Saudi Arabia Contract Manufacturing Organizations (CMO) Market, By Type (Active Pharmaceutical Ingredients (API) Manufacturing, Finished Dosage Formulation (FDF) Development & Manufacturing, Secondary Packaging), By End User (Big Pharmaceuticals, Small and Mid-Size Pharmaceuticals, Generic Pharmaceutical Companies, Others), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

The Saudi Arabia Contract Manufacturing Organizations market was valued at USD 29.68 Million in 2024 and is expected to reach USD 48.80 Million by 2030 with a CAGR of 8.60%.

Contract Manufacturing Organisations (CMOs), often referred to as Contract Development and Manufacturing Organisations (CDMOs), are specialised companies that provide manufacturing and development services to other pharmaceutical, biotechnology, and life sciences companies on a contractual basis. CMOs are integral to the pharmaceutical and biotech industries, helping companies bring their products to market efficiently.

CMOs are primarily known for their manufacturing services and have facilities equipped to produce a wide range of products, including active pharmaceutical ingredients (APIs), finished dosage forms like tablets and injectables, biologics, and vaccines. They also offer contract development services, which involve assisting companies in the development and optimisation of drug formulations, manufacturing processes, and scale-up activities. Many CMOs in Saudi Arabia invest in advanced manufacturing technologies, collaborating with pharmaceutical companies to implement cutting-edge techniques.​

The expansion of the pharmaceutical and biotechnology sectors in Saudi Arabia, driven by Vision 2030, is increasing the demand for CMO services. Government initiatives and localization policies provide incentives for the CMO sector to help reduce the country's reliance on imports, which currently account for about 77% of pharmaceuticals. A push for self-sufficiency in manufacturing encourages investments in local CMO capabilities. This is exemplified by the Public Investment Fund's (PIF) launch of Lifera, a commercial-scale CDMO aimed at strengthening the local biopharmaceutical sector.​

CMOs offer specialized expertise, with companies like Boston Oncology investing $70 million to expand capacity for biologics and complex injectables. This attracts pharmaceutical companies seeking specific capabilities, such as the local insulin manufacturing partnership between SaudiBio and Novo Nordisk. With over 70 pharmaceutical manufacturing companies, including major players like SPIMACO and AJA Pharma, CMOs in Saudi Arabia can serve as a gateway to regional and international markets, enhancing the country's position as a global pharmaceutical manufacturing hub.

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Key Market Drivers

Vision 2030 and Government Initiatives

Saudi Arabia’s Vision 2030, the nation’s landmark development blueprint, is a major driver of growth for the Contract Manufacturing Organization (CMO) market. Aimed at diversifying the economy and reducing dependence on oil revenues, Vision 2030 emphasizes healthcare and pharmaceuticals as core pillars of non-oil sector expansion. The government’s localization policies require multinational pharmaceutical firms to establish local production or partner with domestic CMOs, significantly boosting demand for contract manufacturing services. These partnerships enable foreign companies to enter the Saudi market efficiently while minimizing capital investment.

Vision 2030 also underscores the broader goal of developing local capabilities across the pharmaceutical value chain from drug formulation to large-scale production. To achieve this, the government has supported pharmaceutical industrial clusters in Sudair, Yanbu, and Jazan, provided grants for facility upgrades, and encouraged technology transfer agreements that allow local CMOs to master complex manufacturing processes such as biologics and injectables. These initiatives strengthen domestic CMOs, positioning them as globally competitive partners.

In parallel, Saudi Arabia is advancing its economic diversification through major resource-based investments. Recent exploration licenses covering 4,788 sq. km in the Jabal Sayid and Al-Hajjlah regions have attracted commitments of SAR 366 million (USD 97.6 million) in mineral exploration. In 2024, the Kingdom revised its estimated untapped mineral wealth to USD 2.5 trillion, up from USD 1.3 trillion in 2016, reflecting improved geological insights and the growing importance of mining as an economic pillar.

Together, these efforts highlight Vision 2030’s holistic approach, leveraging industrial growth, localization, and innovation to establish Saudi Arabia as a regional leader in pharmaceutical manufacturing and CMO services.

Rising Healthcare Expenditure

The steady rise in healthcare expenditure by the Saudi Arabian government is a major catalyst for the expansion of the Contract Manufacturing Organization (CMO) sector. Increased spending is reshaping the healthcare landscape, fostering pharmaceutical outsourcing and third-party manufacturing. Under its ambitious privatization strategy, the Ministry of Health (MOH) plans to transfer operations of 290 public hospitals and 2,300 healthcare centers to the private sector, aiming to raise private participation in healthcare from 40% to 65%.

Saudi Arabia continues to dedicate a growing share of its national budget to healthcare, enhancing infrastructure, expanding hospitals and clinics, improving access to pharmaceuticals, and promoting local drug manufacturing to reduce import dependence. The Kingdom also aims to capture a share of the Middle East’s US$100 billion medical tourism market through a two-pronged approach: investing in premium healthcare facilities and developing luxury medical wellness destinations such as Clinique La Prairie, blending advanced treatment with hospitality excellence.

