The value proposition of Contract Development and Manufacturing Organizations (CDMOs) has become increasingly crucial in the pharmaceutical industry. As the industry continues to evolve, CDMOs must adapt and innovate to meet the changing needs of their clients. In this article, we will explore the importance of the CDMO value proposition and how it is shaping the industry.
Table of Contents
The Rise of Digital Manufacturing
Going digital can significantly enhance the value proposition of CDMOs. By embracing smart, automated bioprocessing technologies, CDMOs can improve efficiency, reduce costs, and enhance product quality. This shift towards digital manufacturing allows CDMOs to better serve their clients by providing faster turnaround times, higher yields, and more precise control over the manufacturing process.
The Global CDMO Model
The global CDMO model has undergone significant changes in recent years. Larger CDMOs are consolidating and broadening their services to fill strategic gaps by integrating smaller, focused-service providers. This trend has led to the creation of end-to-end service offerings, which dominate the traditional focused-service model. While this consolidation can bring benefits such as economies of scale and increased efficiency, it also poses challenges for maintaining the entrepreneurial culture and business velocity that smaller CDMOs often possess.
The Importance of Business Velocity
Maintaining business velocity is critical for CDMOs. This involves ensuring that each individual service line within the organization continues to operate at a high pace, even after being acquired by a larger CDMO. Failure to do so can result in a loss of customer relationships and a decline in overall customer experience. As Brian Scanlan, managing partner of Freedom Bioscience Partners, notes, “Business velocity is often overlooked in the individual service lines, but it is essential to maintaining the value proposition of the CDMO.”
Key Attributes of a Great CDMO
When selecting a CDMO, pharmaceutical companies should focus on five primary attributes: quality, flexibility, speed, cost-effectiveness, and experience. Quality is the most important consideration, as it directly impacts the final drug product. Flexibility is also crucial, as it allows CDMOs to adapt to a range of customers, products, and processes. Speed is critical for optimized scalability, and cost-effectiveness is essential for reducing expenses and minimizing waste.
Embedded CDMOs
Embedded CDMOs have become increasingly popular, as they offer a comprehensive service portfolio that integrates drug substance and drug product development. This model helps optimize drug development by providing a solid foundation for success. By embedding their drug strategy within a CDMO, pharmaceutical companies can streamline their processes and reduce the risk of delays and errors.
Innovation and Partnerships
The CDMO value chain is shifting towards a “one-stop-shop” service portfolio, with customers increasingly expecting comprehensive solutions from their partners. Well-positioned CDMOs are adapting to these changes by investing in new manufacturing capabilities and forming partnerships to meet the growing demand for novel modalities such as cell therapies and gene therapies.
Conclusion
The CDMO value proposition is more important than ever in the pharmaceutical industry. By embracing digital manufacturing, maintaining business velocity, and focusing on key attributes such as quality, flexibility, speed, cost-effectiveness, and experience, CDMOs can provide the comprehensive services that pharmaceutical companies need to succeed. As the industry continues to evolve, CDMOs must innovate and adapt to meet the changing needs of their clients, ensuring that they remain a vital part of the pharmaceutical development and manufacturing process.
“The CDMO value chain is moving toward a ‘one-stop-shop’ service portfolio. The analysis by EY-Parthenon revealed another trend: customers increasingly expect comprehensive solutions from their partners.” — EY-Parthenon
References
- “Going Digital Can Help CDMOs Upgrade Their Value Propositions.” Outsourced Pharma, March 28, 2022.
- Scanlan, Brian. “The Global CDMO Model: Value Creation Is Not Just A Matter Of Integrating The Pieces.” Outsourced Pharma, January 16, 2018.
- “Choosing A CDMO: Key Considerations.” PCI Pharma Services, n.d.
- “Embedded CDMO: A Drug Development Success Model.” Bioprocess International, n.d.
- “How CDMOs are leading innovation for pharmaceutical partners.” EY, n.d.
