DUBLIN--(BUSINESS WIRE)-- Research and Markets (http://www.researchandmarkets.com/research/50c8df/european_pharmaceu) has announced the addition of Frost & Sullivan's new report "European Pharmaceutical and Biotech Contract Manufacturing Markets" to their offering.
Outsourcing becomes Increasingly Entrenched as a Strategic Manufacturing Option for Big Pharma
Increasingly, big pharma is viewing the outsourcing of pharmaceutical manufacturing as a strategic move that would enable them to focus on their core competencies such as R&D. At the same time, the patent expiry of key blockbuster drugs worth $45 billion and biologics worth $30 billion is expected to reduce the capacity utilisation rates of their manufacturing facilities, thereby making outsourcing a viable option for pharmaceutical and biotech companies.
As pharmaceutical and biotech companies strive to enhance their internal core competencies, outsourcing is likely to become increasingly entrenched as a strategic manufacturing option, notes the analyst of this research. The impact of the economic crisis, coupled with the poor performance of the venture capital industry in Europe, has underlined the popularity of contract manufacturing as it has become synonymous with cost-cutting and the timely entry of products into the market.
In parallel, with several blockbuster drugs of large pharma and biotech companies coming off-patent, the utilisation rates of manufacturing plants are likely to reduce by half. This is set to trigger an increase in outsourcing of manufacturing by big pharma companies. Currently, big pharma companies contribute between 10 to 25 per cent of the total revenues of contract manufacturing organisations (CMOs) in Europe. Frost & Sullivan anticipates such figures to rise to 40.0 per cent by 2013, and up to 50.0 per cent by 2018.
Focus on Technology Innovations to Propel CMOs to Forefront
Stringent regulatory requirements are likely to place pressure on CMOs. As the regulatory environment in Europe becomes progressively stricter owing to contamination issues, safety compliance and drug recalls, the costs of gaining regulatory approvals will make up a major chunk of fixed costs for CMOs.
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INDUSTRY KEYWORDS: Health Biotechnology Pharmaceutical