Healthcare Expenditure Surge Boosts Drug Discovery Market Emerges as a Core Driver of the Drug Discovery Market in 2025

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What Is the Expected CAGR for the Drug Discovery Market Through 2025?
The market size of drug discovery has significantly expanded in the past few years. Projections indicate that it will escalate from $110.26 billion in 2024 to $124.11 billion in 2025, experiencing a compound annual growth rate (CAGR) of 12.6%. The substantial growth in the past can be linked to the advancements in genomics and proteomics, the increasing occurrences of chronic diseases, and the emergence of biopharmaceuticals.

What's the Projected Size of the Global Drug Discovery Market by 2029?
The size of the drug discovery market is projected to experience a swift expansion in the following years, skyrocketing to a worth of $217.01 billion in 2029, with a compound annual growth rate (CAGR) of 15.0%. This anticipated growth within the forecast period is largely due to the adoption of precision medicine, emphasis on rare diseases, and the proliferation of personalized therapies. The forecast period will also witness major trends such as collaboration in drug discovery models, concentration on rare diseases and orphan drugs, incorporation of multi-omics data, growing use of organoids and 3D cell culture models, and significant advancements in virtual screening.

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Top Growth Drivers in the Drug Discovery Industry: What's Accelerating the Market?
The growth of the drug discovery market is anticipated to be fuelled by increased healthcare spending. Globally, countries are allocating a large portion of their GDP towards healthcare costs, encompassing hospital care, physician and clinical services, dental services, and other professional, health, and residential care services, home health care, nursing care facilities, prescription drugs, and continuing care retirement communities among others. Drug discovery plays a crucial role in healthcare expenditure as it is essential to disease treatment and life extension. There is a surging demand for new drugs to combat emerging diseases. For example, the Centers for Medicare and Medicaid Services, a federal agency based in the US, reported in October 2024 that national health expenditure had risen 4.1% to $4.5 trillion in 2022, or $13,493 per person. From 2023-32, average national health expenditure growth (5.6%) is expected to exceed average GDP growth (4.3%), leading to a rise in the healthcare spending share of GDP from 17.3% in 2022 to 19.7% in 2032. Consequently, the escalating healthcare expenses are boosting the expansion of the drug discovery market.

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Which Emerging Trends Are Transforming the Drug Discovery Market in 2025?
The progression of technology is a significant trend within the drug discovery market. Firms in this sector are leveraging novel technologies such as Artificial Intelligence and imaging technology to expedite the process of drug discovery. The latter facilitates the monitoring, characterization, and quantification of non-invasive biological interactions prompted by medication within organisms. Techniques utilizing the strengths of either probes or tissue are integral to comprehending diseases and developing fresh treatments. For example, in May 2023, Google Cloud introduced two fresh AI-empowered tools, the Target and Lead Identification Suite and the Multiomics Suite, with the aim to expedite drug discoveries and precision medicine. These tools are crafted to assist biotech and pharmaceutical brands in forwarding the drug discovery and precision medicine fields. The Target and Lead Identification Suite aids in recognizing the function of proteins and amino acids, and the Multiomics Suite speeds up the discovery and interpretation of genomic data, supporting the creation of precision treatments.

What Are the Main Segments in the Drug Discovery Market?
The drug discovery market covered in this report is segmented -

1) By Drug Type: Small Molecule, Large Molecule
2) By Process: Target Selection, Target Validation, Hit-To-Lead Identification, Lead Optimization, Candidate Validation
3) By Technology: High Throughput Screening, Spectroscopy, Combinatorial Chemistry, Biochips, Pharmacogenomics And Pharmacogenetics, Bioinformatics, Metabolomics, Nanotechnology, Other Technologies
4) By Therapeutic Area: Oncology, Neurology, Infectious And Immune System Diseases, Digestive System Diseases, Cardiovascular Diseases, Diabetes, Respiratory Disease, Other Therapeutic Areas
5) By End User: Pharmaceutical Companies, CROs, Other End-Users

Subsegments:
1) By Small Molecule: Synthetic Small Molecules, Natural Small Molecules, Targeted Small Molecule Drugs
2) By Large Molecule: Monoclonal Antibodies, Proteins And Peptides, Nucleic Acid-Based Therapies

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Which Top Companies are Driving Growth in the Drug Discovery Market?
Major companies operating in the drug discovery market include Pfizer Inc., Merck & Co. Inc., Novartis International AG, Thermo Fisher Scientific Inc., WuXi AppTec Group, GlaxoSmithKline plc, Eli Lilly and Company, Laboratory Corporation of America Holdings, Evotec SE, Eurofins Scientific SE, Agilent Technologies Inc., Sanofi S.A., Charles River Laboratories International Inc., Pharmaron Ltd., Viva Biotech Ltd., Albany Molecular Research Inc., Schrödinger Inc., BioDuro Ltd., Aptuit LLC, Selvita S.A., Sygnature Discovery Limited, Jubilant Biosys Limited, Gero Limited, Domainex Ltd., Verge Genomics lnc., Aqemia SAS, BenevolentAI Limited, EPIVAX INC., ProteinQure lnc., Synlogic Inc., ChemPartner Co. Ltd., WuXi Biologics lnc., Abzena plc, Lonza Group Ltd., Catalent lnc., Recursion Pharmaceuticals Inc.

Which Regions Will Dominate the Drug Discovery Market Through 2029?
North America was the largest region in the drug discovery market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the drug discovery market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

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