With 82.1% of the population living in urban areas, demand for pharmaceuticals is rising sharply in metropolitan centers where healthcare infrastructure is rapidly expanding. Meanwhile, improved access in rural regions creates new opportunities for pharmaceutical companies and CMOs to strengthen distribution networks and ensure nationwide supply.

As demand outpaces local production capacity, outsourcing to CMOs offers a scalable, cost-effective solution. Rising healthcare costs have further increased pressure on both government and private players to control expenses without compromising quality. CMOs enable: reduced capital investment in manufacturing, lower production risks, and enhanced flexibility, allowing pharmaceutical companies to focus on innovation, R&D, and market expansion.

Through their specialized expertise and economies of scale, CMOs play a vital role in supporting Saudi Arabia’s evolving healthcare ecosystem and advancing its sustainability and efficiency goals..

Key Market Challenges

Skilled Workforce

The pharmaceutical and biotechnology manufacturing processes often require specialized knowledge and expertise in areas such as bioprocessing, sterile manufacturing, and advanced pharmaceutical technologies. Finding professionals with this specific skill set can be challenging. The number of professionals with experience in pharmaceutical and biotech manufacturing may be limited in Saudi Arabia. Many individuals with such expertise may need to be recruited from outside the country. The demand for skilled professionals in the pharmaceutical and biotechnology sectors can lead to intense competition for talent.

CMOs may need to offer competitive compensation packages and incentives to attract and retain qualified employees. Ensuring compliance with stringent regulatory requirements is essential in pharmaceutical manufacturing. This requires a workforce with a deep understanding of regulatory standards, which may be in short supply. Maintaining high standards of quality control and quality assurance is fundamental in pharmaceutical manufacturing. CMOs need professionals with the skills to implement and manage robust quality systems. The pharmaceutical and biotech industries are constantly evolving with new technologies and regulatory changes. CMOs must invest in ongoing training and development to keep their workforce up to date with the latest industry developments.

In some cases, CMOs may need to bring in skilled professionals from other countries to fill gaps in the local talent pool. This can add complexity to the recruitment process and require addressing immigration and work permit issues. Ensuring a pipeline of skilled professionals for the future requires cooperation between CMOs and educational institutions. Collaborative efforts can help develop programs that equip students with the necessary skills.

Price Pressures

The CMO market is highly competitive, with numerous providers vying for contracts. This competition can put downward pressure on prices as CMOs seek to attract and retain clients. Pharmaceutical companies, including those in Saudi Arabia, are under pressure to contain costs to remain competitive and deliver affordable healthcare products. They may negotiate aggressively with CMOs to secure lower manufacturing costs. The pharmaceutical industry demands high-quality standards and strict regulatory compliance. Maintaining quality while managing costs can be a delicate balance for CMOs. CMOs often seek to achieve economies of scale to reduce production costs. However, achieving these efficiencies can take time and investment.

The push for greater transparency in pricing, including in drug pricing, can influence contract negotiations and lead to more price pressures. In contract negotiations, pharmaceutical companies with substantial production volumes may have more negotiating power, allowing them to seek favorable terms, including pricing. Pharmaceutical companies may pressure CMOs to optimize supply chains, reduce waste, and enhance efficiency to drive down costs. Fluctuations in the prices of raw materials and other production inputs can impact CMOs' production costs and profitability. Evolving regulatory requirements may necessitate adjustments in manufacturing processes and quality control, potentially increasing costs for CMOs.

Key Market Trends

Increasing Outsourcing

Pharmaceutical companies are increasingly focusing on their core competencies, such as research and development and marketing, while outsourcing manufacturing and production to Contract Manufacturing Organizations (CMOs). This allows them to allocate more resources to innovation and growth. Outsourcing manufacturing to CMOs can often be more cost-effective than maintaining in-house production facilities, with some estimates suggesting potential cost reductions of up to 30%. CMOs can achieve economies of scale and operational efficiencies, leading to cost savings for pharmaceutical companies in Saudi Arabia.​

CMOs often specialize in areas, such as biopharmaceuticals, sterile manufacturing, or complex formulations. Pharmaceutical companies can leverage the specialized expertise of CMOs to meet specific manufacturing requirements and address the needs of a population where chronic diseases like diabetes are prevalent. CMOs offer the capacity and scalability that pharmaceutical companies may require, helping adjust production volumes to meet fluctuating demand and scale up manufacturing for product launches and clinical trials.​

CMOs have experience in navigating complex regulatory requirements. They maintain quality systems and regulatory expertise, ensuring that products are manufactured in compliance with the stringent standards of the Saudi Food and Drug Authority (SFDA), which aligns with international bodies like ICH and PIC/S. This includes managing the national Track & Trace system (RSD) for serialization, which helps combat counterfeit drugs. Outsourcing to CMOs can help pharmaceutical companies mitigate risks associated with production and supply chain disruptions, which is crucial in a country that imports about 77% of its pharmaceutical products. CMOs can often provide redundancy and contingency planning.​

Pharmaceutical companies can benefit from the flexibility provided by CMOs. They can adapt manufacturing processes, change production volumes, and explore new product lines more easily through outsourcing.​

Segmental Insights

Type Insights

Based on the category of Type, Active Pharmaceutical Ingredients (API) Manufacturing segment emerged as the fastest growing segment in the Saudi Arabia Contract Manufacturing Organizations Market in 2024. The production of active pharmaceutical ingredients is a critical component of the pharmaceutical supply chain. The Saudi Arabian pharmaceutical market has a growing demand for APIs to support the manufacturing of various pharmaceutical products, including finished dosage forms such as tablets, capsules, and injectables.

