It is no surprise that countries, such as China and India, which are rapidly developing biomanufacturing clusters, appear high on the list of likely country destinations for international outsourcing. Among all industry respondents to the BioPlan annual study, China ranked highest as a potential international outsourcing destination with 26.2% of respondents (up from 17%), indicating that there was a "likelihood" or "strong likelihood" that they would outsource production to facilities there in the next five years. Next on the list was India, cited by 18.4% of respondents, up from 13.2% in 2011.

To some extent, geographical outsourcing trends tend to reflect availability (perceived or actual) of reputable CMOs in a given country. New facilities coming on line and the limited number of known CMOs can be more important reasons than cultural or political factors while patent and intellectual-property issues also clearly play a role. Nevertheless, China is clearly the top potential destination for future international outsourcing (even when segregating by US and European-based respondents), and India is growing in favour, particularly among US respondents.

It is worth keeping in mind that China was a late starter in the area of contract manufacturing. The few internationally based CMOs in China are working hard to establish a global presence, and legal and regulatory aspects continue to hinder commercial-scale contract manufacturing. Nevertheless, there continues to be excess pharmaceutical production capacity in China, so outsourcing may permit improvements as the idle capacity of many production facilities is addressed. It may take years for Chinese CMOs, however, to come up to full cGMP standards and to be permitted to operate at commercial scale. The BioPlan survey data shows that by 2017, between one-third and almost one-half of the industry will be outsourcing some form of operations internationally, with China a key component of future plans. Assuming that acceptance of offshoring continues to increase and that key emerging destinations, such as China, reach the necessary regulatory standards, it is reasonable to assume that by the end of this decade, offshoring will have become a mainstream activity.

References

1. BioPlan Associates, 9th Annual Report and Survey of Biopharmaceutical Manufacturers (Rockville, MD, 2012).

2. BioPlan Associates, Top 1000 Global Biopharmaceutical Facilities Index (Rockville, MD).