Trends in Outsourcing Solid Dose Manufacturing in 2014

Life Science Leader, March 2014

In 2014, the contract manufacturing market size for solid dosage forms is anticipated to be $19.6B, representing 58% of the total CMO market value of $33.7B.

While the market value percentage for solid dose has been drifting downward — likely related to the shift towards biologics, which are more expensive to develop and manufacture — the propensity to outsource oral solid dosage forms continues to grow modestly. Of the 25% of respondents who will engage a CMO for commercial scale manufacturing projects this year, more than half of them will outsource solid dosage form manufacturing, showing a four percentage point increase over last (51% in 2013 up to 55% in 2014).

Nice Insight’s annual survey results indicated that solid dose manufacturing will be outsourced with the greatest frequency, followed by injectables (50%), semi-solids (44%), then specialty dosage forms (42%). In general, respondents reported they would outsource finished dosage forms with a greater frequency than API manufacturing (for both large and small molecule APIs). 

When it comes to outsourcing behaviors, respondents who will contract solid dose manufacturing in 2014 showed a greater likelihood for considering emerging market providers than the general population, with nearly nine out of ten stating they include CMOs in emerging markets on their shortlists (87% vs. 70%).  Among those who consider emerging markets, 63% are already working with a manufacturer in an emerging market, and another 25% are aware of reliable CMOs but haven’t offshored yet.  With that said, CMOs in the U.S. and Canada still receive 23% of outsourced solid dose projects.  China and Western Europe follow, securing 15% of outsourced projects, and India is a close contender with 13% of the work. 

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There are still anxieties among 13% of respondents who outsource solid dose manufacturing when it comes to offshoring.  The most frequently voiced fears include the “quality level is too risky,” “regulatory compliance concerns,” and “intellectual property concerns.”  Since respondents who will outsource solid dose manufacturing ranked quality as their top priority driving CMO selection, it makes sense that quality also topped the list of concerns. Similarly, a CMO’s regulatory track record ranked third (after reliability), which corresponds to regulatory compliance concerns as an apprehension for offshoring. It is interesting to see IP concerns in the top reasons for not considering emerging market providers since this worry corresponds much more strongly to primary manufacturing/API production than secondary manufacturing of dosage forms. Productivity, affordability, and innovation ranked fourth through sixth respectively, and this prioritization of outsourcing drivers among solid dose manufacturers happened to match the ranking of the overall respondent group. 

In general, respondents reported they would outsource finished dosage forms with a greater frequency than API manufacturing (for both large and small molecule APIs). 

Both outsourcing and offshoring have shown their efficacy in cutting costs for pharma companies when it comes to solid dose manufacturing. Another potential development to emerge from reducing capital outlay on in-house manufacturing equipment and technologies is a shift from tactical relationships for OSD projects toward more strategic, long-term agreements with manufacturers. Interestingly, 65% of respondents who will outsource solid dosage manufacturing in 2014 expressed interest in a strategic partnership, which was considerably higher than the overall average of 48% interested in a strategic partnership. However, the factors that carried the greatest influence on strategic partnership selection closely coincided between outsourcers of oral solid doses and the overall respondent group.

 

Nice Insight

Nice Insight, established in 2010, is the research division of That’s Nice, A Science Agency, providing data and analysis from proprietary annual surveys, custom primary qualitative and quantitative research as well as extensive secondary research. Current annual surveys include The Nice Insight Contract Development & Manufacturing (CDMO/CMO), Survey The Nice Insight Contract Research - Preclinical and Clinical (CRO) Survey, The Nice Insight Pharmaceutical Equipment Survey, and The Nice Insight Pharmaceutical Excipients Survey.