How have outsourcing partnerships altered in light of newer market trends?
In the past, pharma companies participated in the global R&D process from initial development right through to final product commercialisation. Today, however, those same companies focus on added value and tend to outsource certain, nonstrategic areas to be faster and more competitive. This could be research areas, manufacturing areas or regulatory issues — anything that enables companies to focus more of their own, internal resources on core activities.
Parenteral solutions and lipid emulsions are a rapidly growing area of the market, mainly because of the high number of patent expiries. In particular, the ready-to-use mixtures will be in demand because of the advantages this form offers, as well as their widespread use in hospitals. Such mixtures offer advantages because they can reduce medication errors, require less manipulation, are user friendly and, consequently, safer for partients. Patient safety is something that can not be forgotten in any stage of a pharma company's business. However, the manufacture of these mixtures requires significant manufacturing capacities; many pharma companies decide not to invest in the expensive facilities themselves and instead turn to outsourcing.
How has the growth of emerging markets affected business?
Emerging markets are powerful growth drivers and have placed many western companies in a weaker position; cost structures in India and China are lower compared with European manufacturing companies. There is huge pressure on us and other western service providers to reduce costs, as well as to maintain quality while reducing risks and time to market. Fortunately, many of these pressures have been in place in the market for a long time and companies with experience are well placed to deal with them.
However, the emerging markets can also provide an opportunity for western companies to expand. In the last few years, lack of experience and technology in these markets has led to a particular demand for complete turnkey projects for parenterals, including the construction of pharmaceutical plants and everything necessary to make it run, such as machinery, documentation and training for example. Only companies with long-term excellence experience can lead such projects, and so we can see an opportunity in the threats presented by the emerging markets.