Drug Discovery Market Size (2025 – 2030)

The Global Drug Discovery Market was valued at USD 60 billion in 2024 and will grow at a CAGR of 7.5% from 2025 to 2030. The market is expected to reach USD 86.14 billion by 2030.

The Drug Discovery Market focuses on the research and development process involved in identifying new pharmaceutical compounds that can be used to treat various diseases. This market is driven by technological advancements in drug development, increasing prevalence of chronic diseases, and rising investment in pharmaceutical research. The integration of artificial intelligence, high-throughput screening, and bioinformatics has significantly accelerated drug discovery, reducing costs and improving efficiency. The growing demand for personalized medicine and targeted therapies is further fueling market expansion, along with increasing collaborations between pharmaceutical companies, research institutions, and biotechnology firms.

Key Market Insights

The pharmaceutical industry invested over USD 200 billion in research and development in 2024, with a significant portion allocated to drug discovery, highlighting the increasing focus on innovation.

The adoption of artificial intelligence in drug discovery is expected to grow at a CAGR of 35% during the forecast period, enabling faster identification of potential drug candidates and reducing failure rates.

Small molecule drugs accounted for over 60% of the total market share in 2024, as they remain the dominant drug type due to their ease of administration, cost-effectiveness, and well-established manufacturing processes.

North America held the largest share of the drug discovery market in 2024, contributing approximately 45% of the total revenue due to strong pharmaceutical infrastructure, high investment in R&D, and a robust regulatory framework.

Biologics and targeted therapies are witnessing rapid growth, with monoclonal antibodies and gene therapies expected to account for more than 30% of newly approved drugs by 2030.

The increasing prevalence of chronic diseases, including cancer, cardiovascular diseases, and neurological disorders, is driving demand for innovative drug solutions, with oncology drugs alone contributing to over 25% of new drug approvals in recent years.

Strategic partnerships and collaborations between biotech firms and major pharmaceutical companies have surged by 20% annually, accelerating drug discovery through resource sharing, joint research, and co-development of novel therapeutics.

Regulatory approvals for new drug applications (NDAs) and biologics license applications (BLAs) have increased by 10% in the last five years, reflecting an improved drug development pipeline and a favorable regulatory environment.

Global Drug Discovery Market Drivers

Rising Prevalence of Chronic Diseases is driving market growth

The increasing burden of chronic diseases worldwide is a major driver of the drug discovery market. Conditions such as cancer, diabetes, cardiovascular diseases, and neurological disorders are becoming more prevalent due to factors such as aging populations, unhealthy lifestyles, and genetic predisposition. According to the World Health Organization, chronic diseases account for approximately 71% of global deaths annually. This alarming trend has heightened the need for new and effective therapeutics, pushing pharmaceutical companies and research institutions to focus on innovative drug discovery. The demand for targeted therapies and precision medicine has further intensified, leading to the development of biologics, gene therapies, and advanced treatment modalities. The rising prevalence of infectious diseases, including emerging viral threats, also plays a crucial role in market expansion, as companies invest in antiviral and vaccine research. Governments and healthcare organizations worldwide are supporting research initiatives by offering grants, tax incentives, and funding programs to accelerate drug discovery and development.

Technological Advancements in Drug Discovery is driving market growth

The integration of cutting-edge technologies such as artificial intelligence, machine learning, high-throughput screening, and bioinformatics has revolutionized the drug discovery process. AI-powered algorithms can analyze vast datasets to identify potential drug candidates, predict drug interactions, and optimize molecular structures. High-throughput screening enables the rapid testing of thousands of compounds, significantly reducing the time required to identify promising leads. Bioinformatics and computational modeling assist in understanding disease mechanisms and designing drugs with higher efficacy and lower side effects. These advancements not only enhance the efficiency of drug discovery but also reduce overall costs associated with research and development. Furthermore, the use of CRISPR gene-editing technology and organ-on-a-chip models has enabled researchers to develop more accurate disease models, facilitating the discovery of highly targeted therapeutics. The integration of cloud computing and big data analytics has further streamlined the drug discovery workflow, allowing for real-time collaboration and data sharing among global research teams.

