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October 2025
The AI-Based pharmaceutical R&D services market is experiencing significant expansion, with projections indicating a revenue increase reaching several hundred million dollars by the end of the forecast period, spanning 2025 to 2034. This growth is driven by emerging trends and strong demand across key sectors.
The ability to use human knowledge to solve difficult problems quickly has made artificial intelligence (AI) a potent tool. Significant developments in machine learning and AI technology provide a game-changing prospect for the industry for AI-based pharmaceutical R&D services. Pharmaceutical dosage form testing, formulation, and drug development can all benefit from its utilisation. By employing artificial intelligence (AI) algorithms that examine vast amounts of biological data, such as proteomics and genomics, scientists can find targets linked to disease and forecast how they will interact with possible treatment candidates.
This AI-based pharmaceutical R&D services market covers companies and services that apply artificial intelligence (machine learning, deep learning, graph neural networks, generative AI, NLP, and allied compute/data platforms) to accelerate and de-risk pharmaceutical research & development. Typical services include target identification & validation, virtual screening and hit generation, de-novo molecular design, lead optimization, ADMET/Tox prediction, biomarker discovery, clinical trial design/optimization, synthetic route planning, and data-annotation/curation services. Buyers include pharma, biotech, CROs, and academic translational groups seeking faster timelines, higher success rates, and cost reductions across discovery and early development.
Rising clinical trials in the pharmaceutical industry: The AI-based pharmaceutical R&D services market is growing due to the rising number of clinical trials. This is majorly due to the rising demand for oncology drugs, cell and gene therapies, and biologics. As the demand grows, the need for AI for various steps in R&D will also grow.
For instance,
|
Study and Intervention Type (as of 2025-10-08) |
Number of Registered Studies and Percentage of Total | Number of Studies With Posted Results and Percentage of Total | |
| Total | 556,165 | 74,298 | |
| Interventional | 424,712 (76%) | 69,947 (94%) | |
| Type of Intervention* | Drug or biologic | 209,128 | 50,106 |
| Behavioral, other | 163,484 | 17,074 | |
| Surgical procedure | 44,664 | 3,555 | |
| Device** | 58,324 | 10,611 | |
| Observational | 129,505 (23%) | 4,351 (6%) | |
| Expanded Access | 1,013 | N/A | |
By service/R&D stage, the target identification & validation segment captured a revenue of approximately 30% of the AI-based pharmaceutical R&D services market in 2024. Researchers are using AI to improve their target identification strategy. AI may uncover relationships that might otherwise be overlooked by combining organised and unstructured data, providing a more comprehensive picture of possible targets. Drug target identification and validation are changing as a result of advanced analytics, which combines machine and deep learning, predictive analytics, computational chemistry, neural networks, massive language models, natural language processing, and Gen AI together.
By service/ R&D stage, the hit generation & virtual screening segment is estimated to grow at the highest rate during the forecast period. AI is transforming drug research from hits to leads. Pharmaceutical firms can quickly find interesting compounds, optimise leads, and expedite life-saving medicines with AI-driven virtual screening and sophisticated analytics, whereas traditional screening approaches may be sluggish, expensive, and ineffective.
By modality/therapeutic focus, the small-molecule discovery segment captured a revenue of approximately 45% of the AI-based pharmaceutical R&D services market in 2024. About 90% of all marketed medications are small molecules, making them the biggest class of licenced treatments. These substances have several benefits, such as tissue penetration, oral bioavailability, and known production methods. By using computer capacity to explore large chemical spaces, forecast molecular characteristics, and direct experimental design, artificial intelligence (AI) has become a complementary technology that tackles particular problems.
By modality/therapeutic focus, the biologics & antibody engineering segment is estimated to grow at the highest rate during the forecast period. By significantly speeding up and enhancing the discovery, design, and optimisation process, artificial intelligence is revolutionising the fields of biologics and antibody engineering. AI models can get beyond the conventional drawbacks of experimental-only methods, such as high failure rates, lengthy timeframes, and expensive costs, by using massive biological datasets.
By core AI technology, the classical ML/deep learning segment captured a revenue of approximately 40% of the AI-based pharmaceutical R&D services market in 2024. Molecular representation is necessary for hit-to-lead optimisation in drug discovery research, which predicts novel small molecule bioactivities for the target deconvolution. Prior studies have shown that peptide synthesis, drug ADMET screening, biomarker identification, and virtual screening are all significantly impacted by machine learning (ML) and deep learning (DL).
By core AI technology, the generative AI segment is estimated to grow at the highest rate during the forecast period. In the pharmaceutical sector, generative AI is revolutionising almost every facet of business operations and has the potential to unlock billions of dollars in value. Data management can be automated in a number of steps by fusing generative and traditional AI capabilities.
