11.2. API Development Activities

11.3. API Method Testing

11.4. API Testing Programs

11.8 Biologics Pricing Methodology and Context

Sourcing. To gain biologics pricing, we spoke to four industry experts with the following range of expertise:

• One subject matter expert (SME) worked at a major drug product and specialty formulation facility in Europe for 15 years and has access to competitive quotes from multiple CDMOs across the region.

• Another has worked at a global supplier of vials and syringes for many years.

• One SME is a consultant who has been supporting developers to source their sterile CMC activities across Europe, the U.S., and APAC for over 20 years.

• One SME has worked at several large sterile CDMOs for 20+ years.

Methodology. We collected quotes from the sources listed above, anonymized the content, and then sent the compiled information back to these SMEs and three additional SMEs for validation and commentary. We subsequently compiled all of their feedback. Using their guidance, we have organized the pricing into three categories: low, medium, and high. In general, U.S. pricing is about 20% higher than European prices at similar-sized firms. We see exceptions, however, in that marquee firms in both Europe and the U.S. charge a premium price that is generally more expensive than smaller firms in the U.S. For this reason, it is best to consider the “high” pricing to be common for any marquee firm globally, and the lower tiers to generally represent the U.S. and Europe. There are exceptions, however. For example a small, U.S. firm that is a new entrant to the industry may quote low-end prices that more closely match their European counterparts in an effort to build a track record. Likewise, firms with recent visible 483 violations may quote the low-end pricing, no matter which region they operate in.

11.9 Development Activities

Drug product (DP) formulation development. These activities, listed in ^{Table 37}, are typically performed in parallel to drug substance (DS) formulation development, but encompass a different scope. Insights from DS formulation are incorporated into a DP formulation development plan, but a range of formulations and conditions require evaluation as part of a comprehensive development program. For example, temperature screening is often a key condition. Some specialty formulation CDMOs will have in silico methods to help define the design space and refine the list of formulation candidates.

Lyophilization development. If lyophilization is needed, the client often knows to request this particular scope at the beginning of a DP program, as they usually know enough about the overall stability of the molecule to understand if lyophilization will be required. Otherwise, without prior work to narrow the scope, lyophilization development programs can be extremely expensive. On paper, the scope may reach $3M. The total price will depend heavily on the lyophilization cycle required. Some simple projects can be lyophilized in a 24-hour cycle, but some drugs, notably GLP-1 agonists, may require as long as four days. When products reach phase II manufacturing, some developers may opt to do another round of lyophilization development to choose the process that will perform best at large scale. These programs can again reach $3M, but are worth it due to long-term commercial COGS savings.

Biosimilars may use the innovator formulation, but often do not, either because they see room for improvement on the reference product or for other business purposes, such as new markets. Emerging markets, for example, may have limited cold storage. A client who seeks to launch a biosimilar into an emerging market may opt to reformulate a cold-stored product into a lyophilized vial, to be reconstituted at point of use.

Dosage form — such as a pen, autoinjector, or PFS — does impact formulation concerns, as these delivery systems often require higher product concentrations. This increases the cost not only of the starting material, but of the formulation development program itself. As discussed elsewhere in this report, companies are increasingly pushing for more self-administered products, leading to a rise in requests for pen, autoinjector, and PFS usage, and consequently more formulation development programs.

11.10  Clinical Manufacturing

Engineering runs are highly recommended to ensure that the product doesn’t clog lines and otherwise incur unexpected loss. Engineering runs are especially recommended the first time a product is filled, typical for phase I material, but not as often in later phases. The critical test for engineering runs is volume in container and non-GMP stability. Phase I batches are typically 10,000 to 20,000 units. CDMOs typically price a project per batch, which includes vials, testing, and program management fees. If, for example, a standard run on a particular line is 50,000 vials, and the client only wants to fill 10,000 vials, the CDMO will typically start with their baseline batch price and subtract the cost of the vials.

Engineering and GMP Run Packages. In ^{Table 37}, we present the prices for engineering or GMP runs. Since engineering runs take place on GMP lines, they are priced the same as GMP runs. Engineering runs, however, may be performed at a reduced size that is large enough to show consistency. For example, if the GMP is 150,000 units, engineering may be 25k to 20k vials. In cases where the CDMO is in a competitive bidding process, they may roll up the cost of the enginnering run into a package deal for the GMP runs. Consumables are usually included in all batch pricing information, and are included in prices we quote here.

