In recent years, the pharmaceutical industry has grown at a rapid pace. Although the pharma industry still has challenges, experts predict it will reach a market value of approximately $ 1.5 trillion in the coming year. A rapid increase in pharma’s large market size is attributed to several factors, including the growth of diseases, affordability, consumer awareness, changes in governmental policies regarding insurance policies, and the availability of adequate treatment facilities.
Global Players in the CDMO Industry
A select group of service providers dominates the global CDMO market and are poised to take advantage of some of these trends. Some of the key players include Lubrizol CDMO, Catalent, Lonza Group, Thermo Fisher Scientific,
- Lubrizol Life Sciences CDMO: Lubrizol Life Sciences CDMO (Contract Development and Manufacturing Organization) focuses on providing contract development, manufacturing for the healthcare and pharmaceutical industries. Lubrizol Life Sciences CDMO offers a wide range of services to support the development and commercialization of pharmaceutical and medical device products. Their expertise spans formulation development, drug delivery systems, analytical services, and manufacturing.
- Catalent: Catalent is a global pharmaceutical and biotechnology company that provides advanced delivery technologies, development solutions, and manufacturing services for the healthcare industry. With headquarters in Somerset, New Jersey, Catalent operates in over 40 countries and has more than 40 facilities worldwide.
- Lonza Group: Lonza Group is a global company that provides integrated solutions and services to the pharmaceutical, biotechnology, and specialty ingredients markets. Headquartered in Basel, Switzerland, Lonza operates in over 120 locations worldwide, employing a diverse workforce of approximately 15,000 employees.
- Thermo Fisher Scientific: Thermo Fisher Scientific’s offerings cover many areas, including life sciences research, genetic analysis, proteomics, drug discovery and development, clinical diagnostics, forensics, environmental analysis, and industrial quality control. Their comprehensive range of products includes laboratory instruments, such as mass spectrometers, chromatography systems, next-generation sequencers, electron microscopes, consumables, reagents, and software platforms.
Here are the top 10 CDMO trends
Drug-pricing reform in the U.S.
Drug pricing reform is one of the most important issues in the upcoming U.S. Presidential election. Drug prices are the focus of the debate, and plenty of legislative proposals are already addressing the dilemma of high-priced prescription drugs in the U.S. Analysts also propose that the U.S. may set up a separate department to control drug prices.
Some of the reforms suggested by the Presidential candidates include developing a new system that will link the U.S. and international drug prices of particular drugs. Similarly, manufacturers will face penalties if they do not enter into negotiations with the Federal government for producing a specified number of medications annually. It is still unclear how the policy debates will turn out, but drug price reforms will be a key issue.
The emergence of a new leadership
The U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) will have a leadership change. Any changes in the policy direction between the agencies will also affect the future of pharmaceuticals.
The U.S. Senate will likely confirm the nomination of Dr. Stephen Hahn, the chief medical executive and professor in the Department of Radiation at the University of Texas. President Donald Trump and the Senate on Health and Education nominated him for the top position. Labor & Pensions has already voted in favor of his confirmation, which will soon go to the Senate for a final vote. If Dr. Hahn is confirmed, he will succeed Dr. Norman Sharpless, the acting Commissioner FDA, who served from April 5, 2019, to November 1, 2019.
Simultaneously, the European Medicines Agency is moving ahead with its plans to find its new Executive Director. In May 2019, EMA issued a vacancy notice with the Official Journal of the European Union for the Executive Director position. It should be noted that the term of the current EMA Executive Director, Guido Rasi, is about to end this year. If selected, the new director will be the fourth executive director in EMA’s history.
Embracing Medical Marijuana
There are many challenges still facing the medical marijuana industry. However, legalizing medical marijuana is a stepping-stone toward revolutionizing the pharmaceutical industry. The U.S. Food and Drug Administration (USFDA) first approved Epidiolex, for the treatment of epilepsy, in June 2018. It is the first cannabidiol (CBD) medication formally marketed, paving the way for U.S. pharma companies to find a market abroad for medical marijuana-based treatment.
