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The Pharmaceutical Contract Manufacturing Marketplace

Outsourcing pharmaceutical production is not new, and the benefits to big pharma companies are well documented. However, rapid changes in the kinds of drugs, the delivery technologies they will require, the expertise to scale-up new biopharmaceuticals, and even changes in capacity demand are all on the horizon for the contract manufacturing marketplace. One thing is for certain, contract manufacturing organizations (CMOs) will need to adapt to the changing needs of the pharma industry in the new age of drug discovery.

This research study on the status and outlook for pharmaceutical outsourcing is looking into such pressing issues as:

  • current and future capacity and demand
  • delivery and production technologies that CMOs will need to master
  • the state of "manufacturing R&D"—the research into effective scale-up
  • the demands of government and industry partners in the QC realm
  • the effects of industry trends, such as consolidation and specialization

Kalorama has conducted scores of interviews with executives and engineers at pharmaceutical companies and at CMOs to validate projections and to assess expectations and on both sides of this large and important marketplace.


Scope and Methodology

This report analyzes the state of the manufacturing segment of the pharmaceutical outsourcing business, reporting figures on the three key markets of North America, Europe, and Japan. The report profiles several companies involved in marketing their manufacturing services to the pharmaceutical companies, including Quintiles, Cammbrex, Genzyme, and others. The report generally reviews the nature and direction of where the pharmaceutical contract industry, specifically contract manufacturing, is headed and the challenges it faces. Discussions of contract research work, while not the focus of this report, are included in some areas because they represent a more mature model of outsourcing in the pharmaceutical industry as a whole and can be instructive.

Market forecasts are based on an examination of current market conditions and on investigations into the development of new products by key suppliers. This information also is weighted with projected timing and the probability of receiving FDA approval to market products. The information is the result of data gathered from company product literature and other corporate brochures and documents, as well as information found in the scientific and trade press. In addition, multiple interviews were conducted with key company executives and industry analysts. Research was conducted from June 2001 to November 2001.

Press Released

Capacity Crunch Drives Pharmaceutical Manufacturing Outsourcing Growth

New York, January 7, 2002 /PR Newswire — Contract manufacturing in the pharmaceutical industry will experience double-digit growth for the foreseeable future, according to a new study released today from Kalorama Information and available at MarketResearch.com, and a coming scarcity in manufacturing capacity will be a major factor in the upsurge in global outsourcing activity.

According to the new study, The Pharmaceutical Contract Manufacturing Marketplace, the global pharmaceutical outsourcing market stands at approximately $8 billion. However, the tsunami of new chemical entities in the pipeline, especially the huge number of biopharmaceuticals in development, will help to push the size of the market well past the $10 billion mark in less than three years as traditional manufacturers realize that capacity and specialized expertise are in short supply.

“Biomanufacturing capacity is definitely on everyone’s mind,” notes Steven Heffner, Acquisitions Editor for Kalorama Information. “But our research doesn’t necessarily indicate the dire shortfalls in capacity that some analysts have been predicting. We believe there are too many variables in the late-stage development process to assume the worst.”

In addition to the overall growth in outsourcing dollar volume, the number of pharmaceutical contract manufacturing organizations worldwide also continues to grow, according to the study. And the spectrum of services offered and the geographic spread of contract organizations also continues to widen as virtual pharmaceutical companies with more manufacturing needs become more common. The report examines these and other market trends, especially the importance of long-term strategic partnerships as the outsourcing industry matures.

1. Executive Summary


    The Nature of Pharmaceutical Contract Manufacturing
    Scope and Methodology
    State of the Marketplace
    Market Forces
    Size of the Market
    Geographic Variation
    Key Players

2. Introduction and Overview


    The Need for Outsourcing
    Structured Processes Along the Chain of Development
    Risk Reduction
    Competitive Advantages
    Product Scalability and Quality Issues
    Managing Several Products Simultaneously
    Reasons Not to Contract Out
    Regulatory Compliance
    Types of Contract Organizations
    Central Laboratories
    Preferred Suppliers
    Services Offered
    GMP Capabilities

