Biopharmaceuticals constitute a global industry, and biomanufacturers and drug innovators have long recognized the need for
a global product strategy. As emerging economies grow, they are beginning to demand domestically produced biologics and vaccines
to meet the public health needs of their growing populations, which in turn, has opened strategic opportunities at major biopharmaceutical
companies. Biomanufacturing hubs outside the US and Western Europe are providing new options for global operations. In the
past, potential cost savings drove many outsourcing decisions, but today, decisions are more complex as drug innovators integrate
the demands of a growing global market.
BioPlan Associates tracked these trends in its 9th Annual Report and Survey of Biopharmaceutical Manufacturers (1). As biologics companies contract out of more sophisticated projects, global outsourcing has moved from a tactical to
strategic decision for many companies. The decision calculus surrounding the choice of a global CMO reflects many of these
changes. For example, perceptions of offshoring are changing, and drug innovators have become far less concerned about whether
their CMO is based locally. Of 19 CMO attributes identified in the BioPlan study, "being local" came in last in terms of importance
with only 6.3% of the 302 respondents identifying this attribute as "very important" (1). In 2005, 10.4% of respondents cited
a CMO's location as "very important," but only 6.3% did in 2012. This change reflects greater acceptance of offshoring outsourcing
activities due to industry globalisation, more production projects being successfully offshored and improved expertise of
sponsors in managing offshored outsourcing.
Future of offshoring
The BioPlan survey asked respondents to reflect on their facility's future international outsourcing (i.e., offshoring) during
the next five years. Depending on the outsourcing operation, respondents indicated between 35–42% of their manufacturing operations
(process development, biomanufacturing operations and other operations) could be offshored to some extent (see Figure 1), in five years, and 46% of clinical trial-manufacturing operations could be offshored to some degree.
Figure 1: Percentage of biomanufacturers in BioPlan Associates’ 2012 and 2011 surveys responding that they will offshore
at least some biomanufacturing during the next five years (1).
A large percentage of biomanufacturers in 2012—as much as 36%—expect some manufacturing offshored by their facility during
next five years (see Figure 1) although the percentage expecting to offshore more than half of their operations rated only in the single digits. This finding
suggests that it may be too soon to assert that offshoring will become a mainstream activity although there are reasons to
expect that offshoring will become more accepted, especially as regional operations outside the US and Europe begin to meet
regulatory standards and as single-use bioprocessing devices enter commercial-scale manufacturing. These integrated, fully
disposable facilities will enable manufacturing in more developing regions as many of the quality-management processes required
for traditional facilities can be "built in" to the disposable devices.
In comparing survey results on offshoring in 2012 and 2011, the survey showed an across-the-board increase in the percentage
of respondents who said they expect offshoring of at least some of their operations during the next five years (see Figure 1). Specifically, the survey showed that:
- 35.7% said they would offshore at least some process development for biomanufacturing, up from 22.4% in 2011.
- 40.5% indicated they would offshore at least some biomanufacturing operations, up from 37.6% in 2011.
- 41.7% expected to outsource internationally other operations, up from 29.6% in 2011.
According to BioPlan's Top 1000 Global Biopharmaceutical Facilities Index, 37.5% of global biopharmaceutical manufacturing capacity exists outside of North America and Europe (2). Holding respectively
8.5% and 8.1% of global biomanufacturing capacity, China and India are emerging on the global scene, followed by Japan and
other Asian countries, which have 9.6% of global biomanufacturing capacity and Latin America at 6.5%.