Frost & Sullivan Research Service   Published: 17 Aug 2005
Global Pharmaceutical Contract Manufacturing Markets
  SERVICE HOMEPAGE
RESEARCH OVERVIEW BENEFITS OF THIS SERVICE MARKET SECTORS
TECHNOLOGIES LIST OF FIGURES WHAT'S INCLUDED
TABLE OF CONTENTS ORDERING INFORMATION FURTHER INFORMATION
   Research Overview
 

Cost Pressure and Need for Greater Productivity Fuel Market Growth

The global pharmaceutical industry is witnessing rapid advances in processes and technology, and automation is emerging an integral part of most manufacturing processes. With stricter regulatory norms and spiraling costs, pharmaceutical companies are opting to outsource their manufacturing process to contract manufacturing organizations (CMOs) in order to improve efficiency and productivity. In catering to this growing demand, CMOs are offering strategic value-added services such as process development, marketing support, process optimization, and life cycle management, thereby integrating themselves in the supply chain of the pharmaceutical companies.

This Frost & Sullivan research service examines the global pharmaceutical contract manufacturing markets. It discusses the prevailing market drivers and challenges and presents strategic recommendations to ensure success in these highly competitive markets. The study further examines key trends across global regions and sub-segments, such as injectables, as well as solid and liquid dosage forms, to help identify growth opportunities.

Entry of Biopharmaceuticals and Specialized Processes such as Lyophilization Drives Market Expansion

The pharmaceutical contract manufacturing market is moving beyond providing traditional services, and is focusing on tapping the large demand for specialized niche technologies. CMOs have been building state-of-the-art facilities that rival those of pharmaceutical companies and are constantly upgrading them to enable novel manufacturing processes. The anticipated influx of biopharmaceuticals, especially oncology products and sterile injectables, is likely to create huge opportunities for specialized manufacturing technologies that are not available with pharmaceutical and biopharmaceutical companies. Lyophilization is another process that is in huge demand in the biopharmaceuticals segment, as it requires a high degree of automation.

Pharmaceutical companies are increasingly adopting the concept of ‘virtual pharma’, wherein they retain the marketing rights while outsourcing all manufacturing activities and related processes. This allows companies to deliver goods to the market at a faster rate than an internal plant would allow. "With CMOs offering development services, outsourcing offers pharmaceutical companies a better value proposition while ensuring growth," says the analyst of this research service. "The emergence of ‘virtual pharma’ as a successful, risk-sharing business model in comparison to the present big pharma, ‘blockbuster’ model is likely to be a major driver for the pharmaceutical contract manufacturing markets."

Manufacture of Injectables offers Good Growth Potential

Several biopharmaceuticals are presently in the late developmental stage and their imminent approval could see a wave of new products enter the market. These bio pharmaceuticals include sterile injectables and oncology products, which are the largest product segments among biopharmaceuticals. With biopharmaceutical companies looking to narrow their focus to research and development, there is likely to be an increased demand for higher manufacturing capacity in sterile vials and syringes. Although the manufacture of injectables presently constitutes the smallest segment in the pharmaceutical contract manufacturing markets, the increased demand for sterile products, especially injectables, is expected to drive the this segment across the globe.

The underlying cost of building new manufacturing plants across regional boundaries as well as complying with differing regulatory environments and requirements are encouraging the outsourcing of manufacturing and related processes among pharmaceutical and biopharmaceutical companies. "While North America is the market leader in terms of revenue share, followed by Europe, it is Asia that is expected to show strong growth due to the huge manufacturing capacity available in the region," says the analyst. "Among the dosage forms, solid dosage forms are continuing to lead revenue contribution, whereas liquid dosage forms are expected to lose their market share to injectables that primarily include sterile products and biopharmaceuticals (primarily oncology)."

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To maximize the potential for growth within a firm’s internal and external environment, Frost & Sullivan consultants can facilitate the creation of strategic programs that deliver improved market success. Frost & Sullivan’s strengths lie in combining strategic understanding with market expertise and applying these with absolute commitment to its clients’ growth.