Growing Investments and Collaborations in Drug Development is driving market growth

The pharmaceutical and biotechnology industries have witnessed a surge in investments and strategic collaborations aimed at accelerating drug discovery. Venture capital firms, government organizations, and private investors are increasingly funding biotech startups and research institutions focused on novel therapeutics. In recent years, pharmaceutical giants have also engaged in high-profile mergers and acquisitions to expand their drug discovery capabilities and pipeline portfolios. The trend of open innovation has led to increased partnerships between academic research centers, contract research organizations (CROs), and big pharma, fostering a collaborative approach to drug development. These collaborations enable access to specialized expertise, advanced technologies, and shared resources, ultimately expediting the process of bringing new drugs to market. The rise of decentralized clinical trials and digital health solutions has further enhanced the efficiency of drug discovery, allowing researchers to collect real-world data and improve drug efficacy studies.

Global Drug Discovery Market Challenges and Restraints

High Costs and Lengthy Drug Development Process is restricting market growth:
One of the major challenges in drug discovery is the high cost and lengthy timeline associated with bringing a new drug to market. On average, the drug development process takes 10 to 15 years and costs approximately USD 2.6 billion, including research, preclinical studies, clinical trials, and regulatory approvals. The stringent regulatory requirements imposed by health authorities such as the U.S. FDA and the European Medicines Agency further add to the complexity and expense of drug discovery. The high attrition rate of drug candidates during the clinical trial phase poses a significant financial risk to pharmaceutical companies, as only a small percentage of drugs successfully pass all phases of development. Additionally, the rising cost of clinical trials, driven by the need for larger patient pools and extensive safety evaluations, further strains resources and delays market entry.

Regulatory and Ethical Challenges in Drug Development is restricting market growth: The regulatory landscape for drug discovery is highly complex, with stringent requirements to ensure drug safety, efficacy, and quality. Regulatory bodies impose rigorous preclinical and clinical testing protocols, often leading to prolonged approval timelines. Compliance with Good Manufacturing Practices (GMP) and Good Laboratory Practices (GLP) adds another layer of complexity, requiring extensive documentation and validation processes. Ethical considerations, particularly in the case of gene editing, stem cell research, and human trials, present additional hurdles. Public scrutiny and regulatory restrictions on certain drug categories, such as opioids and psychedelic therapeutics, further limit market opportunities. Navigating the global regulatory environment, which varies across regions, poses a challenge for companies seeking international market expansion.

Market Opportunities

The drug discovery market presents significant opportunities driven by the growing focus on precision medicine, biologics, and digital health integration. The increasing adoption of AI and machine learning in drug discovery is expected to enhance efficiency, reducing development timelines and costs. Personalized medicine, which tailors treatments based on an individual's genetic profile, is gaining traction, particularly in oncology and rare diseases. The rise of cell and gene therapies, along with advancements in regenerative medicine, offers new avenues for innovation. Emerging markets, particularly in Asia-Pacific and Latin America, present lucrative opportunities due to expanding healthcare infrastructure, rising pharmaceutical investments, and increasing patient access to advanced therapies. The push for sustainable and eco-friendly drug manufacturing processes is also creating opportunities for green chemistry and biopharmaceutical innovations.

DRUG DISCOVERY MARKET REPORT COVERAGE:

Drug Discovery Market Segmentation - By Type

•  Small Molecule Drugs

•  Biologics

•  Natural Products

•  Biosimilars

•  Gene Therapy Drugs

Small molecule drugs dominate the drug discovery market due to their well-established development and manufacturing processes. They are widely used in various therapeutic areas, including oncology, infectious diseases, and metabolic disorders. Their oral bioavailability, ease of storage, and lower production costs make them the preferred choice for pharmaceutical companies.

