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Supplying the future: how to develop effective contract manufacturing relationships

corresponding

J. PAUL MADELEY
Synth-Isis Ltd, 14 Manor Road Abingdon, OX13 6DG, United Kingdom

Abstract

Contract manufacturing has enabled many companies to reduce the manufacturing costs of established drugs and to truncate the development of new drugs by accessing the knowledge of those already familiar with this area. Yet for many, these interactions fail to yield all of the promised benefits, so that considerable time (and cost) is incurred in the search for other service providers because the first-chosen partner company failed to deliver. This article is intended to help companies who are new to contract manufacturing to make better choices of contractor through asking the appropriate questions and considering the risks involved in outsourcing.


It has been estimated that the cost of bringing a new drug to the market has risen to $1.3 billion, yet the number of new drugs reaching the marketplace continues to decline. The remaining patent life of newly launched drugs is notoriously short, which leaves little time to recoup the money invested in their development. Most drugs entering clinical development do not make it to the market and the cost of these failures skews the average cost of those that are successful.

Manufacturers of generic copies of originator drugs can at least be sure that a market exists for their products and that pricing pressures from the healthcare providers favour low-cost alternatives. The risk to these companies may therefore be considered somewhat lower, although it must be remembered that this too is a very competitive industry. Generics companies are seeking to launch their versions of existing drugs on the day the patent expires and sometimes challenge the validity of patents before expiry in order to access the market early.
It has been estimated that more than $63 billion of annual income will be washed away from the pharmaceutical industry due to patent erosion in the peri ...