State of pricing 2024: What lies ahead for the CDMO industry?

| min read
CDMO industry 2024 outlook

Innovation and customer-centricity are central to CDMO success in 2024. Want to know what the future of pricing in the industry looks like? Read highlights from our ‘State of Pricing 2024’ report to uncover CDMO industry challenges and opportunities to aid your business growth. 

The outlook for the contract development and manufacturing organization (CDMO) industry in 2024 is characterized by a mix of resilience and cautious optimism. Our latest report, 'State of Pricing 2024', offers an overview of the industry’s current state and future projections for the year.

While price increases have been a focal point since 2022, results have largely fallen short of targets. However, a cautious sense of optimism prevails. Looking ahead, CDMOs are adjusting their approach to price pressure by proactively addressing customer value perception and extracting value of offerings while still aligning with industry benchmarks.  

Let’s dive into key takeaways from the report. 

Rising prices, shifting dynamics

Approximately 80 percent of CDMOs have implemented price increases since 2022, adjusting their prices by up to 20 percent. These price adjustments primarily aim to control costs (25 percent), maximize value of new offerings (18 percent), and leverage market demand (18 percent).  



However, despite concerted efforts, recent price increases failed to achieve less than half of the intended targets. This shortfall underscores the importance of effectively communicating value proposition and addressing customer resistance.  

Optimism amidst challenges

68 percent of CDMOs expect a more favorable economic climate for 2024 compared to last year. Key commercial priorities for management this year include refining pricing strategies and expanding business through innovative services and new markets. 



Interestingly, the perception of price increases as the ultimate profitability driver has shifted. Now, only 30 percent of CDMOs rely on price hikes to drive future profit growth, signaling a broader consideration of alternative avenues for profit generation. Out of this group, around 50 percent plan to raise prices in line with inflation (35 percent) or higher than inflation (13 percent). 

Price pressures and barriers to future growth

The CDMO industry is anticipated to reconsider strategies in response to rising price pressures, as they aim to navigate challenges without resorting to price hikes. Our report states that 61 percent of CDMOs are facing higher price pressure, pushing them to lower prices, give more discounts and rebates, and extend promotional offers.

Overcoming this challenge requires a proactive approach. Most CDMOs consider these the best approaches to reduce price pressure:

  • Change customers’ perception of value and price
  • Reduce variable of fixed costs
  • Improve value communication
  • Improve negotiation skills of salesforce
  • Introduce new, innovative products
  • Adopt innovative pricing models 



Apart from pricing pressure, CDMOs face other barriers to future revenue growth. Our research shows more than half of companies struggle with growth due to a lack of new products and segment prioritization challenges. 


top 5 limitations for revenue growth


How can CDMOs overcome these challenges? The answer lies in addressing these limitations with a strategic focus on innovation, market segmentation, and customer-centric approaches.  

Refining strategies to understand pricing and innovation challenges is critical to stay competitive. And at Simon-Kucher, pricing and strategy excellence are at the core of what we do.  

Pioneering pricing excellence in the CDMO industry 2024

In 2024, most CDMOs are fine-tuning their approach to pricing to drive differentiation and foster value creation. And they are doing this through increased focus on two core areas – pricing and contracting.

Better pricing strategies for long-term growth

Improved pricing strategies help businesses stay ahead of the competition and achieve long-term success. When pricing strategies are accurate and value driven, they increase profitability as they align with customer value perception and enable you to systematically extract the full value of the offering.  

And what does improved pricing entail?

  • Accuracy: Match your prices with client willingness to pay through understanding key value drivers for each offer.  
  • Consistency: Establish a standardized internal perspective on pricing strategy and develop a solid understanding of cost base.
  • Simplicity: Develop simple, systematic procedures that incorporate internal and external value factors through infrastructure and scalable processes.



Mirroring issues in revenue growth, 58 percent of CDMOs believe segmentation challenges to be the crucial pricing change needed for future improvement.

Other key pricing changes to explore in 2024 are the development of new pricing tools and models. Companies are also focusing on developing surcharges and monetized services, modifying negotiation strategies, and reviewing price positioning and pricing clauses in contracts/proposals.

Changes to expect in contracting ahead 

CDMOs are also seeking to modify contracts in order to maintain competitiveness and maximize revenue growth. The top three contract modification priorities are adding more indices, extending contract durations, and ensuring adaptability to shifting market requirements. 



According to our study results, close to 70 percent agree that contracts should incorporate more indices in the future. Additional metrics provide a more comprehensive understanding of market conditions and performance that influence pricing and contract terms.

Moreover, there is a widespread acknowledgment of the importance of clearly defined roles and responsibilities, with direct CEO involvement in shaping pricing strategies seen as essential for achieving pricing excellence.

How we can help

It is clear that the path to success for CDMOs in 2024 lies in navigating price pressures, fostering innovation, and adopting customer-centric pricing strategies.  

If you’re wondering what that means for your business or if you would like to discuss the study results in more detail, then reach out to us today. We can help you build actionable growth strategies – introduce innovation in core aspects of your business, improve value communication, etc. – and produce tangible results. 

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Our experts are always happy to discuss your issue. Reach out, and we’ll connect you with a member of our team.