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Contract Manufacturing Organisations (CMOs) and pharmaceutical manufacturers come together to enhance the manufacturing efficiency as well as revenue.
FREMONT, CA: Contract manufacturing organizations (CMOs) have witnessed tremendous uptake during the last decade and are expected to continue their growth at about 7 percent over the coming years. Outsourcing the manufacturing functions help biopharma companies to reach the market early, free up the resources and facilities, and emphasize more on the center business, which will reduce the costs of the drugs.
CMO's business model has also undergone a huge shift. They are no longer just a one-off manufacturing option but is also considered as an integral part of the supply chain of biopharma organizations.
While the major pharma companies continue to take the lead to be significant contributors to the growth of the contract manufacturing market, contributions from biotechnology
organizations will also improve. With more biotech firms emerging, there will be a higher demand for contract manufacturing. This is because outsourcing the manufacturing function will enable the biotech firms to initiate their products in the market without having invested in building or enhancing their manufacturing units.
A major reason for the significant expansion of contract manufacturing services is an enhancement in the development of biologics. As biologics developers frequently rely on drug development, they prefer to outsource the manufacturing part.
Contract manufacturing is seeing growing uptake in China, mainly because biosimilars and evolving drugs are entering the clinical pipeline and reaching a commercial scale. More prominent biopharma companies prefer to outsource manufacturing in spite of having well-established Good Manufacturing Practice (GMP) grade facilities to minimize the cost. One strategy involves outsourcing existing biopharmaceutical products like the interferons, insulin and growth hormones. On the other hand, these biopharma giants can also sometimes partner with manufacturing organizations in countries like China.
Biopharma companies opt to outsource manufacturing mainly to reduce costs and increase focus on their core business. On the other hand, emerging biotech firms are financially insufficient to establish GMP-grade facilities and hence choose to partner with CMOs.
Considering the trade war between the U.S. and China and low labor wages, India is the most preferred partner nation for pharma companies looking to outsource manufacturing. Additionally, the increased focus on the development of biologics and use of biosimilars make outsourcing to CMOs the most feasible option.
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