In looking at the outsourced relationship itself, do you think there is increased interest by pharmaceutical companies to
work with fewer suppliers and form preferred provider relationships?
There is a clear trend to work with fewer preferred suppliers. Also, pharma companies are starting to focus more on their
core business and seek increasing amounts of input and solutions from their suppliers. Thus, they may work with an external
expert to access what specialised activities they can best provide best, as these activities may not be in a field of expertise
for the pharmaceutical company.
As closer relationships with preferred suppliers evolve, more frequent and open communication is a necessity. A Joint effort,
with common goals and shared risk and reward, is today’s widely accepted business model. Some pharmaceutical companies have
even created “true external manufacturing departments” where they manage the suppliers as if they are part of the internal
Looking ahead five years for now, how do you see the market for contract pharmaceutical development and manufacturing evolving?
Going down the line of consolidation, future pharmaceutical fine chemicals companies may look different to those of today:
- A critical size may be required to stay competitive, optimise and balance their portfolio, and benefit from other synergies.
- A more global presence will be essential (i.e., marketing and production assets in different parts of the world to balance
currency risks whilst also having more flexibility to stay close to local developing markets).
- Diversification may also be revisited; for example, pharmaceutical fine chemical companies could expand into agro fine chemicals
or other business segments. These pharmaceutical fine chemicals may become part of a larger conglomerate or add a 2nd or 3rd
market offering to their portfolio that has different business cycles.
All of these changes need to be made whilst maintaining a very flexible, lean, creative and responsive organisation.