDMOs. These organizations are crucial in assisting pharmaceutical companies by delivering vet-tailored research, development, and manufacturing services. Growth in the pet population drives demand for new pet health solutions, while increasing livestock production makes vaccines and treatments even more critical to maintaining animal health and productivity. As a result, the Veterinary CRO and CDMO market is growing in response to the rising demand of these services by the companion animal and livestock owner. This trend underscores the critical role of these organizations in advancing veterinary healthcare and supporting the global food supply chain.

Restraints:

• High research and development costs, along with stringent regulatory challenges, act as significant restraints, particularly for smaller companies, limiting their ability to engage CRO and CDMO services.

The veterinary CRO and CDMO market faces challenges in the high R&D costs and stringent regulatory requirements from the government. Phase III clinical trials, which are critical for evaluating the effectiveness and safety of new veterinary drugs, are a particularly expensive undertaking, with single trials costing more than $100 million. These can be such jumping costs that smaller companies are discouraged from spending on creating new products, thus limiting progress in the industry.

Besides financial issues, the industry is required to operate in complex and shifting regulatory environments. An example is the European Medicines Agency (EMA), which operates under Regulation (EU) 2019/6 with very strict guidelines to follow regarding veterinary medicinal products. Tackling those varied sets of requirements increases approval times and costs, making it even more difficult for smaller companies to commercialize new products. In addition, the industry is being scrutinized for antimicrobial resistance (AMR). Non-therapeutic uses of antibiotics in animal agriculture, which are often coupled with prophylactic uses of veterinary antibiotics, are significant drivers of AMR, and regulators across the globe have responded by putting more severe controls in place, limiting the uses of antibiotics in animals. The need to have effective treatments available, alongside the necessity of minimizing AMR, has resulted in more stringent guidelines and increased surveillance.

Opportunities:

• The rising interest in personalized veterinary medicine offers CROs and CDMOs the chance to develop tailored treatments based on individual animal genetics and characteristics.

This growth in personalized veterinary medicine opens tremendous opportunities for CROs and CDMOs. It personalizes medicine for each animal based on genetic and health information, allowing more precise, powerful treatments. In 2023, US spending on pets was $147 billion, and $38.3 billion of that was for veterinary care, so we know Americans value their pets and their pets' health. This increasing expenditure highlights the need for premium and personalized medicine to fit the veterinary needs of the patients.

The rising costs of pet care, propelled by forces like private equity firms merging veterinary practices, caused prices of veterinary services to jump 6.2% from July 2023 to July 2024. Such trends highlight the growing demand for more effective and tailored treatment alternatives, and through personalized medicine, CROs and CDMOs can support in providing those solutions. Additionally, the fact that 91% of pet owners report feeling financially stressed because of escalating care costs suggests an opportunity for solutions that not only improve outcomes but also reduce lifetime costs. By concentrating on tailored treatments, CROs and CDMOs can mitigate these challenges, developing protocols that deliver both increased effectiveness and cost-effectiveness over time.

Challenges:

• Ethical concerns regarding animal testing and welfare present challenges, as balancing necessary research with ethical treatment raises debates and potential restrictions on certain testing practices.

Increasing levels of ethical scrutiny of existing animal use in veterinary research are driven by new data on the level of animal use, together with public sentiment. In a 2024 survey, 85% of Americans said animal experiments should be replaced with modern research. According to some recent estimates, about 200 million animals are used in medical research every year worldwide, indicating that large-scale animal testing exists. In the U.S., 2023 saw a 9% increase in procedures that cause unmitigated pain or distress to animals; 62,241 subjects were affected. Such statistics have sharpened ethical debates, resulting in calls for more stringent regulations and the use of alternative testing methods in veterinary research.

Veterinary CRO and CDMO Market Segmentation Analysis

By Animal Type

In 2023, the livestock animal segment accounted for the largest revenue share of 63% of the market. This dominance is ascribed to the rising requirement for veterinary pharmaceuticals and vaccines in large-scale farming systems. The livestock sector is one major contributor to agricultural GDP in various countries, as per government statistics. For example, the U.S. Department of Agriculture released figures showing that livestock, dairy, and poultry production made up a large share of U.S. agricultural production. Optimized veterinary products are required for livestock due to the high production pressure and high health standards for the animals, and livestock remains the primary target for CRO and CDMO service providers.