   Benefits of this Service
 

Competitive Strategies to Exploit Opportunities and Maintain Growth

A section on region-wise strategic recommendations for the global pharmaceutical contract manufacturing markets provides valuable information on the possible growth opportunities, untapped growth potential, and competitive strategies that companies can use to gain profits. For regions of high growth such as Asia, this study also includes a suggested step-by-step process to start operations.

Emerging Technologies Signify Market Base Expansion and Offer Tremendous Growth Opportunities

Emerging technologies, which could have a positive impact on the growth of the markets have been discussed at a global level and have also been included in the strategic recommendations section at the regional level. For example, lyophilization is likely to have a strong impact on the demand side, especially with a large number of biopharmaceuticals in the pipeline.

Recommendation to Optimize Supply Chain

One of the key challenges to achieving competitiveness in the pharmaceutical industry is the management of the supply chain. This study covers certain aspects of the pharmaceutical supply chain, which can be optimized by utilization of the services of contract manufacturing organizations.

Information to Decrease Time to Market Product

The time to market of a particular product is one of the key underlying factors behind the profitability of a company. In the pharmaceutical industry, a delay of even a day while getting a product to the market can cost the company millions of dollars. As a result, achieving the quickest possible time to market is a key challenge for companies. Contract manufacturing organizations strive to address this challenge. This study provides information on the business models of the contract manufacturing organizations and offers strategies to leverage on their capabilities and expertise.

Market Strategies to Enter Growing Asian Markets

The Asian market for contract manufacturing is forecast to show extremely high levels of growth across all market segments. Pharmaceutical and biopharmaceutical companies are looking to leverage the vast talent pool and cost savings offered by these Asian countries. The study provides strategies recommendations for entering these markets.

   Market Sectors
 

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

By application:

  • Injectables
  • Solid dosage forms
  • Liquid dosage
   Technologies
 

The following technologies are covered in this research:

  • Current good manufacturing practice (CGMP): These are the basis principles, procedures and resources required to ensure an environment suitable for manufacturing products of an acceptable quality.
  • Contract manufacturing organization (CMO): A company offering manufacturing services with capacities ranging from small volumes for pre-clinical processes to larger volume for full-scale commercial manufacturing.
  • Active pharmaceutical ingredient (API): These are either substances or a mixture of substances used in the manufacture of a drug product, which becomes an active ingredient of the drug. APIs are intended to cause pharmacological activity or other direct effects in the diagnosis, cure, mitigation, treatment, or prevention of diseases or to affect the structure and function of the body.
  • Dosage form: Refers to the form in which the drug is delivered to the patient. Dosage forms include parenteral, topical, tablet, oral (liquid or dissolved powder), suppository, inhalation, and transdermal.
  • Fill and finish: These are secondary elements of the drug manufacturing process, which includes formulation, vial preparation, filling, capping, and inspection.
  • Generic drug: Drug product sold under a branded drug’s chemical name, following the expiration of the pertinent patents to the branded drug. Drug patents are issued for up to 20 years from time of filing. The active ingredients in the branded and generic products are the same. Both the branded and the generic versions must have the same potency, be available in the same dosage forms (i.e. tablet, liquid, injectable), be demonstrated safe and effective, and be manufactured under government-approved GMPs.
  • Lyophilization: Also known as freeze drying, lyophilization is a means of stabilizing wet substances by freezing them, then evaporating the resulting ice, to leave a substantially dry, porous residue which has the same size and shape of the original frozen mass
   What's Included
 
  • Detailed insights into the global pharmaceutical contract manufacturing markets
  • Market forecast across segments and geographic location
  • Market drivers and restraints
  • Strategic recommendations
  • Technology trends
  Table Of Contents

1. Executive Summary
        1. Executive Summary
                1. Executive Summary

2. Total Market
        1. Market Overview and Revenue Forecast
                1. Introduction
                2. Market Segmentation
                3. Research Methodology
                4. Technology Trends
                5. Revenue Forecasts
        2. Frost and Sullivan Awards
                1. Growth Strategy Leadership Award
                2. Competitive Strategy Leadership Award
                3. Best Bang for the Buck Award

