Over the course of recent years, various studies have discovered that dependence on pharmaceutical contract manufacturing companies has been on a steady increase. From 2013 to 2014, the industry grew at a rate that was twice as fast as that of the bio/pharmaceutical industry. Therefore, contract manufacturing now accounts for at least a third of the industry’s expense for drug production.
Inorganic growth, with includes the procurement of manufacturing amenities from bio/pharmaceutical enterprises, made up as much as a third of the growth of the industry of pharmaceutical contract manufacturing. Attainment of dissociated accommodations from international bio/pharmaceutical establishments has not been as much of a factor in the growth of the industry growth as was at one time. However, it remains significant in Europe, where the setting is still peppered with a large number of bio/pharmaceutical sites for manufacturing. The same is true in Japan, which is still in the initial stages of development in the contract manufacturing sector.
Challenges to Growth
While there are hundreds of pharmaceutical contract manufacturing companies, only a few make up over half of industry proceeds. In addition, only a small number of these companies continue to dominate the industry. Consolidation is key for pharmaceutical contract manufacturing companies with acquisitions of drug products by sister companies on the rise in recent years.
The greatest challenge for pharmaceutical contract manufacturing companies continues to be confined capacity. Bio/pharmaceutical organizations continue to invest profoundly in their own amenities because of the low capital cost, substantial equity markets and rich cash flows produced internally.
New Markets
Generic drugs may prove to be an area that will fuel growth for pharmaceutical contract manufacturing companies. Companies with semisolid abilities have already taken advantage of the strong demand for generic drugs, as substantial price increases push more companies into other products.
Generic-drug companies are also turning to pharmaceutical contract manufacturing companies to help with drug shortages and concerns related to offshore providers.
Fresh geographic markets also offer more opportunities for contract manufacturing growth. Companies in the domestic market are continuing to grow, although they remain relatively undeveloped in Japan. The number of dedicated Japanese to pharmaceutical contract manufacturing companies of noteworthy size is still quite low. More North American and European to pharmaceutical contract manufacturing companies are developing sales offices in Japan, but just a few actually own industrialized processes. In recent years, the pharmaceutical contract manufacturing industry has materialized into a real force in the bio/pharmaceutical industry.