India has a strong presence in the pharmaceutical industry’s contract development and manufacturing organization (CDMO) segment. Since India offers world class quality for pharma products at a low price, contract manufacturing is among the fastest expanding areas of the pharmaceutical business. Contract manufacturing for pharmaceuticals requires the use of innovative technologies to keep up with changing market trends. Today, the emphasis is on building resilience in supply chains with multiple facilities across locations to meet the rising and unprecedented demand. According to MarketsandMarkets, the worldwide pharmaceutical contract development and manufacturing market is expected to grow at a CAGR of 7.7% from USD 100.7 billion in 2020 to USD 146.1 billion in 2025.
The ever-expanding demand for generics, increased pharmaceutical R&D spending, and CDMO investments in sophisticated production methods are some of the factors driving the growth of CDMOs today. Based on insights, let’s take a closer look at some of the trends and opportunities that will shape CDMOs in 2021 and beyond.
Healthcare advancements driving facility divestment
The facility divestments of pharma firms shall impel outsourcing as well as contracts for products that will become generic or non-core, and novel product manufacturing where the pharma business lacks the manufacturing capabilities or knowledge. CMOs have been increasingly acquiring or building biologics capabilities and capacity; however, because the majority of biologics and advanced therapeutics are marketed by larger market cap companies that are less likely to outsource, CMOs will have to find ways to entice these companies to achieve a good return on investment. According to the GlobalData Drugs database, about 3,000 gene therapies and gene-modified cell therapies are in the pipeline, ranging from discovery to preclinical to clinical and pre-registration stages.
This is a significant number compared to the few advanced therapy pharmaceutical products that have been approved so far, indicating that a new wave of commercial advanced therapy medicinal products (ATMPs) are on the way These medicines’ current production processes are inefficient and unsuitable for commercialisation.
As volumes increase, the capacity to manufacture these products on-scale is going to fall short. Presently, we are already witnessing a significant shortage of critical pharma products in certain geographies. The CDMO, biopharma, and life science service industries are aiming to improve ATMP manufacturing processes, which include automation, modular facilities, improved upstream titers, and better downstream purification technologies.
Need for better controls
While time and money savings can be garnered via multi-product facilities, this approach comes with its own set of problems, the most serious of which is the potential of cross-contamination. While contamination issues have long existed, the growing practise of outsourcing has heightened the need for improved controls. Further, many of these facilities are modified and old, and can pose a health risk. Such old facilities can also limit flexibility and adaptability, making one-way product flows difficult to construct. Because the pharmaceutical business is under such intense pressure to create life-saving drugs swiftly and cheaply, maintaining the aseptic process under such tight deadlines can be a challenge.
An overall approach for the pharmaceutical industry to overcome these challenges—and to protect product integrity and safety today and in the future—is to engage in future-oriented facility and equipment design. When it comes to facilities, pharmaceutical companies get the best return on investment by creating state-of-the-art facilities that can accommodate numerous processes. According to the EY and FICCI Indian Pharma report, as one of the top ten industries in lowering trade deficits and attracting foreign direct investment, the pharmaceutical industry has made a substantial contribution to India’s economic growth (FDI). Between April 2000 and June 2020, the medications and pharmaceuticals sector received a total of US$16.54 billion in FDI.
The road ahead
The evolution of CDMOs across geographic locations is a reflection of the significant advancements made by the pharma sector. They will play a critical role in ensuring that pharma innovation, accessibility, and affordability are on par across geographies. However, this needs a holistic approach by key stakeholders in the industry.