11.11  Commercial Biologics Context

CDMOs determine the batch price for commercial manufacturing in a manner similar to clinical projects. Commercial projects, however, are much more sensitive to cost per unit, and therefore the CDMO often rolls up all of the charges into a final quote that includes a cost per vial. Although the individual line items are often listed, there may be more variability in what line items are included in the quote. Clients are charged per vial delivered. This contrasts markedly with clinical batches, where the CDMO is expected to meet a minimum unit quantity per batch, and producing additional units typically does not significantly affect the overall cost.

Prices were inflated during the COVID-19 pandemic but settled somewhat in 2023–2024. Prices may be rising again soon due to GLP-1 demand consuming a significant share of available capacity, but this effect hasn’t fully hit the market yet. Part of the delay in price changes is due to the long lead times for fill/finish projects, and partly because much of the GLP-1 manufacturing is taking place in China.

As of this writing in July 2025, there is a capacity crunch on the source of vials, and so prices of glass vials and syringes are increasing. Smaller CDMOs may pay a higher price per vial than larger CDMOs. Clients with large batches may be able to source vials for a lower price if they buy in bulk.

In ^{Table 41}, we report some typical line-item costs for a commercial batch. Depending on CDMO standard practices and client requests, each of these values may or may not appear as a specific line item in the quote. These values represent the drivers of the final price per vial, which is often calculated (either in the quote or by the customer) for comparison among suppliers. As with most DS manufacturing projects, a major cost in DP manufacturing is the suite time. Suite time is a roll-up of annual maintenance costs, overhead labor, equipment depreciation, and other standard accounting costs. The amount of suite time required depends on the number of units per batch and the fill equipment rate. Some CDMOs report the fill rates of their critical equipment but some do not. A small, slow line — such as one commonly used for clinical batches — may run 250–500 vials or syringes per hour, whereas the high-speed commercial lines can accommodate over 12,000 units per hour. (See Argonaut profile in our CDMO Profile Section.)

All of the commercial pricing data assume that formulation and method development have been completed and were included in the clinical manufacturing phase of product development. Program management fees are not often quoted as a separate line item for commercial projects, and may be included in the company’s overhead costs.

Commercial DP manufacturers typically aim to perform all compendial and product-specific testing in-house, but they maintain a preferred set of vendors for outsourcing when internal capacity is exceeded. Testing is a very small part of the cost of commercial projects, so CDMOs often do not pass along the outsourced testing premium to their commercial customers unless it is a specialty test that has been prearranged as an outsourced service. The pricing given in ^{Table 46} is the final price, no matter how many vials are required to release the batch. Testing costs remain constant regardless of vial volume, which contributes to the economies of scale achieved in commercial batches.

PPQ and Commercialization. In ^{Table 42}, we list some high-level process performance qualification (PPQ) pricing. A few SMEs told us that PPQ pricing is no different than a GMP clinical batch, although the CDMO may give a discount as they would price any three consecutive GMP batches. Another SME at a marquee firm told us that PPQ prices are the same as GMP batches except that they upcharge $30k to $50k for the additional management and testing required.

GMP lyophilization. Pricing for lyophilization runs, listed in ^{Table 44} can vary widely, and is heavily dependent on the lyophilization cycle, as we noted for development. GLP-1 agonists, for example, typically require four days. Anecdotally, we were told that some difficult or poorly developed projects were quoted up to $30/vial for a commercial project, which emphasizes the value of spending additional time on lyophilization development.

Timelines. Although a commercial CDMO can execute the three PPQ batches in about six weeks, commercial fill projects will typically last 15 to 18 months. The limiting factor is always stability. For BLA filings, the FDA requires a minimum of one year of DP stability data. Customers try to use standard unit sizes, but if a different unit size is required, the CDMO will need to order change parts for the specialty unit. Lead times for change parts vary, but it would not be unreasonable to anticipate a six-month delay if specialty change parts are needed.