3. Drivers and Trends


    Drivers of Market Growth
    Capacity Issues
    A Changing Environment
    Division of Knowledge and Time to Market
    Technology
    Growing Number of New Pharmaceuticals
    The Virtual Company in the Market Place
    Challenges and Obstacles
    Multi-Product and Technology Challenges
    Determining Manufacturing Requirements
    Outsourcing Trends in Research and Development
    Long-Term Partnerships
    Impact of Genomics
    Time-to-Market Pressures
    Biomanufacturing
    Protein Manufacturing Capacity Issues
    Monoclonal Antibody Production Stretched
    Demand Outstripping Supply
    New Facilities
    Smaller CMOs May Benefit
    Lyophilization
    The European Picture
    Calculating Capacity
    Transgenics
    Scalability Issues
    Regulatory Concerns
    Trends in the Overall Size of the Contract Manufacturing-Outsourcing Market
    Strategic Conclusions
    Preferred Contractors

4. The Marketplace


    Market Size
    Overall Market
    Biopharmaceuticals
    Selected Segments
    Competive Landscape
    Key Players and Preferred Suppliers

5. Company Profiles


    Abbott One 2 One
    Akorn Inc.
    Albany Molecular Research Inc.
    Alpharma USPD Inc. Contract Manufacturing
    Alza Corp.
    Aurobindo Pharma Ltd.
    Avecia Ltd.
    Ben Venue Laboratories Inc.
    BioReliance Corp.
    BioSpecialties Australia Pty Ltd.
    Burron OEM Division
    Cambrex Corp.
    Cardinal Health Inc.
    Catalytica Inc.
    ChemFirst Fine Chemicals Inc.
    Chesapeake Biological Laboratories Inc.
    Collaborative Group
    Cook Pharmaceutical Solutions (Baxter Healthcare Corp.)
    CP Pharmaceuticals Ltd.
    DPT Laboratories Ltd.
    DSM Biologics
    Lancaster Laboratories
    Matrix Contract Services (Matrix Pharmaceutical Inc.)
    MDS Pharma Services
    Meristem Therapeutics
    Mova Pharmaceutical Corp.
    Patheon Inc.
    Pharbil Technologies
    Pharm-Eco Laboratories Inc.
    Quintiles
    Rhodia ChiRex Inc.
    SP Pharmaceuticals LLC
    West Pharmaceutical Services
    Appendix: Company Directory

List of exhibits


    Table 2-1: Reasons for Outsourcing Activity
    Table 2-2: Research Outsourcing Expenditures, 1997-2000
    Table 2-3: Issues Facing Contract Manufacturers
    Table 2-4: Reasons for Not Using Contract Manufacturing Services
    Table 2-5: Important Manufacturing Issues for Contractors
    Table 2-6: Types of Industry Suppliers
    Table 2-7: Services Offered by Contract Manufacturers
    Table 2-8: GMP Issues for Contract Manufacturing
    Table 3-1: Average Number of Units Required for Clinical Trials by Phase
    Table 3-2: Biomanufacturing Capacity Relationship to Value of Product Produced
    Table 3-3: Capacity Required for Biomanufacturing Market
    Table 3-4: Issues Facing Transgenics Contract Manufacturing
    Table 3-5: Potential Strong Growth Areas for Contract Manufacturers
    Table 4-1: World Market for Pharmaceutical Outsourcing, 2001-2005
    Table 4-2: U.S. Market for Pharmaceutical Outsourcing, 2001-2005
    Table 4-3: European Market for Pharmaceutical Outsourcing, 2001-2005
    Table 4-4: Japan-Asia Market for Pharmaceutical Outsourcing, 2001-2005
    Table 4-5: World Market for Biopharmaceutical Outsourcing, 2001-2005
    Table 4-6: World Demand for Lyophilization, 2001-2005
    Table 4-7: Leading Pharmaceutical Contract Organizations
    Figure 4-1: World Market for Pharmaceutical Outsourcing, 2001-2005
    Figure 4-2: U.S. Market for Pharmaceutical Outsourcing, 2001-2005
    Figure 4-3: European Market for Pharmaceutical Outsourcing, 2001-2005
    Figure 4-4: Japan-Asia Market for Pharmaceutical Outsourcing, 2001-2005

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