3. North American Pharmaceutical Contract Manufacturing Markets
        1. Market Overview
                1. Introduction
                2. Market Engineering Measurements
        2. Market Drivers Restraints and Strategic Recommendations
                1. Market Drivers
                a. Capacity Issues with Big Pharma and Generic Drug Manufacturers Encourages Outsourcing
                b. Uncertainty over Success of New Product Launch Promotes Contract Manufacturing
                c. End-to-End Services provided by Contract Manufactures offer Shortest Time-to-Market Products
                d. Technology Expertise of Contract Manufacturers Facilitates Outsourcing of Technology Intensive Processes at Lower Cost
                e. Emergence of Partnerships with Contract Manufactures Increases Confidence Among Pharmaceutical Market Participants
                f. Large Number of Branded Drugs going Off-Patent Likely to Boost Demand for Manufacturing
                2. Market Restraints
                a. Limited Capabilities of most CMOs discourages Outsourcing
                b. Stringent Regulatory Environment increases risk for CMOs
                c. Smaller Size of Outsourced Contracts does not offset Fixed Cost of Owning Assets
                3. Strategic Recommendations
        3. Revenue Forecasts and Competitive Structure
                1. Injectables
                2. Solid Dosage Forms
                3. Liquid Dosage Forms
                4. Total Market
                5. Competitive Structure

4. European Pharmaceutical Contract Manufacturing Markets
        1. Market Overview
                1. Introduction
                2. Market Engineering Measurements
        2. Market Drivers Restraints and Strategic Recommendations
                1. Market Drivers
                a. Increase in Number of Generic Drugs is Likely to Boost Core Business
                b. Over Capacity with Big Pharma and Generic Companies Drives Outsourcing
                c. Emergence of Virtual Pharma Creates Demand for Contract Manufacturing
                d. Government and Regulatory Support Encourages Contract Manufacturing
                e. Emergence of CMOs as a Reliable Partner for Pharmaceutical Companies Drives Growth
                2. Market Restraints
                a. Increased flow of Generics from low-cost Asian Countries Erodes Core Client Base
                b. Large Number of Traditional Contract Manufacturers Lack High End Technical Knowledge and Skill
                c. Steady Influx of New Manufacturers Creates a Demand-Supply Gap
                d. Time to Setup Plant and Incorporate New Technologies Creates Delay and Requires Accurate Forecasting
                3. Strategic Recommendations
        3. Revenue Forecasts and Competitive Structure
                1. Injectables
                2. Solid Dosage Forms
                3. Liquid Dosage Forms
                4. Total Market
                5. Competitive Structure

5. Asian Pharmaceutical Contract Manufacturing Markets
        1. Market Overview
                1. Introduction
                2. Market Engineering Measurements
        2. Market Drivers Restraints and Strategic Recommendations
                1. Market Drivers
                a. Lower Costs in Asian Countries Compared to Western Counterparts Encourages Outsourcing
                b. Proven Success in IT and Manufacturing Boosts Image of Asian Countries
                c. Publicity Surrounding Asian Countries Drives Companies to Outsource
                d. Huge Talent Pool Combined with Continuous Updating of Technology Propels Outsourcing
                e. Stricter IPRs Enforcement Ensures Protection of Products and Technology
                2. Market Restraints
                a. Volatile Political, Financial, and Regulatory Environment Creates Uncertainty Over the Long Term
                b. High Level of Attrition and Lower Labor Productivity Increase Hidden Costs
                c. Long and Unstable Supply Chain could Result in Slower Time to Market
                d. Quality Issues and Counterfeiting Continue to Exist Creating Additional Risk for Pharmaceutical Companies
                e. Existing Business Model of CMOs Unlikely to Suit Long Term Partnerships
                3. Strategic Recommendations
        3. Revenue Forecasts and Competitive Structure
                1. Injectables
                2. Solid Dosage Forms
                3. Liquid Dosage Forms
                4. Total Market
                5. Competitive Structure

