ENTERPRISE SPONSOR: Used Pharma Equipment
Federal Equipment, one of That's Nice's Road to 2021 sponsors, discusses how the company is evolving its partnership models or geographic footprint to meet the future of healthcare?
Pharmaceutical development and manufacturing strategies have evolved significantly over the past two decades. Small molecule active pharmaceutical ingredients, bulk drug product, and finished dose drug products were often all developed and made within the product innovator’s manufacturing network. Pharmaceutical manufacturers found cost savings in outsourcing active ingredient manufacturing and focusing on finished drug product. Product development shifted from small molecule to large molecule product. These biopharmaceutical development projects required different technologies and skill sets. The larger pharmaceutical companies partnered with research and development companies to produce new, biopharmaceutical compounds with payments made according to development milestones and clinical targets. Once new biologic products showed promise, product portfolios were compared with manufacturing technologies and facilities. Lower margin and “non-core” products that did not fit the therapeutic focus or the manufacturing equipment and facility portfolio shifted to outsourced manufacturing.
Partnerships Are More Important Than Ever
Outsourcing provided a way to manage rising development costs, a complex set of manufacturing processes, and a broader product mix. The pharmaceutical industry continues to see an expansion of outsourced development and manufacturing services. The industry’s response to the COVID-19 pandemic has already involved many new partnerships for vaccine development, as well as treatment development and manufacturing. Outsourcing should continue to expand as companies seek to build local infrastructure to manufacture critical medicines. Much of this infrastructure will be new technology, including continuous manufacturing equipment and technology for active ingredients and finished drug products.
Outsourcing should continue to expand as companies seek to build local infrastructure to manufacture critical medicines.
CDMOs Provide Capacity and Expertise
New equipment technologies and the manufacturing processes will need to be developed to keep manufacturing costs manageable for existing and future products. In the short term, the industry will need to rely on existing manufacturing equipment and facilities to continue the pace of vaccine development through production. Used equipment can be a viable bridge to make up for delays in delivery of new equipment. Low-priced used equipment will provide cost savings that reduce financial risks associated with building manufacturing facilities. Contract development and manufacturing organizations (CDMOs) will provide the flexibility to adapt to new products and technologies. Their expertise in product scale-up and transfer will be required to deliver these new products, as well as their manufacturing capacity.