Drug Discovery Market Segmentation - By Application

•  Oncology

• Neurology

•  Cardiovascular Diseases

•  Infectious Diseases

•  Immunology

• Rare Diseases

Oncology remains the most dominant segment due to the increasing prevalence of cancer and the continuous demand for novel targeted therapies. The rise of immuno-oncology, precision medicine, and combination therapies has further fueled drug discovery efforts in this area.

Drug Discovery Market Segmentation - By Region

• North America

• Asia-Pacific

• Europe

• South America

• Middle East and Africa

North America leads the drug discovery market, accounting for the largest share due to strong R&D infrastructure, high healthcare expenditure, and a well-established pharmaceutical industry. The presence of major biotech hubs, leading research institutions, and government support for drug development initiatives have contributed to the region’s dominance.

COVID-19 Impact Analysis on the Drug Discovery Market

The COVID-19 pandemic had a profound impact on the drug discovery market, accelerating innovation while also exposing challenges in traditional drug development processes. The urgent need for vaccines and treatments led to an unprecedented increase in research collaborations, funding, and regulatory fast-tracking. Pharmaceutical companies and research institutions rapidly adopted AI, machine learning, and cloud computing to expedite drug identification, repurposing, and clinical trials. mRNA technology, which played a crucial role in vaccine development, gained significant attention, paving the way for future applications in treating other diseases. However, the pandemic also disrupted ongoing drug discovery projects unrelated to COVID-19. Many clinical trials were delayed or halted due to restrictions on patient enrollment and site closures. Supply chain disruptions affected the availability of key raw materials, reagents, and laboratory equipment, slowing down R&D efforts. Small biotech firms faced financial challenges due to shifting investor focus toward COVID-related projects. Despite these setbacks, the pandemic highlighted the importance of global collaboration in drug discovery. Governments and regulatory agencies, including the FDA and EMA, introduced emergency use authorizations and streamlined approval processes, setting new precedents for drug development efficiency. The experience gained during the crisis is expected to influence future drug discovery strategies, promoting digital transformation, decentralized trials, and increased reliance on AI-driven drug design. Overall, COVID-19 acted as both a challenge and an opportunity, reshaping the market and accelerating innovation in ways that will impact drug discovery for years to come.

Latest Trends/Developments

The drug discovery market is undergoing a transformation driven by cutting-edge technologies, evolving research methodologies, and increased collaboration among pharmaceutical companies, biotech firms, and academic institutions. One of the most significant trends is the rise of AI and machine learning in drug discovery. These technologies are accelerating the identification of drug candidates, predicting molecular interactions, and optimizing clinical trial design, significantly reducing the time and cost of new drug development. AI-driven drug repurposing is also gaining traction, allowing researchers to find new therapeutic applications for existing drugs more efficiently. Another major trend is the increasing focus on personalized medicine and biologics. Advances in genomics and precision medicine are leading to more targeted therapies, particularly in oncology and rare diseases. Monoclonal antibodies, gene therapies, and RNA-based treatments (such as mRNA technology) are at the forefront of drug discovery, with pharmaceutical companies heavily investing in these areas. The success of mRNA vaccines during the COVID-19 pandemic has spurred interest in using this technology for infectious diseases, cancer, and autoimmune disorders. Collaborations and partnerships between pharmaceutical giants, biotech startups, and academic research centers are becoming more common. Companies are pooling resources to accelerate drug development, particularly in areas such as neurodegenerative diseases, immunotherapies, and antimicrobial resistance. Regulatory agencies are also playing a role by streamlining approval processes for breakthrough therapies. Lastly, the adoption of lab automation and digitalization is improving efficiency in preclinical and clinical research. Robotics, cloud computing, and blockchain technology are being integrated to enhance data security, improve research transparency, and facilitate better collaboration across the industry. These advancements, combined with evolving regulatory frameworks and increased funding, are shaping the future of drug discovery, making it more efficient and innovation-driven.

Key Players

1. Pfizer

2. Novartis

3. Merck & Co.

4. Roche

5. AstraZeneca

6. GSK

7.  Eli Lilly

8.  Sanofi

9. AbbVie

10. Bayer