What to Watch for in 2011 - Pharmaceutical Technology

Latest Issue
PharmTech

Latest Issue
PharmTech Europe

What to Watch for in 2011
CDMOs and CMOs face weak economic recovery, consolidation, and globalization.


Pharmaceutical Technology
Volume 35, Issue 1, pp. 76, 78

CMOs specializing in APIs went through a similar technology arms race 10 years ago. They learned that a broad technology offering was a necessary but not sufficient dimension for competitive success. Technology capabilities can often be duplicated, making it difficult for CMOs to differentiate themselves on that dimension alone. While CMOs expand their technical capabilities, they will need to maintain their focus on performance and serve a client base with increasingly global aspirations.

Globalizing the industry. It looks to us that the biggest challenge facing the CMO and CDMO industry is globalizing its offerings. Clinical research organizations (CROs) have moved aggressively to create a global footprint, and their ability to support international clinical trials is a big reason why the largest CROs such as Quintiles (Research Triangle Park, NC) and Icon Clinical Research (Dublin) have come to dominate the CRO industry.

CMOs and CDMOs have been slow to attack the global development and manufacturing opportunity. Only a few Western API development and manufacturing companies, including Lonza (Basel), Aptuit (Greenwich, CT), and AMRI (Albany, NY), have made a major effort to establish their presence in emerging markets. In part, this slow pace reflects the relatively recent nature of the opportunity: demand within emerging markets for services such as formulation, manufacturing, and clinical packaging is following the growth of clinical trial activity in those countries. The slow response only reflects the fact establishing a presence in the emerging markets requires significant investment in key business assets, including facilities, senior management and technical staff, and knowledge about how to do business in those countries.

Interestingly, the CDMOs and CMOs that have been most aggressive in growing their global network of operations have been those companies founded and headquartered in the emerging markets themselves, companies such as Piramal Pharma Solutions (Mumbai), WuXi AppTech (Shanghai), and Jubilant Life Sciences (Noida, Uttar Pradesh, India.) Understanding the next steps these companies will take to become truly large global players in the CMO and CDMO market is central to knowing where the industry is headed next.

Jim Miller is president of PharmSource Information Services, Inc., and publisher of Bio/Pharmaceutical Outsourcing Report, tel. 703.383.4903, fax 703.383.4905,
http://www.pharmsource.com/.


ADVERTISEMENT

blog comments powered by Disqus
LCGC E-mail Newsletters

Subscribe: Click to learn more about the newsletter
| Weekly
| Monthly
|Monthly
| Weekly

Survey
FDASIA was signed into law two years ago. Where has the most progress been made in implementation?
Reducing drug shortages
Breakthrough designations
Protecting the supply chain
Expedited reviews of drug submissions
More stakeholder involvement
Reducing drug shortages
70%
Breakthrough designations
4%
Protecting the supply chain
17%
Expedited reviews of drug submissions
2%
More stakeholder involvement
7%
View Results
Eric Langerr Outsourcing Outlook Eric LangerRelationship-building at Top of Mind for Clients
Cynthia Challener, PhD Ingredients Insider Cynthia ChallenerRisk Reduction Top Driver for Biopharmaceutical Raw Material Development
Jill Wechsler Regulatory Watch Jill Wechsler Changes and Challenges for Generic Drugs
Faiz Kermaini Industry Insider Faiz KermainiNo Signs of a Slowdown in Mergers
CMOs and the Track-and-Trace Race: Are You Engaged Yet?
Ebola Outbreak Raises Ethical Issues
Better Comms Means a Fitter Future for Pharma, Part 2: Realizing the Benefits of Unified Communications
Better Comms Means a Fitter Future for Pharma, Part 1: Challenges and Changes
Sandoz Wins Biosimilar Filing Race
Source: Pharmaceutical Technology,
Click here