The local pharmaceutical industry in Saudi Arabia has been expanding, with a focus on manufacturing finished pharmaceutical products. To meet this demand, CMOs specializing in API manufacturing play a vital role in providing the necessary raw materials. CMOs with expertise in API manufacturing offer customized solutions for pharmaceutical companies, enabling them to source specific APIs tailored to their product requirements. This customization is especially important for pharmaceutical companies that need unique or specialized APIs. API manufacturing is subject to stringent regulatory requirements to ensure quality, safety, and efficacy.

CMOs specializing in API production are well-equipped to meet these regulatory standards, which is crucial for pharmaceutical manufacturers in Saudi Arabia. API manufacturing often represents a significant portion of the total cost of pharmaceutical production. CMOs that specialize in API manufacturing can achieve economies of scale, cost-efficiency, and quality control measures, which benefit pharmaceutical manufacturers. Pharmaceutical companies in Saudi Arabia and other regions aim to reduce their dependency on imports for APIs. Investing in domestic API manufacturing capabilities through CMOs enhances the country's pharmaceutical self-sufficiency and reduces reliance on international suppliers. These factors are expected to drive the growth of this segment.

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Regional Insights

Northern & Central emerged as the largest market in the Saudi Arabia Contract Manufacturing Organizations Market in 2024, holding the largest market share in terms of value. The Northern and Central regions of Saudi Arabia, particularly the capital city Riyadh in the Central region, boast well-developed infrastructure and excellent connectivity. This makes them attractive locations for CMOs, as they can efficiently transport materials and products to and from these areas. These regions provide access to critical facilities, including transportation hubs, research institutions, and regulatory agencies, which are vital for the pharmaceutical and biotech industry. Proximity to these resources facilitates efficient operations. Riyadh, in the Central region, is the economic and financial center of Saudi Arabia. It's also home to many corporate headquarters and government offices.

This concentration of economic activity creates a favorable environment for CMOs seeking business partnerships and government support. The presence of research and innovation centers, universities, and scientific institutions in these regions promotes collaboration and the development of cutting-edge pharmaceutical products and processes, which can benefit CMOs. Regulatory agencies often have a significant presence in capital cities and major economic centers. Being situated in these regions can help CMOs maintain close regulatory compliance and access timely updates on industry standards. The Northern and Central regions tend to have a relatively higher concentration of a skilled and educated workforce. This is particularly important for the pharmaceutical and biotech industry, which relies on highly specialized professionals.

Recent Developments

• In May 2025, MS Pharma inaugurated the first biologics manufacturing facility in Saudi Arabia. This facility is a landmark achievement for the nation's pharmaceutical sector, aimed at strengthening local manufacturing, reducing reliance on imports, and ensuring sustainable access to advanced therapies.
• In December 2024, Saudi Arabia is accelerating its push to become a regional powerhouse in pharmaceutical manufacturing, biomanufacturing, and R&D, as it prepares to host the inaugural CPHI Middle East at the Riyadh Front Exhibition & Convention Centre from 10-12 December 2024. The event is expected to attract over 30,000 pharmaceutical professionals, industry executives, and global decision-makers, marking a pivotal moment in the Kingdom’s industrial transformation. Industry leaders view the launch of CPHI Middle East in Riyadh as a strategic inflection point, reinforcing efforts to establish a competitive domestic manufacturing base and position Saudi Arabia as a central hub for pharmaceutical innovation and supply within the broader Middle East region. 

Key Market Players

• Saudi Arabian Japanese Pharmaceutical Company (SAJAPHCO)
• AJA Pharmaceutical Industries Company LTD
• Saudi Pharmaceutical Industries & Medical Appliances Corporation (SPIMACO)
• Jamjoom Pharmaceuticals Co.
• Banjara Holdings
• Batterjee Pharmaceutical

Report Scope:

In this report, the Saudi Arabia Contract Manufacturing Organizations Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Saudi Arabia Contract Manufacturing Organizations Market, By Type:

o   Active Pharmaceutical Ingredients (API) Manufacturing

o   Finished Dosage Formulation (FDF) Development & Manufacturing

o   Secondary Packaging

• Saudi Arabia Contract Manufacturing Organizations Market, By End User:

o   Big Pharmaceuticals

o   Small and Mid-Size Pharmaceuticals

o   Generic Pharmaceutical Companies

o   Others

• Saudi Arabia Contract Manufacturing Organizations Market, By Region:

o   Eastern

o   Western

o   Northern & Central

o   Southern

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Saudi Arabia Contract Manufacturing Organizations Market.

Available Customizations:

 Saudi Arabia Contract Manufacturing Organizations market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).