Biopharma Driving Surge in Contract Pharmaceutical Manufacturing

The sheer numbers of biologics in the pipeline are impelling drug makers to outsource specialized production rather than build new plants. Medical market research publisher Kalorama Information (New York, NY, USA), a market research company, estimates the market for contract manufacturing of prescription drugs will exceed US$30 billion in 2008, which represents an increase of 10% from the prior year, which represents an increase of 10% from the prior year.

The two fastest growing sectors in the contract manufacturing market are biomanufacturing and secondary manufacturing, according to market analyst from Kalorama. The expansion of biotech-derived protein and peptide drugs, antibiotics, and chemotherapeutic agents administered as sterile injectable drugs is creating a robust business for sterile secondary contract manufacturing, as these processes are often not included in the core competency of pharmaceutical and biotech drug makers.

While the primary contract manufacturing organization (CMO) sector, which includes active pharmaceutical ingredients and chemical intermediates, is plagued by overcapacity, reduced drug output, and a highly competitive landscape, the secondary CMO sector is enjoying strong growth, due in large part to the great demand for sterile manufacturing. As a result, many CMOs are expanding their capabilities to include biopharmaceutical facilities. They are also turning to smaller emerging drug companies for new business and must, therefore, change their business model, as their needs are different and they outsource many activities major drug companies do internally, according to at Kalorama market analysts.

"Cost is important, but so are speed and flexibility,” said Bruce Carlson, publisher of Kalorama Information. "Pharma companies that want to pursue specialized niches, complicated drug delivery, and/or biologic drugs will have to contact a CRO [contract research organization].”

Kalorama Information supplies the latest in independent market research in the life sciences, as well as a full range of research services.

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