The world of biopharmaceuticals, characterized by the pressure to innovate and offer accessible drug treatment for patients worldwide, is primed for change. Although CDMOs face some of the same challenging conditions as other pharma and biotech companies today, the industry’s projected growth promises ample opportunities for those that forecast proactively and expand to meet rising demand.
The modern life science industry constantly improves with medical technological advances and innovative drug solutions. With the injectable drug market projected to grow by 5.8% and parenteral packaging to increase by 4.6% in the next decade, according to Future Market Insights, the evolving environment offers many opportunities for pharma and biotech companies and their outsourcing partners. CDMOs, in particular, are well-positioned for exponential market growth. While the pharma industry is expected to grow at a compound annual growth rate (CAGR) between 5-8% through 2028, the CDMO market is expected to increase at a pace of 6.9%, according to Grand View Research. With the promising rate of growth, outsourcing partners of the future are rising to the challenge of a transforming industry.
As managing directors of a globally operating pharma service provider, we are constantly considering how we can expand our capacities to meet the demands of customers both now, and in the future. This article addresses how pharmaceutical service providers can invest now to prepare for anticipated market growth and how the evolving relationships between drug owners and CDMOs are impacting this need for change due to a shift in the scope of these partnerships.
A new partnership style
While they have always supported pharma and biotech companies with efficient manufacturing processes and supply chain connectivity, fill and finish partners are witnessing a shift in their role with drug developers. It is becoming increasingly common to perceive what was once a transactional relationship transform into a much more collaborative partnership.
In past years, outsourcing partners were considered vendors that provided a service that drug developers for example might lack in-house. This ranged from niche clinical and commercial manufacturing and primary and secondary packaging capabilities to a deep-rooted understanding of supply chain and regulatory authorities. Now, while these all remain true, the nature of these relationships with CDMOs is becoming more strategic and long-term, ultimately driven by a shared sense of obligation to the outcome of the final administration-ready medication and the future-oriented commitment of independent partners to meet customer and regulatory needs over the long-term.
Independent CDMOs are better able to take charge of their own sustainable growth to support operational stability and supply chain security – a major consideration for customers looking for the right partner. This stability and sustainable growth mean strategic partnerships that extend well into the future.
To maintain value in the evolving biopharmaceutical landscape, CDMOs must anticipate customer demands and adjust accordingly. Those who do so before customers request extra support and capacities will be best suited to taking on additional business. Pharma and biotech companies increasingly develop both small-batch and blockbuster drugs simultaneously. Given the different manufacturing procedures for each, it is less economical for a drug owner, even the pharma giants, to have the in-house capabilities and capacities to manufacture both. This is one way development and manufacturing specialists can support customer needs, due to their niche and in-depth expertise on the specifics required for the clinical and commercial manufacturing of sensitive molecules.
Recent data has shown that the spectrum of small batch to blockbuster drugs is expanding even further. Blockbusters have long been known as drugs that generate more than $1 billion in annual sales — much different from small batch manufacturing for rare diseases. Now, however, we are seeing a rise in mega blockbusters, or drugs exceeding $5 billion in annual sales.
This evolution points to a need for CDMO facilities to expand in order to boost the capacities needed to accommodate the growing manufacturing, assembly and packaging needs. As only a few customers, if any at all, will manufacture drugs to this scale solely in-house, they will increasingly rely on partners further enhancing the depth of these relationships.
Rather than a simple transaction where a biopharma company hires an outsource partner to manufacture a drug, there is a growing shift to a two-way collaboration in which both parties are heavily involved in getting the drug from phase 1 all the way to commercialization and beyond.
Forward-thinking and action for future success
Although CDMOs are better equipped to support this expanding manufacturing environment than some biopharma companies, they still require proper planning and action to enhance capacities long before they’re needed. After all, when a pharma or biotech company seeks out external support, they are often looking for a partner with the right expertise, capacity and open filling lines now, and those that have not yet expanded seem to miss out on new business. Prioritizing technological advancements, space expansions and investments for future capacities now give solution providers a leg up over competition that can allow for growth and success for decades.
Technology is evolving rapidly, offering automation of tedious tasks and new, efficient methods for accomplishing various elements of the pharma manufacturing process. One major benefit for pharma developers considering outsourcing is access to new infrastructure and technology they may not have in-house, whether because of need, cost or capacity to operate. CDMOs are continuously investing in new infrastructure that further enhances production quality, timelines and capacities and offer added value to potential customers.
In particular, opportunities for this investment in new technology include artificial intelligence (AI) or other machine learning to analyze data and perform predictive maintenance with ease. Implementing robots to conduct routine tasks can also improve the standardization of processes. The investment in expanded technological assistance further improves the quality and innovative nature of operations and offers access to advanced technologies to the customers who engage.
Possibly even more important for fill and finish partners looking to improve facilities ahead of rapidly evolving customer needs is an investment in production spaces. CDMOs can forecast the evolution of customer demands primarily by keeping up a constant open dialogue with them, including exchanging information about their drug candidate pipelines, as well as understanding available research that forecasts the future of the industry. By investing in facility expansions preemptively, customers can be confident that their outsource partner is prepared – with capacity, capability and infrastructure — to meet production timelines for both current projects and those coming down the pike.
As CDMOs consider their transforming role, they should contemplate how they develop their independent growth strategy to keep up with the expanding and evolving market. As the market changes, so does the competitive landscape among aseptic fill and finish partners.
Expansion of infrastructure and the workforce
Pharmaceutical service providers are growing rapidly to keep up with the broader industry.
While some pharma and biotech companies are being forced to lay off employees in the face of current economic conditions, CDMOs must consider a strategic plan to hire more employees to support future growth. As populations age, demographics change and the prevalence of chronic illnesses increases, the need for clinical development and commercial manufacturing support will rise. With the higher demand for external support, the industry will follow its predicted growth trajectory. Those that prepare now to meet the growing demands, offering both small- and large-scale pharma and biotech companies a strong partner, a technology expert and a leader in high-quality sterile production, will flourish amid the anticipated market growth.
Need for sustainable practices
With the wish for a bright and prosperous future, the pharma sector needs a sustainable mindset to solidify success. As a major member of the larger value chain, pharma companies looking to prioritize sustainability will need to partner with organizations that share this commitment. Achievements like recycling rates and annual energy savings can position some partners over others and identify them as reliable and accountable members of the value chain that can enhance a customer’s sustainability programs, rather than inhibit them. Joining international organizations and committing to accomplishing specific sustainable goals is a way to prioritize accountability across programs enacted in pharma facilities.
For example, companies can join the Science-Based Targets initiative (SBTi), which outlines and promotes science-based climate targets, and holds members to a commitment to the 1.5 °C (2.7°F) temperature target specified in the Paris Climate Agreement. Alternatively, joining the UN Global Compact promises current and potential customers that their CDMO partner is following a reputable guide for all business activities by the initiative’s 10 established principles on human rights, labor standards, the environment and anti-corruption.
The pharma and biotech industry is experiencing continuous growth. As drug owners are often increasingly limited by their own internal capacities, infrastructure and technologies, the opportunity for CDMOs to form long-term partnerships is rising. Fill and finish partners, therefore, must invest now to have the necessary filling lines and accompanying infrastructure in place long before customers need them. This, paired with the prioritization of sustainability and advanced technological infrastructure, will elevate some service providers over others and lay the groundwork for a bright future as a collaborative partner and strong team asset.
