Pharma Industry Trends: Global Contract Manufacturing

Pharma Industry Trends - Introduction to Contract Manufacturing Part 1

Contract manufacturing is a popular and ever increasing trend amongst companies within the pharma industry. Entrusting part of your business to a third party is a very big decision and needs solid reasoning and analysis of many different factors to decide whether outsourcing is the right move. As we speak to thousands of industry experts every year at our conferences and events, Pharma IQ is in an excellent position to find out exactly why a business may choose to move part of their processes out of their every day business responsibilities.

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Unsurprisingly, often the main reason for outsourcing is simply not having the internal manufacturing resources available to cope with demand. In this situation, contract manufacturing is often the quickest and easiest solution to meet requirements. This may also solve problems of lack of expertise within a company, especially where new methods and regulations have been introduced in a certain area. When the landscape of the pharma industry changes, businesses have to be able to adapt quickly in order to stay in line with their competitors, and looking outside of their business is often the best solution.

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Another very popular reason given is that outsourcing can heavily decrease the costs of the manufacturing process, especially if moved to areas with emerging pharma markets such Japan, China, India and Brazil. Where the pharma industry is still developing, manufacturing costs remain much lower than in the UK and the US, providing savings that can counteract the soaring cost of drug R&D. With pressures on pricing from the market and competitors, outsourcing is often the best option for companies to reinstate their profit margin and ensure future commercial success.

Other benefits include the huge number of potential clinical trial patients from this relatively untapped market. They are also likely to become the next buyers when the population size and economic potential of these countries is fulfilled. This of courses raises a very important consideration; contracting and forming partnerships with these countries while they are developing lays solid foundations for future collaboration. Businesses who fail to do this may find themselves facing fierce competition from these economies in the longer term.

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