Andrew Warmington reports from the Pharma Outsourcing Best Practices Panel at Chemspec Europe
Practices make perfect
Andrew Warmington reports from the Pharma Outsourcing Best Practices Panel at Chemspec Europe
The Pharma Outsourcing Best Practices Panel took place for the last time at Chemspec Europe 2024 in Düsseldorf in June . Senior executives from the CDMO world gave their thoughts on the state of the sector in one session , and on resilience and sustainability in the second .
According to figures from IQVIA , the CDMO sector is growing faster ( 7.8 %/ year between 2020 and 2032 ) and will continue to grow faster than the pharmaceutical sector ( 6.3 %/ year ). The moderator , Dr Marianne Spaene , chief business officer for drug products and drug substances at Siegfried , asked if that was the actual lived experience of CDMOs , especially in small molecules .
Dr Jim Keay , VP of business development at Sustainable Sciences , noted that once the COVID ‘ bump ’ of added approvals is taken out , the forecast number of newly approved drugs over the next five years is roughly the same as the previous five , at around 250 . Most will be in North America , although China is a rising force in this field .
Cost always matters
In many ways , little has changed , in Keay ’ s view . The tale of the scientist who drew a triangle with the angles marked ‘ speed ’, ‘ quality ’ and ‘ cost ’, then asked the customer which two they wanted still applies . “ Once you have made the innovation , you are on the patent clock with a need to monetise it . It ’ s all about speed , speed , speed , speed . Once it ’ s launched , it ’ s about cost , cost , cost , cost ,” he said .
Now , however , cost is becoming a factor in the pre-launch phase . With the Inflation Reduction Act in place , the US government expects the discount on certain drugs to go up by 10 % over the next years . The pharma industry , which is expected to spend $ 2.3 trillion on development in that time , will want to recoup its losses .
“ It won ’ t come out of their marketing or their innovation . They are looking at the people in the middle . They will be coming to us , wanting everything both faster and cheaper ,” Keay said . In addition , Chinese companies will be looking more to the outside world .
Lihong Yu , chair of PHT International , agreed that it is ultimately about cost . The CDMO market is growing , but where pharma currently has a supplier base of 280 companies , their goal is to shrink this to about 30 . To be one of the companies that will absorb essentially all the growth will require having special technologies and the ability to help with customers ’ Net Zero goals . By contrast , Joachim Kaus , small molecule development manager and managing managing director in Germany
for Curia , said that he has yet to see pharma growing slower than CDMOs . As yet , little funding has been coming in from biotechs as projects have been delayed , though he expected that to change in 2H . There is indeed growing price pressure from Big Pharma . Pfizer alone has targeted cost savings of $ 4 billion , “ and at the end of the day , they will get it from the CDMOs ”.
A changing landscape ?
Siegfried , Spaene said , is seeing from pharma companies “ a wish to start earlier in the outsourcing process and to stay with that outsourcer ”. Instead of ‘ quick and dirty ’ service from CROs at the outset they are asking CDMOs to start in Phase I or II , and to be more cost-efficient . Will that mean a change in the landscape , with fewer CDMOs in the future , more M & A activity , or even the disappearance of CROs ?
“ I believe we will lose some smaller CDMOs and that there will be acquisitions . If you are not one of the 30 and don ’ t have special techniques , I am sure you will not survive ,” said Kaus . He expects this to happen within the next two years , even though there is no immediate sign of it .
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