Parenteral Manufacturing

The market outlook for parenteral contract manufacturing finds itself caught between two versions of the immediate future. One scenario looks at new cancer drugs and the considerable number of biologics in late-stage testing and predicts a parade of new products, the equivalent of on-the-red-carpet attention and spiraling, higher demand. The other, frequently described by the CMOs themselves, sees steady increases over the next few years from several contributing areas, with figures more in line with the segment’s traditional, modest rates of growth. Tom Polen, senior director of marketing at Baxter Biopharma Solutions, points to the driving trend of the outsourcing of previously approved molecules, and sees growth in approved molecules from 31% to 35% by 2010. He also sees a major change in orientation.

“Companies are focusing more on driving strategic differentiation,” Mr. Polen told Contract Pharma. “We’re seeing the end of these blockbuster drugs. It’s more and more difficult to find that billion-dollar plus drug. So companies are investing more and more into R&D pipelines to find that valuable molecule. They’re investing more into sales and marketing to build strategic differentiation. In the pharmaceutical industry, manufacturing is not something that, when you invest in it heavily, it creates strategic differentiation. Companies are choosing to divert that money from fixed assets and manufacturing, and reinvest that money into the pipeline or sales and marketing activities.”

When a predilection for reinvestment in other areas becomes combined with the influence of regulatory scrutiny, outsourcing becomes an attractive choice for companies of every size and shape, from virtual companies to large pharmas. The majority of CMOs we spoke to for this article claimed a wide variety of clients. Further, outsourcing parenteral manufacturing is a decision that may become even easier if pressure from regulatory agencies grows in the way most expect. Steve Meeker, director of site development, Bayer Health Care, commented, “I think the availability of the provider in the industry is really on the decline, and I think the regulatory requirements and the enforcement of those known requirements are going to increase.”

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