India and China have potential growth opportunities in CMOs space

According to Research and Markets, the global pharmaceutical contract manufacturing market to grow at a CAGR of 6.91% during the period 2016-2020. Contract manufacturing has potential growth opportunities in emerging countries such as India and China.

One of latest trends in the market is consolidation through vertical integration, alliances, and acquisitions. The major pharmaceutical companies have decreased their operations and R&D budgets, which has led to an increase in demand for outsourced services. Moreover, companies have consolidated their infrastructure in response to a sharp global economic downturn, poor revenue growth prospects, and expensive and ine cient operations. Strategic partnerships between pharmaceutical companies and CMOs have led to the reduction of government spending on manufacturing.

The past few years have brought major changes to the pharmaceutical outsourcing services. As more in- house positions have been removed, pharmaceutical vendors are looking for strategic partnerships and ‘one-stop’ solutions.

According to the report, one of the primary drivers in the market is high number of US FDA-approved manufacturing facilities in emerging countries. While selecting a partner for outsourcing, pharma companies look for the US FDA-approved plants along with skilled workforce and low operating costs. India, with more than 100 US FDA approved manufacturing facilities, is one of the most preferred locations for outsourcing manufacturing services.

Further, the report states that one major challenge in the market is lack of information integration. One of the greatest challenges faced by most vendors in the pharmaceutical contract manufacturing market is the lack of transparency and information integration in the whole supply chain process. Few medicines, especially vaccines and specialty injections, need fast delivery to ensure their utility. If companies are equipped with a centralized system, they will be able to observe changes in inventory and can order shipments as per requirements. Distribution vehicles or shipments can be redirected to obtain drugs in the required areas.

With the right integration of available data from all the stages within the supply chain, companies can keep track of orders and delivery rates. This can e ectively cure the delays and disruptions in the pharmaceutical supply chain, making the entire value chain e ectively responsive to the unmet medical needs.