ROCKVILLE, Md., Dec. 6, 2017 /PRNewswire/ -- The only answer for expiring pharmaceutical patents and low production capacity at large concerns is to outsource manufacturing tasks, according to Kalorama Information. The healthcare market researcher said in 2017, the total global market for BCMO services, including both clinical and commercial production, was estimated at $48 billion. The market for biopharmaceutical manufacturing is driven by demand for products and the expiration of blockbusters. This according to a new report from Kalorama, Biopharmaceutical Contract Manufacturing (BCMO) Market - by Type of Service, by Organization and by Region.
The report says that companies marketing blockbusters are often dependent on a handful of such products, patent expirations have great influence on those companies' financial wellbeing. For some players including Amgen, Pfizer and Bristol-Myers Squibb, individual blockbusters comprise more than 25% of total revenues.
"Over the past several years, an unprecedented number of blockbuster drugs have lost patent protection, and this trend is expected to continue through the foreseeable future," said Bruce Carlson, Publisher of Kalorama information.
Because generic medicines are priced at a discount of up to 90% of the cost of the original drug, yet are considered therapeutically identical, their growing usage represents a particularly threat to blockbuster drugs. Utilization of a BCMO can often allow sponsors to save considerable time in establishing manufacturing processes. Leveraging the resources and expertise of third party manufacturers can eliminate delays associated with oversights and mistakes made by individuals with inadequate experience in performing product and process development for a material produced under Good Manufacturing Practice (GMP) standards. Since these manufacturing processes are often established during clinical testing to produce material for human trials, production time savings are important as they can reduce overall trial times and allow a drug developer to get a product to market more quickly.
Production of certain specialized products may also be established more quickly with a BCMO than with in-house resources. For example, more potent, low-dose products often have to be specially prepared in dedicated manufacturing facilities. Because of the danger of cross-contamination between facilities, dedicated production plant or time-consuming sterilization and decontamination procedures between production runs of different products are necessary to the production process. Outsourcing production to an external manufacturer can help reduce this lead time as the contractor may have access to suitable facilities and can quickly adapt them to the sponsor's product.
The report says that because the market for third party manufacturing is still very fragmented, relatively few companies are capable of taking over a large portion of the manufacturing process, so complex deal structures are typically required that involve several different players. Because of this, the coordination of the numerous processes and parties involved requires significant time and expertise on the part of sponsoring companies. Therefore, while the greatest value from manufacturing outsourcing typically comes from when the external manufacturer is utilized during the early stages of a product's development, this benefit may quickly erode as the product is commercialized if the sponsor is not able to structure and maintain appropriate relationships. Drug developers with more limited resources can also gain access to specialized expertise by using BCMOs. For example, processes such as manufacturing validation, process development and regulatory compliance often require considerable expertise and start-up companies are unlikely to be familiar with these areas.
Some BCMOs focus on niche areas - Baxter BioPharma Solutions contract manufactures premixed parenteral drugs in flexible plastic containers and has become a specialist in frozen premixed drug products; this is a process that requires sophisticated controls on temperature, processing times, component addition sequences and additional rates which most sponsors do not possess in-house. BCMOs can therefore fill critical gaps in sponsors' capabilities; their personnel can also provide sponsors with learning opportunities that help build internal expertise. This can be particularly beneficial from a regulatory perspective. As manufacturing specialists, BCMOs diligently work to meet regulatory requirements and ensure product compliance.
This is important, since regulators tend to frown upon "testing in quality", or establishing quality in terms of the final product only; rather, the manufacturer must demonstrate that all of the materials and media used in the production process were free of contaminants and that no infectious agents were introduced into the product during manufacture. BCMOs also tend to keep abreast of newer regulatory initiatives, such as Process Analytical Technology (PAT). This requires in-process testing conducted while a product is being produced. Although many believe that PAT will ultimately reduce cycle times and improve product performance and compliance, it nonetheless represents an extremely high capital investment to install in-process equipment sensors, systems and automated analytical equipment that is prohibitively large for smaller manufacturers.
About Kalorama Information
Kalorama Information, a division of MarketResearch.com, supplies the latest in independent medical market research in diagnostics, biotech, pharmaceuticals, medical devices and healthcare; as well as a full range of custom research services. Reports can be purchased through Kalorama's website and are also available on www.marketresearch.com and www.profound.com.
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SOURCE Kalorama Information