U.S. Small Molecule Drug Discovery Outsourcing Market Size, Share, Trends, Industry Analysis Report

Overview

The U.S. small molecule drug discovery outsourcing market size was valued at USD 1.49 billion in 2024, growing at a CAGR of 9.48% from 2025 to 2034. Key factors driving demand for the small molecule drug discovery outsourcing in the U.S. include growing healthcare spending, rising prevalence of chronic diseases, and increasing geriatric population.

Key Insights

• The lead identification & candidate optimization segment accounted for a major revenue share in 2024 due to ongoing focus on early-stage compound discovery for cancer treatment.
• The chemistry segment dominated the revenue share in 2024 due to growing demand for synthetic chemistry in the early stages of drug discovery.
• The oncology segment held the largest revenue share in 2024 due to the urgent demand for targeted and personalized therapies to treat cancer.
• The pharmaceutical & biotechnology companies segment accounted for a major revenue share in 2024 due to their growing dependence on CROs to streamline drug discovery.

Industry Dynamics

• The rising prevalence of chronic diseases is increasing the demand for small molecule drug discovery outsourcing as pharmaceutical companies seek cost-effective solutions to develop new therapies.
• The increasing geriatric population is driving the demand for small molecule drug discovery outsourcing by increasing pressure on healthcare systems to deliver effective treatments quickly.
• The loss of direct control over critical processes hampers the market growth by discouraging pharma companies from choosing outsourcing for small molecule drug discovery.
• The rising investments in cancer research are expected to create a lucrative market opportunity during the forecast period.

Market Statistics

• 2024 Market Size: USD 1.49 Billion
• 2034 Projected Market Size: USD 3.68 Billion
• CAGR (2025–2034): 9.48%

AI Impact on U.S. Small Molecule Drug Discovery Outsourcing Market

• Pharmaceutical and biotechnology companies, and academic organizations prefer AI-enabled contract research organizations (CROs) as they enable access to innovative platforms such as AI-driven drug design and high-throughput screening through next-generation sequencing.
• AI tools are integrated across end-to-end outsourcing workflows, enabling predictive modeling, efficient synthesis planning, and virtual screening.
• The AI integration enhances efficiency in discovering novel therapeutics for cancer, infectious diseases, metabolic disorders, and other diseases. It reduces time and costs, improves precision, and strengthens collaboration between pharmaceutical companies and CROs, ultimately boosting productivity across outsourced discovery workflows.

Small molecule drug discovery outsourcing refers to the practice where pharmaceutical and biotechnology companies delegate specific stages of the small molecule drug discovery process to external contract research organizations (CROs). This approach allows companies to access specialized expertise, reduce costs, and accelerate timelines across various stages such as target identification, hit-to-lead optimization, preclinical studies, and toxicology assessments. Outsourcing supports innovation by enabling firms to focus internal resources on core competencies such as strategic planning and commercialization. This model fosters flexibility and facilitates access to advanced technologies and global talent pools, making it a crucial component in modern drug development pipelines.

In the U.S., the preference for small molecule drug discovery outsourcing is growing rapidly due to the country’s robust pharmaceutical ecosystem, advanced research infrastructure, and presence of leading CROs. The U.S. market benefits from high R&D spending, a strong innovation pipeline, and the increasing trend among both large and small pharmaceutical companies to reduce fixed costs by outsourcing non-core functions. Factors such as the availability of skilled scientists, regulatory expertise, and integration of artificial intelligence and high-throughput screening technologies are further fueling the adoption of small molecule drug discovery outsourcing. Moreover, the growing demand for personalized medicine and the rising prevalence of chronic diseases are intensifying the need for efficient drug discovery services.

The U.S. small molecule drug discovery outsourcing market demand is driven by the growing healthcare spending. American Medical Association, in its findings, stated that health spending in the U.S. increased by 7.5% in 2023 from 2022. This is encouraging private payers in the country to invest more in healthcare infrastructure and drug development, which is fueling the need for faster and cost-effective drug discovery solutions. This is driving the demand for small molecule drug discovery outsourcing to access specialized expertise, advanced technologies, and global talent without overburdening internal resources. Consequently, rising healthcare expenditure is strengthening partnerships between sponsors and contract research organizations (CROs), boosting outsourcing demand across the drug discovery value chain.

