Outsourcing

How much do you know about parallel trade? Perhaps you may have heard someone mention these words and have then switched off. In a sense, it's hardly surprising given the fact that most media coverage centres on interpretation of complex legal cases. By the time you reach the end of these types of articles, you can't work out what the mentioned companies were arguing about in the first place and on which technical details the case was judged. Yet, time after time, a legal ruling on a parallel trade issue rockets to the front pages of the pharmaceutical press and even, occasionally, the mainstream media.

Although overall pharmaceutical industry investment in R&D in Spain is growing at a slower annual level since 2004, investment in clinical trials remains strong.

The pharmaceutical industry in Asia is gearing up to be at the centre of the global market. Most pharmaceutical companies in the region expect this shift to happen fast. Not only is Asia set to become the largest pharmaceutical market in the world, but many Asian territories will be the powerhouses of the industry. By 2020, the worldwide pharmaceuticals market could be worth around $1.3 trillion, with China being the second or third biggest market.

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Pfizer?s restructuring plans reportedly include major investments in outsourced manufacturing operations, production facility closures, and personnel reductions.

Expansions

Contract service providers exist to help clients meet their strategic and financial business objectives. So any prognostication on what the pharmaceutical outsourcing industry will look like in 30 years is really a forecast of the nature and speed of changes in pharmaceutical technologies and business models.

A surge in capacity in contract microbial and mammalian cell-culture is underway to meet rising production needs for biopharmaceuticals.

The dynamics of the R&D pipeline could undercut recent CRO and CMO successes.

"May you live in interesting times," goes the allegedly ancient Chinese curse. Well, these have been "interesting times" indeed for those working in the pharmaceutical industry.

In recent years, Big Pharma companies have shown increasing interest in setting up manufacturing in India and the Far East. The advantages of this outsourcing trend are obvious - decreased costs, coupled with ever increasing standards of operation. However, as the technological and quality of life aspirations of these new locations increase, the attractive cost advantages could dwindle and cause pharma companies to look elsewhere for manufacturing locations. Perhaps, they will consider Africa.

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Eli Lilly plans to invest $100 million in research and development in China over the next five years through Lilly Asian Ventures, a Lilly-owned venture capital firm that makes investments in Asia.

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Recent activity among contract manufacturing organizations include expansions for Lonza and Codexis in Asia and the addition of aseptic cytotoxic capabilities for DSM. Also, Vetter adds anticounterfeiting capabilities for prefilled syringes.

Ash Stevens is adding cryogenic capabilities as part of an overall strategy to focus on small molecules requiring smaller volumes and complex chemistry.

Equipped with a new sourcing strategy in Asia and improving market conditions, Pfizer CentreSource expects a good performance from its steroid business this year and in 2008.

The US Food and Drug Administration launched a new program on Oct. 4 to increase the number and variety of generic drugs available to the public, beginning in fiscal year 2008. The Generic Initiative for Value and Efficiency (GIVE) will use existing resources to help the agency "modernize and streamline the generic drug approval process," according to FDA.

Candid comments from a Big Pharma executive highlight the complexity of contract manufacturing.

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