Sector Spotlight: Pharmaceutical Packaging

Key Takeaways:

  • Several industry and demographic trends are setting up the pharmaceutical packaging sector for steady, long-term growth. 
  • There are three key areas of differentiation for top-performing packaging assets. 
  • Innovation will continue to propel this sector forward and create a wide range of opportunities for buyers and investors to capitalize on. 

The global pharmaceutical packaging market was estimated at $117.2 billion in 2021 and is projected to expand at 9.5% CAGR through 2030.i This growing, dynamic, and resilient sector is benefiting greatly from industry-wide tailwinds bolstering the pharmaceutical space. 

Demographic trends, including the aging population and a corresponding increase in chronic and lifestyle diseases, serve as a backbone of growth for pharmaceuticals. New drug development and improved diagnosis are also driving increased demand for medication and, consequently, packaging. This growth is happening against a backdrop of ESG concerns and supply chain challenges, both of which reward innovative packagers that can safely and sustainably get pharmaceuticals from maker to patient. 

Here, senior bankers from the Harris Williams Healthcare and Life Sciences Group and Industrials Group share three areas of focus for top growth companies in the pharmaceutical packaging space. 

The Escalating ESG Priority

ESG is a top priority in pharmaceuticals. As pharmaceutical companies work toward ESG goals, they are pushing suppliers for packaging solutions that meet stringent quality requirements and sustainability objectives.  

“First and foremost, packaging providers must deliver against quality and reliability requirements. However, there is fast-growing interest in the sustainability of inputs, such as recycled, recyclable and biodegradable materials, and sustainable business models and solutions, such as reusable solutions and packaging return options. Many companies are in the infancy of developing packaging that meets sustainability goals while protecting quality. Those with the best and earliest offers stand to gain valuable differentiation,” says Hepper. 

Morrison adds: “Contamination concerns add complexity to recycling and reuse in pharma packaging, particularly for packaging that touches the product itself. If packaging contacts certain chemicals or medicines, it may not be reusable.” 

In pursuit of more sustainable solutions, packaging companies are looking at both reuse and recycling, such as shifting from single-use packaging to multi-use packaging. This requires reverse logistics capabilities, which means supply chains are managed directly by the pharmaceutical companies to retrieve packages from the market and refill them.  

Another strategy is switching to easier-to-recycle materials. Packaging design is starting to take recyclability into account to create paper-based, mono-material plastic or easily separable solutions.  

This creates room for innovation with new products and new materials. Ripperger provides an example: “Traditional pharmaceutical blister packaging consists of a thermoformed plastic cavity with a pliable aluminum lid. This material combination makes recycling difficult. To solve this problem, Klöckner Pentaplast created kpNext, a recyclable PET blister film that is combined with a PET cavity to create a recyclable mono-material solution.” ii

Lastly, companies can approach sustainability by ensuring recyclability outside of pharmaceuticals. Rather than using recyclable materials for pharmaceutical use due to high quality requirements, they can instead focus on materials that can be recycled as inputs to products in other industries. 

Growing Demand for Product Protection

Many life sciences products, including pharmaceuticals, medical devices, organs, and specimens, require temperature-controlled storage and distribution to ensure molecular stability, preservation, and useful life extension. This temperature-controlled pharmaceuticals market is growing at an estimated 7.3% CAGR.iii Like the pharmaceuticals they protect, cold-chain packaging’s demand is strong and projected to keep expanding beyond its current estimated market of $4.4 billion.iv 

Packaging companies with superior solutions to address these challenges will be well positioned for growth, especially as supply chains become longer and more complex and pharmaceutical companies serve an increasingly global population. 

Cold Chain Technologies, a leading provider of reusable and single-use passive thermal packaging solutions for shipping temperature-sensitive materials, exemplifies a winning company in this area. 

“Through advanced engineering and technical expertise, CCT continues to develop innovative and differentiated packaging solutions for demanding applications,” says Hepper. (For more on temperature-controlled packaging, see Temperature-Controlled Packaging and the Growing Pharmaceutical Cold Chain.) 

Packaging also plays a critical role in keeping a pharmaceutical product intact throughout a complex, increasingly global value chain. Perkins explains: “The high requirements for the pharma packaging market are also evident further down the value chain. For example, the transportation of bulk drug substances allows new market participants to introduce innovative solutions and take large market share quickly. Another top-performing business, Single Use Support, offers a fully scalable, end-to-end solution of single-use consumables and equipment for filling, freezing, shipping, thawing and draining these high-value substances. This helped them win several global, blue-chip pharma and bioprocessing companies as customers.” 

Rising Interest in Smart Packaging Solutions

Technologies such as RFID, near-field communication, and QR codes offer new opportunities for pharmaceutical packaging platforms to provide product visibility throughout the supply chain and interact with all parties involved from manufacturers to patients. Once again, smart packaging’s value proposition is increasingly relevant as the pharmaceutical supply chain becomes more global and complex, rewarding those suppliers with the most modern and comprehensive solutions. 

One high-priority smart packaging application is track and trace packaging that monitors where the product is from and when it was produced, while providing full traceability through the supply chain. Another key application is transport and substance monitoring such as temperature or shock sensors. 

“Businesses have interesting innovations in smart packaging relating to protecting quality, such as using oxygen scavengers to maintain oxygen levels and ensure the safety and integrity of the medicine inside,” adds Morrison.  

An emerging innovation is packaging that can help patients directly. “There’s an exciting new technology that senses and logs if the patient has taken a medication as prescribed. For instance, packaging can track if a pill is removed from a bottle and send that information to a cloud-based application accessible by the physician,” says Ripperger. 

A Growing Sector With a Path for Innovation

Pharmaceutical packaging is a growing and resilient sector buoyed by strong growth in pharmaceuticals and supported by underlying demographic developments. It's also primed for innovative solutions that will further fuel its positive trajectory. 

“Pharmaceutical packaging companies can differentiate based on one or more growth areas including sustainability, product protection, and intelligent solutions. In all cases, they must meet pharmaceutical company requirements to maintain quality and efficacy throughout a global supply chain. These factors complicate packaging innovation, but companies that can help customers solve their most pressing needs will stand out. There’s exciting innovation ahead and many opportunities for buyers and investors to be part of this sector's growth,” says Perkins.


Beyond the pharmaceutical packaging segment, the Harris Williams Healthcare and Life Sciences Group and Industrials Group cover a wide range of high-value subsectors. 

To learn more, please contact our senior bankers. 

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