Government initiatives to improve food safety and animal welfare are also driving growth in livestock health solutions. Similarly, in the EU, a strategy for Animal Health is focusing on the prevention and control of diseases in livestock to enhance agricultural productivity, which is also anticipated to play an important role in the growth of veterinary CRO and CDMO market in the region.

By Service Type

The development segment accounted for the largest revenue share of over 31% in 2023. This is because veterinary therapeutics are becoming more complex, and novel drug development is needed. One trend supporting this scenario is government initiatives that support research and development in animal health, such as grants from the National Institutes of Health (NIH) that fund veterinary research. Others in the development sector benefit from government programs that foster cooperation between academia and industry to encourage innovation in veterinary medicine. Since the development component of the market is vital, these partnerships streamline and improve drug development processes. Demand for development services is also an important aspect of the veterinary drugs market, as most new veterinary drugs must meet tight regulatory guidelines around safety and efficacy. The U. S. Food and Drug Administration (FDA) and other governmental authorities set regulations that aid in the growth of the development segment.

By Application

In 2023, the medicine segment accounted for the largest share of the market. The market is dominated by the growing number of animal diseases, including zoonotic infections and cancer, that require the advancement of veterinary pharmaceuticals. Government reports emphasized the need for these health challenges to be tackled. For example, the Centers for Disease Control and Prevention (CDC) highlight the importance of effective treatments for zoonotic diseases, which are diseases that can be transmitted between animals and humans. Potential collaboration opportunities also exist through government initiatives to improve public health through improved animal health management and the demand for safe and effective veterinary medicines.

This segment in medicine also benefits from advancements in veterinary diagnostics, treatment technologies that enable animal owners to make decisions based on their pets' health, and is often supported by government funding for research and development. This support helps fuel innovative treatments in the veterinary medicine sector, which is what makes up the dominant segment.

Veterinary CRO and CDMO Market Regional Insights

In 2023, North America held the largest share of the market in the presence of robust animal health infrastructure and investment in veterinary services. The U.S. is a powerhouse for veterinary innovation and a point of significant government support for animal health initiatives. For example, the United States Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS), whose veterinary services are key programs that promote animal health and help the region maintain its leadership in the marketplace. The European market is spearheaded by well-developed animal welfare practices and strict regulation of compliance, driving the same interest for quality veterinary pharmaceuticals. Market drivers in this region include increasing pet ownership and rising awareness about animal health, which generate demand for new drugs, a collaboration between the European pharmaceutical industry and CRO/CDMO service providers, and technology innovation.

During the forecast period, the Asia Pacific region is expected to be the fastest growing region owing to rapidly growing demand for veterinary services and products in emerging countries such as China and India. The rapid development is also fostered by the use of government exercises in these countries to improve animal health infrastructure and encourage veterinary research. by offerings like advanced veterinary technologies, as illustrated by China's focus on better livestock health, India, whose initiatives to enhance animal health research have been a major growth factor for the market within the region. Collaborations between local firms and international players further spur growth in the Asia Pacific by enabling the adoption of advanced technologies and innovative solutions in veterinary healthcare.

Veterinary CRO and CDMO Market Key Players

• Charles River Laboratories

• Vetio

• LABIANA Group

• TriRx Pharmaceutical Services

• Aenova Group

• Oncovet Clinical Research (OCR)

• Argenta Group (KLIFOVET GmbH)

• Clinvet

• VETSPIN

• Knoell

• IDEXX Laboratories Inc.

• CZ Vaccines

• Kela Health

• Argenta Limited

• AB7 Group

• Labcorp Drug Development

• Zoetis Inc.

• Inotiv Inc.

• Jubilant Biosys

• Syneos Health Inc.

Recent Developments in the Veterinary CRO and CDMO Market

• In the April 2023 issue, the American Pet Products Association reported on the increasing ownership of cats and dogs by millennials and Gen Z, along with the enhanced desire to acquire sophisticated veterinary products and services.

• The U.S. Department of Agriculture reported on initiatives in January 2023 to improve animal health and increase disease surveillance and control measures, encouraging the further expansion of the veterinary CRO and CDMO market.