So far, 2024 has been a roller coaster for the pharma industry. We’ve seen layoffs, recalls, outbreaks, criticism of weight-loss drugs—and we still have three-quarters of the year to go. However, within the pharma industry, CDMOs are emerging stronger than ever.
The CDMO market is poised to outspace overall pharma growth through 2028 as contract manufacturers continue to be popular options for therapeutics companies. It’s an exciting time in our space, and despite the grim headlines that seem to drag down the rest of the pharma and biopharma industries, CDMOs have a bright future.
For anyone who missed the following articles, I thought I’d share a handful of the most interesting recent trends in the news. I’m anticipating that CDMOs will see more of the same in the coming years.
Pharma Outsourcing
More pharmaceutical companies, both large and small, are outsourcing their drug projects, from development and scaling through commercialization.
Pharmaceutical Manufacturer named collaborations with CDMOs and CROs as one of their top trends for 2024. Part of that is driven by a post-COVID world, where companies are so frustrated with supply chain disruptions that they’d rather hand off the logistics to contractors. The article also points out that outsourcing is becoming a smart financial choice. As R&D spending climbs higher than ever, companies are choosing to outsource their work to CDMOs, like Neuland, to access specialty skills and increased capacity.
Over at Contract Pharma they said the same thing. Their #1 trend for 2024 was an accelerated shift toward CDMOs. They agreed that CDMOs offer operational efficiency because they’re essentially a one-stop shop for everything from development to scale and manufacturing to commercialization.
However, this article also points out that CDMOs are part of a larger cultural shift toward collaboration. Rather than strict and guarded in-house work, companies are working with CDMOs because these contractors have more varied industry experience. By working together, companies and contractors are forming strategic partnerships that foster collaboration and resource-sharing.
Digital transformation and automation
Last year, McKinsey published an incisive piece outlining the possibilities that digital transformation offers the pharma industry. The information is especially relevant for CDMOs.
McKinsey’s article suggests that one of the biggest changes that automation and AI will bring to pharmaceutical companies is more efficient operating models—including vendor consolidation, which means CDMOs will need to have clear value propositions to offer drug companies.
Another digital change is machine learning operations (MLOps), where machine learning models can efficiently build and reuse code. This strategy helps companies scale AI throughout their organizations. With MLOps, companies can identify more efficient ways of producing drugs, be more compliant with regulatory standards, automate manual tasks, reduce cycle time, and reliably test products for conformity. This is the chance we’ve all been waiting for to massively scale up our capabilities.
Digital transformation is offering pharma companies more possibilities than ever, ranging from cutting-edge ideas to more efficiencies like streamlined document management systems, e-signatures, and project management.
Sustainability
We can all agree that sustainability is a massive trend across almost every industry, but it’s increasingly important in the pharmaceutical world because of the high amount of waste produced. Sustainability is top of mind for the industry not only because of customer demand, but also because government and legal requirements are restricting emissions – and rightly so.
Some organizations, like NHS England, are now telling suppliers and contractors—including CDMOs—that they won’t contract with them unless they’re on track to become net-zero with carbon emissions by 2045. At Neuland, we have already embarked on our journey towards Net Zero carbon neutral across our internal operations. If a CDMO wants to work with top-tier organizations, they’ll have to prove that they can support companies’ CSR goals for sustainability, emissions, water waste, electricity usage, packaging waste, and more.
In the case of complex APIs that require micronization, this may be a particularly relevant trend you need to read up on. According to Pharmaceutical Technology, about 30% of all APIs now require micronization to improve bioavailability. While it’s more efficient for the human body to absorb, for the manufacturers, it’s an electricity- and energy-consuming operation. Traditional methods like jet milling or power milling may need to be abandoned in favor of more energy-efficient techniques.
Agile manufacturing
Agile processes
and a “DevOps” mindset are no longer just for the tech industry. This streamlined and nimble approach to operations will be beneficial to the pharma industry, and especially for regulatory teams.
Agile manufacturing can also benefit regulatory teams. By making internal processes more efficient, regulatory teams can speed up approvals while still staying compliant. As regulatory teams collect data to send to regulatory agencies, they can use that data to find trends and make the business more efficient.
Becoming agile by investing in new technology may be an up-front investment, but it’s well worth the cost. Pharmaceutical companies, including CDMOs, can future-proof their organizations by implementing agile practices now. There’s no doubt that at the pace of technology, industry changes will continue to come faster.
In January 2024, Express Pharma shed light on how implementing agile practices prepares companies to adapt quickly when they encounter challenges such as pricing pressures, stricter regulations, steep competition, climate concerns, and supply chain localization.
Beyond any single company, the entire pharmaceutical industry is trending toward working with CDMOs as a way to become more agile. Drug Development and Delivery points out that companies are becoming more agile by implementing more collaborations and contracts to support increasingly complex drug pipelines.
With a bigger network, companies are more resilient against supply chain disruptions and raw material shortages. Using contract manufacturers also allows drug companies to take advantage of a CDMOs different areas of expertise such as, manufacturing, inventory management, and quality control.
You can check out Neuland’s blog post on the advantages of choosing an agile API contract manufacturer as a way to keep your organization nimble and ready to handle hurdles in getting your drug to market.
What do these trends mean for you?
If you haven’t checked off all these trends from your company’s to-do list, don’t worry—you’re not alone. Neuland helps companies adapt to industry trends while executing on your drug projects. Our expertise ranges from research and development, manufacturing, and intellectual property to quality assurance and project management. If you want to level up your pharmaceutical manufacturing by partnering with a cutting-edge CDMO, contact Neuland today.
