- CMO: A contract manufacturing organization
- CRO: Contract Research Organization
- CDMO: Contract Development and Manufacturing Organization
Outsourcing a key strategy in today’s pharmaceutical business
- The ever-increasing costs of R&D combined with low productivity and poor bottom lines, has forced many pharmaceutical companies to outsource both research and development and manufacturing activities to low-cost countries, thereby saving costs and time in the process.
- Manufacturing outsourcing in pharmaceutical and biopharmaceutial industry is quite common nowadays. Outsourcing can reduce overall costs by 30% to 35%. At the same time, outsourcing improves manufacturing efficiencies.
- Moreover, manufacturing outsourcing minimizes investments in capital-intensive facilities.
- Outsourcing also reduces excess production capacity by divesting facilities
- With increased activity in outsourcing, the global market for such services $172 billion in 2020.
- Quality is the key in the contract manufacturing. Pharmaceutical manufacturing companies should have the quality credibility for business growth in CDMO industry. For example, manufacturing companies with US FDA approved plants are in high demand. These plants are considered as most preferred locations for outsourcing manufacturing services.
Choosing a CMO: A complete due-diligence should be established
It is always a challenging to find suitable contract manufacturing partner is pharmaceutical and biopharmaceutical industry. A complete due diligence need to be carried out before establishing the contract with the CDMO.
Factors need to considered for selecting CMO or CDMO
- Reputation of the CMO / CDMO. Do the contract manufacturing organization is the establish name.
- Estimation of the manufacturing facility.
- Range of products / portfolio of the products they manufacture.
- Present client list – for whom CMO is already manufacturing.
- Leading brands – what they are manufacturing.
- Quality certification what they have.
- Past warning letters, EIR (Establish Inspection Report) or any specific plant inspections
- Past history of product recall.
- Comprehensive analysis of the costing. Costing of the other manufacturing companies need to be checked and analysed.
- Batch size manufacturer is quoting. Sometime, price quoted by a CMO is low but at the same, batch size is quite high. Those scenarios need to checked.