By deployment/commercial model, the SaaS/cloud platform access segment captured a revenue of approximately 48% of the AI-based pharmaceutical R&D services market in 2024 and is estimated to grow at the highest rate during the forecast period. Due to its affordability, scalability, and ease of use, this cloud-based software deployment approach has grown in popularity. With its ability to solve long-standing problems and spur innovation, SaaS is now making major strides in the health sciences and pharmaceutical sectors.
By end-user/buyer type, the pharmaceutical & large biotech companies segment captured a revenue of approximately 58% of the AI-based pharmaceutical R&D services market in 2024. To improve clinical trials, speed up drug discovery, and promote personalised treatment, leading biotech and pharmaceutical firms are aggressively incorporating artificial intelligence (AI) into their research and development services. This is accomplished through strategic partnerships with AI-focused startups as well as internal development.
By end-user/buyer type, the contract research organizations (CROs) & CDMOs segment is estimated to grow at the highest rate during the forecast period. From early-stage development to commercial production, CDMOs provide development and manufacturing services, whereas CROs concentrate on research, clinical trials, and regulatory affairs. Both CRO and CDMO operations are progressively using artificial intelligence (AI) to increase the speed, accuracy, and efficiency of drug discovery and development procedures.
North America dominated the AI-based pharmaceutical R&D services market in 2024, with a revenue of approximately 50%. High healthcare spending, robust regulatory environments, and developments in personalised medicine and biologics are the main factors contributing to the region's supremacy. Growth in the market is supported by rising demand for RNAi-based therapies and speciality medications. The United States dominates the region thanks to large R&D expenditures, early medication approvals, and a strong pipeline of cutting-edge treatments. Distribution is dominated by hospital pharmacists, but retail and internet pharmacies are still growing.
In 2024, the U.S. spent $805.9 billion on pharmaceuticals, a 10.2% increase over 2023. Prices were unchanged (down 0.2%), but utilisation (up 7.9%) and new medications (up 2.5%) were the primary drivers of this increase. In 2024, semaglutide topped the list of medications, followed by tirzepatide and adalimumab. Drug spending at nonfederal hospitals and clinics increased by 4.9% and 14.4%, respectively, to $39.0 billion and $158.2 billion. Prices in clinics stayed the same, and growth was driven by improved utilisation with a minor contribution from new goods.
In comparison to 2024, we predict that overall prescription medication spending will grow by 9.0 to 11.0% in 2025, while spending in clinics and hospitals will increase by 11.0% to 13.0% and 2.0% to 4.0%, respectively.
Pharmaceutical exports between Canada and the rest of the globe rose by 38% between 2019 and 2024. In 2024, 35,000 Canadians worked in the pharmaceutical manufacturing industry. Biomanufacturing was strengthened by $2.2 billion in government investments. The 2024–2025 report from Health Canada described regulatory action in detail. In 2024, Canada's pharmaceutical trade deficit was $4.78 billion.
Asia Pacific is estimated to host the fastest-growing AI-based pharmaceutical R&D services market during the forecast period. because there is a greater need for innovative goods as a result of people's growing knowledge of the treatment and management of illnesses. Furthermore, it is projected that rising domestic player investments in the area and mergers with significant companies would raise demand for and accessibility to treatment choices in the area.
China is now the second-largest pharmaceutical market and R&D centre in the world because to the country's recent explosive rise in the pharmaceutical sector. With the sector currently making up 29.5% of the worldwide research and development (R&D) pipeline, China is now the second-largest drug market in the world and a major centre for drug innovation and development.
The Indian pharmaceutical industry now ranks third in terms of pharmaceutical output by volume. The Indian pharmaceutical business supplies more than half of the global demand for various vaccinations, 40% of the U.S. need for generic pharmaceuticals, and 25% of all prescriptions in the UK. The domestic pharmaceutical industry consists of over 3,000 medicinal firms and 10,500 production units.
Europe is estimated to be significantly growing in the AI-based pharmaceutical R&D services market during the forecast period. The presence of some of the biggest pharmaceutical firms, rising R&D activity, and high healthcare costs are the main factors driving the market's expansion in the area. The pharmaceutical and healthcare industries in the area are well-established and contribute to market expansion.
Based on R&D investment and patent application levels, Germany is the top pharmaceutical innovation destination in Europe and one of the top clinical trial destinations in the world. A multitude of factors, including changing demographics, an increase in chronic illnesses, and a stronger focus on self-medication and prevention, are contributing to the largest pharmaceutical industry in Europe expanding more quickly than the German economy. Germany's pharmaceutical sales reached EUR 59.8 billion (ex-manufacturer prices) in 2023, a 5.8% rise.
By Service/R&D Stage
By Modality/Therapeutic Focus
By Core AI Technology
By Deployment/Commercial Model
By End User/Buyer Type
By Region
October 2025
October 2025
October 2025
October 2025