Cost Savings Reason for 60% of Outsourced Pharma and Bio Manufacturing

June 2, 2011
U.S. largest regional market for contract manufacturing.

While 54.5% of pharma and biopharm companies outsource less than half of their global manufacturing, 18.2% currently use outsourcing for at least 91% of their output, according to a recent survey by Pharma IQ.

Interestingly, the U.S. represents the largest regional market for contract manufacturing. Europe comes in second with future growth expected from developing regions, especially Asia Pacific. "The Japanese market for pharmaceutical contract manufacturers is projected to register annual growth rate of 12.8% during the next four years," according to the study.

An earlier report from Global Industry Analysts predicted that the global pharmaceutical contract manufacturing market would reach a total value in excess of $40.7 billion by 2015.

The key factors driving such expansion included soaring demand for new drugs, increasing need for R&D productivity and efficiency, as well as the desire to make cost savings where possible. Another reason is that many pharma and biotech companies simply lack sufficient manufacturing capabilities internally. In fact, the Pharma IQ research found that 70% of organizations cite lack of internal capacity as the number one reason for outsourcing some or all of their production. A shortage of expertise (45%) was listed a major reason for outsourced manufacturing.

With regard to product type, the manufacture of finished form medicine is most commonly outsourced (7.27%), while 36.4% produce APIs and 31.8% manufacture biopharmaceuticals through external means.

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