Such is the impact of the legalization that the cannabis market is expected to surpass $55 billion by 2024. This potential also forces companies to invest money into researching new marijuana-based treatments. Here are some of the other major deals that describe how the environment for CBD is changing:
- In December 2018, Tilray Inc., a Canadian cannabis company, collaborated with Novartis’ Sandoz AG and became part of Novartis’s network.
- In March 2019, US-based Farmako imported 50 tons of medical cannabis from the European market for the next four years after securing a contract with Pharmacann Polska, an E.U. company.
Importance of emerging markets
Historically, pharmaceutical companies wanted more control over the uncertainty faced by these companies due to saturated U.S. and European markets. Hence, several pharmaceutical companies focused their research programs targeting developed countries only. However, recent changes in the pharmaceutical sector have resulted in the emergence of new markets.
The opportunities in the emerging markets are attributed to a combination of high population and low healthcare availability, which is a viable opportunity for the global pharma industry to invest in a new sector. Due to their unique demographics, these emerging markets have significant potential, which has already led to the creation of new products for opportunistic pharmaceutical companies.
The Role of Artificial Intelligence
Artificial intelligence (A.I.) is rapidly becoming the driving force behind the new research undertaken by pharmaceutical companies. Since its widespread availability, A.I. has been instrumental in the future development of drugs.
Recently, many doubted the efficacy of artificial intelligence and its use in pharmaceuticals. Experts also questioned its benefits, and others feared the potential dangers of implementing it in the healthcare sector. Gradually, companies have started to understand its potential, and their research departments are working hard on how to use A.I. for better-quality products.
Artificial intelligence applications in the pharmaceutical industry include data entry, lab test analyses, and evaluation of healthcare systems for errors or inefficiencies.
New business models
Reducing healthcare costs is among the primary concerns of the pharmaceutical industry. In the recent past, mergers and acquisitions have helped companies adapt business models to help them solve the dilemma.
The merger of CVS Health Corporation (CVS), the biggest retail pharmacy in the U.S., and Aetna, a prominent health insurance company in the U.S., is an example of such business models. Similarly, the acquisition of Express Scripts, a pharmacy benefit manager by Cigna, a health insurer, suggests a changing paradigm regarding M&A activity in the sector.
While it is still too early to predict if the consolidation will lead to a reduction in reducing healthcare costs, the trend is expected to continue.
Change in the U.S. generics market
Pharmaceutical companies will require restructuring due to the pressures of increasing costs. As the United States has always been a strong player in the generics market, dealing with cost pressures will be a key issue.
A prominent business partnership in this landscape is Mylan and Pfizer’s off-patent and generic drug business (Upjohn), a deal announced in 2019 and expected to come to fruition. Both these companies are trying to improve their performance in the generics market as the pricing pressures continue to rise on generic-drug companies.
Companies such as Novartis’ Sandoz are also restructuring to increase their respective market shares in the generics market; however, the question remains, will this lead to improved performance in the generics market?
Availability of Real-world data for drug development
Another important issue will be pharmaceutical companies’ ability to use real-world data for which patient data is collected outside randomized controlled trials. This approach is important for drug development because it evaluates if outcome-based reimbursement models can succeed.
Personalized Medicine and Value-Based Healthcare
Personalized medicine has the potential to revolutionize the healthcare and CDMO industry. The introduction of diagnostic and informatics approaches has enabled scientists to understand the molecular basis of disease, particularly the genome. A detailed account of an individual’s genetic makeup can help research-oriented healthcare companies to include or exclude a specific individual on a timely basis.
Ultimately, it will lead to faster and smaller medical trials leading to lower research costs. Pharmaceutical companies are in better shape to develop medicines for individual patients based on the patient’s genome.
There is no doubt that the concept of personalized and precision medicine is a new research endeavor that can offer products tailored to individual patients. It allows companies to increase the quality of care rather than focusing on quantity.
These advances and trends will contribute to the growth of the global CDMO industry. Considering the mentioned trends can be an important year for the healthcare industry.