Abstract
Drug manufacture now typically accounts for 25% of company revenues and achieving agility in the manufacturing process has become essential for pharma companies hoping to align their supply chains with constant shifts in global product demand. In addition to offering efficiencies in cost, capacity and time-to-market, contract manufacturing organizations (CMOs) can provide innovative, state-of-the-art process and production technologies to support the rapid technical transfer of products from R&D to commercial manufacturing. However, the effective management of the CMO/sponsor relationship is critical not only in satisfying regulatory requirements amid growing concerns over quality control, but also in meeting the overall commercial aim of the project. ' Contract Manufacturing Strategies' is a new report published by Business Insights that explores the future of the contract manufacturing market with a detailed analysis of emerging drivers and restraints, business models and production strategies. The potential benefits and risks of contract manufacturing are assessed and the key strategies for effective CMO selection and successful relationship management are identified. This report also reviews the latest FDA contract legislation to determine the most effective measures in ensuring regulatory compliance and assesses the rapidly expanding markets of India and China in terms of growth potential and regulatory outlook. Understand how the CMO market will develop over the 2008-13 period, identify emerging manufacturing strategies and regulatory developments and assess the outsourcing growth potential of India and China...
Table of Contents
Executive Summary
- The contract manufacturing market
- CMO industry analysis
- Manufacturing strategies in the biopharmaceutical industry
- Managing contract manufacturing
- India and China - emerging outsourcing markets
Chapter 1 The contract manufacturing market
- Summary
- Introduction
- Overview of the global contract manufacturing market
- Current market drivers
- The expansion of the biopharmaceutical contract manufacturing market
- The reorganization of pharmaceutical production
- Case Study - Pharma manufacturing site close-down
- Growth in Offshoring - Asian CMOs becoming a global force
- Current market restraints
- Fewer new drug approvals
- The threat of overcapacity
- Increased competiton - low barriers to entry
- Conclusions
Chapter 2 CMO industry analysis
- Summary
- Introduction to biopharmaceutical manufacturing
- The stages of pharmaceutical development
- Primary manufacturing
- Secondary manufacturing
- Structure of the CMO industry
- Size of contract manufacturing organizations
- Does size really matter?
- CMO business models - evolving over time
- The advent of biopharmaceutical contract manufacturing
- CMOs focusing on early drug development stages
- The emerging full-service CMO business model
- Examples of CMO service offerings
- Lonza Group Ltd.
- Patheon Inc.
- Siegfried Group
- CMO Industry Outlook
Chapter 3 Manufacturing strategies in the biopharmaceutical industry
- Summary
- Introduction
- Strategic options for manufacturing
- Vertical integration - The business model of the past
- Drivers of vertical integration
- Benefits of vertical integration
- The deconstruction into a fragmented industry structure
- The shift towards outsourcing
- The make vs. buy decision
- Factors influencing the make vs. buy decision
- Mixed sourcing models
- The sale and leaseback model
- Examples of recent sale and leaseback deals
- The potential downsides of outsourcing
- Transaction costs of outsourcing
- Drivers of hidden costs in outsourcing
- Efficiency, effectiveness and flexibility, all in one outsourcing project?
