Evaluating Supply and Demand Patterns for Contract Biologics Manufacturing - Pharmaceutical Technology

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Evaluating Supply and Demand Patterns for Contract Biologics Manufacturing
The authors analyze the supply–demand trends for contract biologics manufacturing and the strategies of pharmaceutical and biotechnology companies and their suppliers in the value chain.

Pharmaceutical Technology

Almost all process development done in-house. Another strategy is to keep process development work in-house. Feedback from manufacturing directors using this approach is below:

  • "We always play a big role in process development. We know a lot about cell-line development and purification."
  • "Process development is all done internally. This is sort of our specialty. We don't want to build cell banking, regulatory, etc., since we wouldn't use them to capacity."
  • "Presently, we do not outsource process development, but if a CMO has any capability that is superior to our in-house capabilities, we would consider outsourcing. We are looking at outsourcing formulation now."
  • "One hundred percent of our process development is done internally. We like to maintain control of process development."

Biopharmaceutical contract manufacturers

Table III: Select business models of contract manufacturers (1).
In the final analysis, the biopharmaceutical contract manufacturers were asked about their observations concerning the contract-manufacturing business model. The key observations are shown in Table III. Most of the biopharmaceutical contract manufacturers observe that the fee-for-service business model for contract manufacturing, with its large up-front investments coupled with high fixed operating costs, require high capacity-utilization rates to make the business model financially attractive.

To mitigate financial and commercial variation inherent in the contract-manufacturing business model, most biopharmaceutical contract manufacturers are expanding their service offerings and are providing more value-added services. Other strategies of biopharmaceutical contract manufacturers include stronger relationships with their biopharmaceutical customers, a better balance of capacity with demand, and the mixed use of in-house and outsourced biopharmaceutical manufacturing capacity.

Looking forward

The increased development of biologic-based drugs will fuel growth in the biopharmaceutical contract manufacturing market. The manufacturing strategies of many pharmaceutical and biotechnology companies involve using outside contractors to manufacture their products. As the market matures and seeks increased efficiencies and lower costs, pharmaceutical and biotechnology companies are looking for biopharmaceutical contract manufacturers to provide additional services.

In turn, biopharmaceutical contract manufacturers see the expansion of their service offerings as a strategy to make the contract manufacturing business model more sustainable while providing needed services to their customers.

William Downey* is president, and Lynne Sopchak, PhD, is a science market analyst at HighTech Business Decisions, 3159 Almaden Expressway, Suite 223, San Jose, CA, tel. 408.978.1035, fax: 408.978.8753,

*To whom all correspondence should be addressed.


1. "Biopharmaceutical Contract Manufacturing 2007: Quality, Capacities and Emerging Technologies," HighTech Business Decisions (San Jose, CA, 2007).


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