New Study: Biopharmaceutical Manufacturers Vs. CDMOs

By Louis Garguilo, Chief Editor, Outsourced Pharma

Fortuitous to all OusourcedPharma.com readers, Eric S. Langer, President, BioPlan Associates, Inc., allows me to relay some salient points from their annual survey each year.

Here’s the first one that caught my eye.

Although the COVID-19 pandemic did prompt the industry landscape to refocus on domestic supply and supply chains, the “data in this report indicates the focus on supply chain security is already abating.”

The fear?

“If lessons-learned from the pandemic are not carried into the future, our ability to manage a future pandemic may be problematic.”

Are we an industry with such a short attention span? Or, and more likely, are the challenges to appreciably repatriate supply chains simply unsurmountable, and those efforts that are expended simply fall short?

Perhaps the biopharma industry believes too strongly in the global character of our markets and activities. When a crises passes, we end up with cosmetic changes instead of structural solutions for tightening elongated networks.

The Choice To Exist

Back to the report, its weighty title is matched by its length and depth: 21ST ANNUAL Report and Survey of Biopharmaceutical Manufacturing Capacity and Production; A Study of Biotherapeutic Developers and Contract Manufacturing Organizations.

A few readers may recall last year’s review in OutsourcedPharma.com of the 20th ANNUAL Report and Survey, when we devoted time to a discussion of the term “biopharmaceutical” (In Year 20, "Biopharmaceutical" Remains The Same).

Again this year, the report notes biopharmaceutical refers to “the classic biotechnology-grounded definition: involving manufacture of pharmaceuticals using biotechnology/bioprocessing.”

To generate this year’s report, BioPlan surveyed 220 “qualified and responsible individuals at biopharmaceutical manufacturers and contract manufacturing organizations in 23 countries, plus 179 industry vendors and direct suppliers of materials, services, and equipment to this industry segment.”

This will come as a surprise to no one, but it is worth noting that throughout the report it documents the growing utilization of CDMOs.

This increased use is said to be more “systematic,” and practically speaking, increasingly involves the utilization of single-use bioprocessing equipment (SUS).

“These [and other] changes in the industry are making biopharmaceutical manufacture, particularly for R&D and clinical trials, more efficient, and often less costly and quicker."

The report says new biotech entrants to the industry are increasingly reliant on CDMOs, “because these start-up innovator companies lack facilities and infrastructure and therefore often have no choice than to turn to CDMOs.”

Again, of no surprise to OutsourcedPharma.com readers. I've made this case at least equally affirmatively for years.

The ability to reliably outsource activities for most all development and manufacturing is arguably the biggest driver of the business success of our biotech industry.

I outsource, therefore I am.

If science and innovation are the fuels for our start-up universe, development and manufacturing outsourcing is the Tesla providing the ride to potential commercial success.

But that’s not to say the ride is always smooth.

Too Few Drivers

For example, in a subsection of the BioPlan report, titled“Future capacity contraints for CMOs vs. biomanufacturers,” we read that CMOs are estimated to face almost two times more capacity constraints [than those doing their own manufacturing] due to inability of hiring new experienced technical staff.”

There is also a discernable discrepancy in the ability to retain skilled workers, again adding to capacity constraints at CDMOs. 

“CMOs require highly specialized skills and expertise in biopharmaceutical manufacturing, which includes knowledge of advanced bioprocessing techniques, regulatory compliance, and quality assurance," reads the report.

"CMOs rapid growth during COVID has not been balanced by an increase of the pool of candidates with these specific skills, leading to a talent shortage.”

The biggest friction here is that “[b]iotech companies, pharmaceutical firms, and research institutions are also vying for the same talent pool. This competition makes it challenging for CMOs to attract and retain top talent.

According to the report, the first three areas where CMOs predict this will constrain capacity are:

• Inability to hire new, experienced technical and production staff (48.6% for CMOs vs. 24.9% for biomanufacturers)
• Inability to retain experienced technical and production staff (40.0% for CMOs vs. 26.6% for biomanufacturers)
• Inability to retain experienced scientific staff (34.3% for CMOs vs. 16.8% for biomanufacturers).

Again, this is something we’ve thought through before, for example in the editorial Should You Hire Talent Away From Your CDMOs?

What we need to think through much further is how to gather enough workers to fill both our in-house and external manufacturing facilities. It's a shared supply of talent.

What Services?

A final point of eternal interest. Among 26 outsourcing areas, the BioPlan report and survey lists these as Top Outsourced Activites:

• Analytical Testing: Other Bioassays: 83.2% of respondents outsource this activity, making it the most outsourced area.
• Testing: Toxicity Testing: 77.7% of respondents outsource toxicity testing.
• Validation Services: 72.6% of respondents outsource validation services.
• Testing: Product Characterization: 66.5% outsource this area.
• Plant Maintenance Services: 66.5% also reported outsourcing plant maintenance.

The report adds:

“Regulatory services, cell line development, and early research also see high levels of outsourcing, indicating the need for specialized knowledge and compliance with regulatory standards.”

“Even traditional operational activities such as fill/finish operations and environmental monitoring are significantly outsourced. These areas require specialized expertise and infrastructure, which CMOs can provide efficiently.”

If they can find and retain the skilled workers, that is.

The report serves as cogent reminder and voluminous validation of the themes we've pursued and the experiences readers have documented when outsourcing biopharmaceutical manufacturing.

Thanks again this year to the folks at BioPlan for putting some statistics and further analysis around our sector of the industry.