- Outsourcing manufacturing is like buying commodities
- The need for a comprehensive contract
- Contracts do not matter
- CMOs are insurance companies
- The project is not the client' s problem anymore
- The first failure should be the last attempt
- Conclusions
Chapter 4 Managing contract manufacturing
- Summary
- Introduction
- Key factors in selecting and managing a CMO
- Sourcing CMO partners
- Defining the goals of outsourcing
- Writing a Request for Proposal
- The site visit - a critical step
- The Selection
- Managing the CMO relationship
- Technology transfer and scale-up
- The Design of Experiments (DOE) used for the scale-up process
- Challenges of the technology transfer process
- The importance of engineering runs
- Ensuring regulatory compliance
- The definition of responsibilities
- The importance of change control in contract manufacturing
- The Annual Product Review and other ways to ensure compliance
- Due Diligence - common pitfalls and how to mitigate the risks
- Avoiding faulty contracts and contractors
- Case Study - Pharmaceutical companies caught out by Inyx collapse
- Due diligence from a CMO perspective
- Risk management in the outsourced relationship
- The business risk
- The technical risk
- The CMO Relationship - A lifecycle model
- Stage 1 - Aligning relationship strategy with long-term business needs
- Stage 2 - Employing a structured evaluation and selection process
- Stage 3 - Building working relationships
- Stage 4 - Technology transfer and scale-up
- Stage 5 - Ongoing operations
- Stage 6 - Changes over time
- Awarding preferred provider status
Chapter 5 India and China - Emerging outsourcing markets
- Summary
- Introduction
- Contract Manufacturing in India
- Size of the Indian CMO market
- Patent situation and implications for foreign direct investment
- Challenges in current patent law
- India as a preferred offshoring destination
- The new, integrated business model of Indian CMOs
- Challenges facing the CRAMS business model
- Expansion strategies of India' s major contract manufacturing organizations
- Conclusions
- Contract manufacturing in China
- Drivers of the Chinese contract manufacturing market
- Challenges of the Chinese contract manufacturing market
- China' s regulatory framework
- Intellectual property protection
- Counterfeit drugs
- Case Study - China' s Heparin producers
- China' s major contract manufacturing organizations
- CMOs offering finished drugs services
- Biopharmaceutical contract manufacturing in China
- Conclusions
Chapter 6 Appendix
- Bibliography
- Index
List of Figures
- Figure 1.1: Size of the global contract manufacturing market, 2002-2011e
- Figure 1.2: Structure of the pharmaceutical API market, 2007
- Figure 1.3: Structure of the pharmaceutical API market, 2006
- Figure 1.4: Size of the contract biomanufacturing market, 2000-2008e
- Figure 1.5: Contract manufacturing providers across the service chain, India
- Figure 1.6: FDA approvals for NDAs and NBEs, 2000-2007
- Figure 1.7: Captial expenditures of top 15 pharma companies, 2004-2007
- Figure 2.8: Drug development and relevant milestones during the pharmaceutical manufacturing process
- Figure 2.9: Lonza' s life science platform
- Figure 2.10: Siegfried' s pipeline in 2006
- Figure 3.11: Change in pharmaceutical industry structure over time
- Figure 3.12: Categorization of varying degrees of integration
- Figure 3.13: Percentage of manufacturing output produced through CMOs, 2007 and 2010e
- Figure 3.14: Business objectives for moving to contract manufacturing
- Figure 3.15: Considerations influencing the make vs. buy decision
- Figure 4.16: Critical success factors for the manufacture of an early phase product
- Figure 4.17: Stages 1 - 6 of the CMO lifecycle
- Figure 4.18: Percentage of outsourcing dollars spent on preferred providers*(2007)
- Figure 4.19: How many preferred providers do you utilize?*(2007)
- Figure 5.20: Assessment of API manufacturing costs by region, 2005
- Figure 5.21: Size of India' s contract manufacturing market 2005-2010e
- Figure 5.22: Global outsourcing expenditure and segmentation of contracted services, 2005 and 2010e
- Figure 5.23: Size of China' s API Industry, 2005 and 2010e
List of Tables
- Table 1.1: Big pharma ongoing or recently completed manufacturing projects
- Table 1.2: New entrants in the pharmaceutical CMO market
- Table 2.3: Key characteristics of biotechnological and chemical API manufacturing (figures indicative only)
- Table 2.4: Summary of services offered by contract manufacturing organizations
- Table 2.5: Structure of the CMO industry
- Table 2.6: Mammalian cell culture capacity in the biopharmaceutical industry
- Table 2.7: Comparison of in-house production vs. outsourcing
- Table 2.8: Pros and cons of the ' one-stop shop' concept
- Table 3.9: Challenges for the pharmaceutical industry
- Table 3.10: The benefits of outsourcing
- Table 3.11: Examples of transaction costs
- Table 3.12: Drivers of hidden costs in outsourcing
- Table 4.13: Typical steps of an outsourced project
- Table 4.14: Definition of responsibilities for main quality areas
- Table 4.15: Risk-mitigation tactics for pharmaceutical companies
- Table 5.16: Selected contract manufacturing/ research deals in India as of July 2007
- Table 5.17: Strategic options for Indian pharmaceutical companies