Drivers and Opportunities

Rising Prevalence of Chronic Diseases: The rising prevalence of chronic diseases is increasing the demand for small molecule drug discovery outsourcing in the U.S. as pharmaceutical companies seek faster, cost-effective solutions to develop new therapies. Growing patient populations with conditions such as diabetes, cardiovascular diseases, and cancer are pushing drug developers to accelerate research, prompting them to leverage specialized contract research organizations (CROs) for their expertise and advanced technologies. Outsourcing allows pharma firms to reduce development timelines, access advanced methodologies, and focus on core competencies while meeting urgent market needs. The Centers for Disease Control and Prevention (CDC), in its 2024 report, estimated 129 million people in the U.S. have at least one major chronic disease. Therefore, as the prevalence of chronic diseases rises, the demand for small molecule drug discovery outsourcing in the U.S. also expands.  

Increasing Geriatric Population: Older adults are prone to chronic and complex diseases, such as cancer, diabetes, and cardiovascular conditions, which require targeted therapies. This is driving pharmaceutical companies to accelerate drug development. Internal R&D often faces high costs and resource limitations. Outsourcing to specialized contract research organizations (CROs) allows these firms to access advanced technologies, expertise, and cost-efficient solutions, speeding up the discovery of small molecule drugs. Additionally, the aging population is putting increasing pressure on healthcare systems to deliver effective treatments quickly, boosting reliance on outsourcing partners to enhance productivity and innovation in drug development. The number of Americans ages 65 and above is projected to increase from 58 million in 2022 to 82 million by 2050. Hence, the demand for small molecule drug discovery outsourcing is rising with the growing geriatric population.

Segmental Insights

Workflow Analysis

Based on workflow, the U.S. small molecule drug discovery outsourcing market segmentation includes target identification & screening, target validation & functional informatics, lead identification & candidate optimization, preclinical development, and others. The lead identification & candidate optimization segment accounted for a major revenue share in 2024 due to increasing reliance of pharmaceutical and biotechnology companies on external partners for early-stage compound discovery. Companies prioritized this stage to accelerate the detection of high-potential small molecules using advanced high-throughput screening (HTS) platforms and AI-enabled tools. Outsourcing identification and screening significantly reduced costs and timelines associated with in-house infrastructure, while providing access to a broader compound library and specialized expertise. Additionally, rising R&D investments and the urgency to streamline early drug discovery processes due to increasing clinical failures pushed firms to collaborate with contract research organizations (CROs) during this critical phase.

Service Analysis

In terms of service, the segmentation includes chemistry services and biology services. The chemistry services segment dominated the revenue share in 2024 due to high demand for medicinal and synthetic chemistry in the early stages of drug discovery. Pharmaceutical and biotech companies increasingly partnered with contract research organizations (CROs) to access advanced chemical synthesis capabilities, scalable compound libraries, and expertise in structure-activity relationship (SAR) studies. The rising complexity of small molecules and the growing pressure to accelerate time-to-market further encouraged firms to outsource labor-intensive and resource-demanding chemistry workflows. Additionally, the expansion of covalent drug discovery approaches highlighted the need for specialized chemical optimization services, reinforcing the dominance of the segment.

Therapeutic Area Analysis

In terms of therapeutic area, the U.S. small molecule drug discovery outsourcing market segmentation includes respiratory system, pain and anesthesia, oncology, ophthalmology, hematology, cardiovascular, endocrine, gastrointestinal, immunomodulation, anti-infective, central nervous system, dermatology, and genitourinary system. The oncology segment held the largest revenue share in 2024 due to the high prevalence of cancer and the urgent demand for targeted and personalized therapies. The increasing complexity of cancer biology and the shift toward precision medicine prompted pharmaceutical and biotech firms to outsource discovery processes to specialized CROs with expertise in cancer biology, biomarker-driven screening, and tumor-specific models. Additionally, oncology projects often require longer and more resource-intensive R&D timelines, making external partnerships a strategic move to reduce development costs and enhance efficiency.