6. Decision Support Databases
        1. Pharmaceuticals and Biotechnology
                1. Total Healthcare Expenditure
                2. Pharmaceutical R&D Expenditure
                3. Government Healthcare Expenditure
                4. Biotechnology Companies
                5. Biotechnology Patents



   List of Figures
 

Chapter 2

  • Total Pharmaceutical Contract Manufacturing Market: Seven-Step Market Engineering Forecast Methodology (World), 2005-2011
  • Total Pharmaceutical Contract Manufacturing Market: Strategic Significance of the Market Engineering Forecast (World), 2005-2011
  • Total Pharmaceutical Contract Manufacturing Market: Revenue Forecasts (World), 2001-2011
  • Total Pharmaceutical Contract Manufacturing Market: Percent of Revenues by Region (World), 2001-2011
  • Total Pharmaceutical Contract Manufacturing Market: Revenue Forecasts by Product Type (World), 2001-2011
  • Total Pharmaceutical Contract Manufacturing Market: Percent of Revenues by Product Type (World), 2001-2011

Chapter 3

  • Pharmaceutical Contract Manufacturing Market: Market Drivers Ranked in Order of Impact (North America), 2005-2011
  • Pharmaceutical Contract Manufacturing Market: Market Restraints Ranked in Order of Impact (North America), 2005-2011
  • Injectables Contract Manufacturing Market: Revenue Forecasts (North America), 2001-2011
  • Solid Dosage Forms Contract Manufacturing Market: Revenue Forecasts (North America), 2001-2011
  • Liquid Dosage Forms Contract Manufacturing Market: Revenue Forecasts (North America), 2001-2011
  • Pharmaceutical Contract Manufacturing Market: Revenue Forecasts (North America), 2001-2011
  • Pharmaceutical Contract Manufacturing Market: Percent of Revenues by Product Type (North America), 2001-2011
  • Pharmaceutical Contract Manufacturing Market: Competitive Structure (North America.), 2004

Chapter 4

  • Pharmaceutical Contract Manufacturing Market: Market Drivers Ranked in Order of Impact (Europe), 2005-2011
  • Pharmaceutical Contract Manufacturing Market: Market Restraints Ranked in Order of Impact (Europe), 2005-2011
  • Injectables Contract Manufacturing Market: Revenue Forecasts (Europe), 2001-2011
  • Solid Dosage Forms Contract Manufacturing Market: Revenue Forecasts (Europe), 2001-2011
  • Liquid Dosage Forms Contract Manufacturing Market: Revenue Forecasts (Europe), 2001-2011
  • Pharmaceutical Contract Manufacturing Market: Revenue Forecasts (Europe), 2001-2011
  • Pharmaceutical Contract Manufacturing Market: Percent of Revenues by Product Type (Europe), 2001-2011
  • Pharmaceutical Contract Manufacturing Market: Competitive Structure (Europe), 2004

Chapter 5

  • Pharmaceutical Contract Manufacturing Market: Market Drivers Ranked in Order of Impact (Asia), 2005-2011
  • Pharmaceutical Contract Manufacturing Market: Market Restraints Ranked in Order of Impact (Asia), 2005-2011
  • Injectables Contract Manufacturing Market: Revenue Forecasts (Asia), 2001-2011
  • Solid Dosage Forms Contract Manufacturing Market: Revenue Forecasts (Asia), 2001-2011
  • Liquid Dosage Forms Contract Manufacturing Market: Revenue Forecasts (Asia), 2001-2011
  • Pharmaceutical Contract Manufacturing Market: Revenue Forecasts (Asia), 2001-2011
  • Pharmaceutical Contract Manufacturing Market: Percent of Revenues by Product Type (Asia), 2001-2011
  • Pharmaceutical Contract Manufacturing Market: Competitive Structure (Asia), 2004
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