Outsourcing clinical-trial materials (CTM) is strong and growing. Because of significant cost pressures and the globalization
of clinical research activities, pharmaceutical companies are hiring contract manufacturing organzations (CMOs) to provide
many services, including CTM production. In response to the growing demand, CMOs are expanding their capacity both domestically
Early-stage pipeline growth spurs demand for CTM services
Demand for CTM services stems from robust drug pipelines. The number of Phase I candidates has grown by 60% in the past five
years, and the number of Phase II candidates by 30% (1). Approximately 75% of these candidates originated at small and mid-sized
pharmaceutical companies (2). The Pharmaceutical Research and Manufacturers of America reports 1264 drugs were in Phase I
development, and 1171 drugs were in Phase II development as of December 11, 2007.
Large companies pursue outsourcing
As early-stage pipelines increase, pharmaceutical companies are increasing their outsourcing of CTM supplies. The largest
shift in demand for clinical supplies is occurring within the mid-sized to large pharmaceutical companies, observes Scott
Houlton, chief operating officer of Aptuit (Greenwich, CT), a contract drug-development services company. Large and mid-sized
companies historically outsourced only a small portion of their work, he remarks, but they are changing their approach. This
segment of the market is beginning to strategically hire two or three key partners for certain projects.
Others confirm the trend toward multiple-vendor outsourcing. "Some sponsor companies may hire more than one contractor to
develop the same drug product for the same phase," says Maureen Spataro, founder and president of the North Carolina-based
consulting firm Spataro and Associates. "This way, they benefit from having two sets of scientists working on their CTM."
Hiring several CMOs for the same project increases the chances that it will be completed successfully, she adds.
Another approach, according to Spataro, is to hire several contractors to develop different dosage forms or different release
profiles for one product. "The ultimate goal is to save time," she says. "By contracting to multiple vendors, development
efforts can be achieved on a parallel path. If one company's prototype fails along the way, there is a possibility that the
other may succeed."
Phil Meeks, chief executive officer of the CMO Azopharma (Miramar, FL) agrees that meager late-stage pipelines are spurring
increased outsourcing. Pharmaceutical companies are now trying to get more candidates into clinical trials, he says. "If companies
have capital," he adds, "they'll outsource to achieve more at once."
Aptuit's clinical packaging and logistics facility in Bathgate, United Kingdom. (IMAGE IS COURTESY OF APTUIT)
Nailesh Bhatt, managing director of the New Jersey-based consulting and advisory firm Proximare, says, "Outsourcing has definitely
increased by the large companies." Big pharmaceutical companies are deciding to focus on their core competencies. These companies
are now more likely to ask CMOs to perform services for which they themselves have less expertise or ability. Spataro concurs,
commenting that large pharmaceutical companies are now looking to contractors for CTM because they have made a strategic decision
to outsource and focus on their core competencies. Manufacturing CTM "is not something that everybody's capable of handling,"
Cost pressures and Big Pharma's recent restructuring activities are creating the conditions for increased outsourcing. A reorganization
plan that Pfizer (New York) announced in January 2007 reflects this trend. The company said it would cut 10,000 jobs and close
several plants to save approximately $2 billion by the end of 2008. Among the plants to be closed are Pfizer's facilities
in Ann Arbor, Michigan, where the company prepares clinical supplies. Pfizer said it would increase outsourcing to reduce