The central nervous system segment is expected to grow at a robust pace during the forecast period owing to the growing investments in the development of treatments for neurodegenerative diseases, psychiatric disorders, and epilepsy. The aging population and the rising incidence of conditions such as Alzheimer's, Parkinson's, and multiple sclerosis have highlighted the urgency for effective CNS drugs. However, CNS drug discovery presents substantial challenges, including blood-brain barrier penetration, target validation, and high clinical attrition rates. To address these issues, companies increasingly rely on CROs with advanced capabilities in CNS pharmacology, electrophysiology, and in vivo models. The complexity of CNS disorders and the need for multidisciplinary approaches are set to drive significant outsourcing activity in this therapeutic area.

End Use Analysis

In terms of end use, the segmentation includes pharmaceutical & biotechnology companies and academic institutes. The pharmaceutical & biotechnology companies segment accounted for a major revenue share in 2024 due to their growing dependence on contract research organizations to streamline discovery pipelines and reduce operational burdens. These companies faced increasing pressure to deliver innovative therapies faster while managing rising R&D costs and regulatory complexities, which encouraged them to outsource drug discovery services. The surge in strategic partnerships and licensing agreements also contributed to the dominance of the segment, as firms aimed to diversify their pipelines and explore novel small molecule targets across therapeutic areas such as oncology and CNS disorders.

The academic institutes segment is expected to grow at the fastest pace in the coming years, driven by the rising federal and private funding for early-stage research, which encourages these institutes to collaborate with CROs for high-throughput screening, target validation, and preclinical testing. Additionally, academic labs increasingly focus on rare and orphan diseases, areas often overlooked by larger pharmaceutical firms, creating new outsourcing opportunities.

Key Players & Competitive Analysis

The U.S. small molecule drug discovery outsourcing market is highly competitive, with the presence of key players such as Charles River Laboratories, LabCorp, and Syngene International. These companies offer integrated services spanning target identification, hit-to-lead optimization, and preclinical development, leveraging advanced technologies such as AI-driven drug design and high-throughput screening. Competition is driven by expertise, cost efficiency, and speed-to-market, with mid-sized CROs challenging larger firms through niche specializations. U.S.-based CROs face growing pressure from Asian competitors such as WuXi and Syngene, which provide cost advantages without compromising quality. Partnerships with biotech and pharma firms are critical, as clients increasingly prefer end-to-end solutions. Emerging trends include a focus on complex targets and sustainable chemistry.

A few major companies operating in the U.S. small molecule drug discovery outsourcing market include Charles River Laboratories; Curia Global, Inc.; Eurofins Scientific; Evotec; GenScript Biotech; Labcorp; Merck & Co., Inc.; Oncodesign; Pharmaron; and Syngene International.

Key Companies

• Charles River Laboratories
• Curia Global, Inc.
• Eurofins Scientific
• Evotec
• GenScript Biotech
• Labcorp
• Merck & Co., Inc.
• Oncodesign
• Pharmaron
• Syngene International

U.S. Small Molecule Drug Discovery Outsourcing Industry Developments

In May 2025, Peptone announced a strategic partnership with Evotec to accelerate and scale the creation of small molecule therapeutics targeting intrinsically disordered proteins (IDPs) across diverse therapeutic areas.

U.S. Small Molecule Drug Discovery Outsourcing Market Segmentation

By Workflow Outlook (Revenue, USD Billion, 2020–2034)

• Target Identification & Screening
• Target Validation & Functional Informatics
• Lead Identification & Candidate Optimization
• Preclinical Development
• Others

By Service Outlook (Revenue, USD Billion, 2020–2034)

• Chemistry Services
• Biology Services

By Therapeutic Area Outlook (Revenue, USD Billion, 2020–2034)

• Respiratory System
• Pain and Anesthesia
• Oncology
• Ophthalmology
• Hematology
• Cardiovascular
• Endocrine
• Gastrointestinal
• Immunomodulation
• Anti-infective
• Central Nervous System
• Dermatology
• Genitourinary System

By End Use Outlook (Revenue, USD Billion, 2020–2034)

• Pharmaceutical & Biotechnology Companies
• Academic Institutes

U.S. Small Molecule Drug Discovery Outsourcing Market Report Scope