As CDMOs seek to diversify their business models, is a full-service offering the holy grail or is there a danger of biopharmaceutical outsourcing firms becoming the jack of all trades and the master of none?
For CDMOs the customer is always right. And this is a challenge because drug industry demands are as varied as they are complex. In short, one size definitely does not always fit all.
In general, contractors try to meet these demands either by offering a broad range of services, covering everything from process development through to fill-finish – so-called “one-stop-shops” - or they specialize in an effort to carve out a niche.
Diversity
Both approaches have potential advantages for customers but choosing whether to work with a one-stop-shop or a specialist should depend on the specifics of the project and type of product being made, says George Ntoras, partner at Fuliginous Management Consulting.
“For conventional products like small molecule tablets, liquids, even injectable products, which usually are less complex and less expensive compared to biologics, it’s easy for a CDMO to offer everything in house.
“So, since it is relatively easy, competition has forced CDMOs to go towards the one-stop approach. And this is something that is appreciated by pharma companies outsourcing their products.”
Contract management
The one-stop-shop model is particularly useful for pharmaceutical companies looking to outsource multiple small molecule drug products, Ntoras says, because of the opportunities to simplify supplier management.
“Imagine for example a pharma company that has 20 products to outsource. If there is a one-stop-shop offer approach for all products, the maximum number of CDMOs that it will have to handle is 20 assuming that every product goes to a different contractor.
“If on the other hand, for each product, the pharma company has to split the activities to 2 steps and different CDMOs, then the maximum number of CDMOs that it will have to handle is 40. So, complexity is higher.”
Complex products
For biopharmaceutical products – the production of which is usually more complicated, requiring different specialist skills at various stages of the process – the one-stop-shop model may not always be suitable.
“For Biologics, cell and gene therapies, vaccines, antibodies etc, where things are much more complicated and expensive, it might make sense to split some activities if a specific CDMO is dedicated to these and can perform them better and at a better cost,” Ntoras says.
However, in recent years, some larger CDMOs have developed sufficient expertise across multiple aspects of biopharmaceutical manufacturing and, according to Ntoras, such propositions may be worth considering.
“The risk for the pharma company in biologics is much higher and amounts paid for developing and producing a product can be maybe five to ten times higher than conventional products. But, if a reliable CDMO can perform everything in house and at good quality and price, then in my opinion he has an advantage vs someone that cannot.”
Cost is always a consideration, Ntoras says: “Usually, one stop offer shop refers to development and manufacturing. So, if a pharma company can find one CDMO that can do both, it is easier and usually cheaper.”
Multiple markets
Larger, one-stop-shop CDMOs can also help to provide drug developers with access to emerging markets more easily that smaller, focused specialists, says Achim Newrzella, vice president of consulting organisation, Results Healthcare.
“Western CDMOs have mainly used manufacturing footprint in emerging geographies to supply Western customers at a lower cost base, but we are seeing a gradual shift away from this,” he says. “For example, Lonza is expanding injectables fill/finish capacity at its Guangzhou biologics site in China that will be used to supply exports as well as the domestic market and Recipharm recently announced the establishment of a new fill/finish facility in Morocco with significant investment from the government to supply vaccines and biotherapeutics to Africa.”
Newrzella cites China as an example of a market where demand fo...
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