These organizations inevitably invest in analytical testing to support their pharmaceutical product development from early stage development to commercial manufacturing.
In bringing novel drugs to market, developing the necessary methods to analyze intermediate drug substances and finished drug products is an essential step in ensuring the quality of the final product. Pharmaceutical companies have frequently used contract laboratories and contract research organizations (CROs) for all or part of their analytical development and testing requirements. However, following the implementation of the FDA’s process analytical testing (PAT) initiative in the 1990s, the subsequent and more pressing need for real-time analytical results gradually migrated these activities upstream to a stage where manufacturing divisions began performing analytical testing. In addition, as the industry continues to adjust to rampant acquisitions and consolidations that blur the lines between pure CMO and CRO organizations, drug-makers are increasingly starting to look to CMOs for pharmaceutical analysis. Should this be the case?
The pharmaceutical analytical services sector mainly comprises companies that help businesses to manufacture, conduct research & development, and validate and execute GCP, GLP, and cGMP analytical methods that range from routine to highly complex programs. Pharmaceutical analysis is a branch of practical chemistry that involves a series of processes for identification, determination, quantification and purification of a substance, separation of the components of a solution or mixture, or determination of the structure of chemical compounds. The substance may be a single compound or a mixture of compounds and may exist in any dosage form.
Recently, a greater number of FDA safety regulations and consumer lawsuits have led to increasingly rigorous testing requirements and scrutiny of finished pharmaceutical products prior to sale. The impact of this increasingly regulated environment is the unprecedented pressure on drug developers and manufacturers to ensure the safety and quality of their products. In turn, organizations offering analytical testing services — primarily CROs/CMOs — have thrived because of increased Government regulation of pharmaceutical products, with 5.0% growth expected in 2011 alone.
With costs escalating at every stage in the drug development lifecycle, increased outsourcing to emerging markets is currently providing the impetus for topline growth in the industry. It has been projected that emerging markets will account for over two-fifths of global GDP, and 80% of the world’s population by 2015. Contract manufacturers and researchers in these regions are increasingly adhering to global regulatory standards, which will generate additional growth through offshore providers of analytical testing. With regulatory scrutiny continually tightening, the industry is expected to grow at an average annual rate of 3.9% through 2011. This represents a huge opportunity for the industry as whole but more specifically for organizations that provide analytical chemistry services.
Testing laboratories have enjoyed an advantage during the recent economic downturn because many clients haven’t abandoned their testing regimens for drugs under development. And regardless of economic conditions, Government regulations still require manufacturers to test their existing products to ensure they comply with federal law. However, the recession has reduced the rate of revenue growth due to higher company research and development (R&D) costs, so with fewer products in development, the growth in the demand for laboratory testing of new products slowed.
Over the next five years to 2016, the industry is projected to grow at a faster rate as companies return to investing in new products and, in turn, increase their R&D expenditure. The laboratory testing services industry is forecast to grow at an average annual rate of 5.6% to reach $22.0 billion over the next five years. An anticipated increase in Government regulation of consumer focused products and greater pressure on manufacturers to deliver high-quality goods will support this continued growth. At the same time, it is expected that the industry will continue a trend consolidation demonstrated in recent years since larger testing laboratories that service a wider range of sectors have proven to be more profitable.
With the landscape of potential contract service providers constantly changing and the unpredictable reconfiguration of service offerings, the choice of an appropriate partner to outsource analytical services to during drug development can prove to be challenging. Through in-depth conversations with pharmaceutical and biotechnology industry thought-leaders, Nice Insight established four key attributes that decision-makers should consider when selecting an analytical testing partner. These are:
.svg)
