Sizing Up CMOs

By Wendy Turner & Ninette van Lingen, Life Science Leader magazine

As the pharmaceutical industry grapples with tempered global sales and growth projections, industry analysts project that outsourcing of pharmaceutical manufacturing will exceed $26B by 2011, an increase of 8% each year.

This upsurge in pharmaceutical outsourcing is driven by the emergence of biotech operations lacking internal capacity, as well as midsize and large pharmaceutical companies seeking access to innovative processes and production technologies, such as for parenteral drug manufacturing. Greater reliance on outsourcing also is allowing companies to adopt leaner business models and to manage supply chains more efficiently.

Whether a pharmaceutical company considers outsourcing either as a short-term solution or a long-term liaison, the choice of CMO can influence the company’s bottom line and ongoing relationship with its customers. Evaluation of potential outsourcing partners should include the infrastructure requirements, market demand, and potential ROI, as well as the CMO’s corporate culture, experience, safety record, regulatory history, and customer focus, among other factors. Choosing the right CMO and putting in place practices that facilitate a collaborative working relationship will help ensure the project is a success for both parties.