Why is Life Sciences Depending on CMOs?

It is no brainer that the life sciences industry outsourcing the manufacturing and other contracted services is undergoing significant disruption.

Fremont, CA: Advanced technologies, consisting of automation and the cloud, coupled with evolving manufacturing capabilities, have extended outsourcing functions. In turn, the manufacturers are revolving their business models, and the cost optimization estimates to this new paradigm in which there is an increased reliance on the contracting services.

Production Capacity

Cost optimization stays as a significant reason why the companies outsource. It is simply less expensive to collaborate with a CMO to produce a product than to do it in-house. Second, as the industry transitions towards more complex biopharmaceuticals and massively personalized medical therapies and devices, there is a more massive demand for manufacturing capacity. A 2019 study indicates that an accelerated use of outsourcing occurs on nearly all life sciences fronts, including the biologics and data-driven clinical innovations that involve patient-centricity, risk-based monitoring, and the digitization of clinical trials.

Supply Chains and Snags

Greater manufacturing capacity needs to drive an increased complexity in the supply chain operations and make it more difficult to manage them. 

Most of the so-called “new sciences,” like CAR-T cell therapy and small molecular pharmaceuticals, need smaller batches and complex technological components, at times for individual patients. As a result, every effort is made to lessen the time-sensitive delivery windows.

This places more pressure on the companies and CMOs to carefully coordinate their planning, scheduling, manufacture, and delivery operations. A completely new level of collaboration is required for this kind of supply chain management to be profitable. To ensure that products have their intended consistency, quality, and purity, manufacturers gather copious amounts of data in the product life cycle and impart it to the contract partners via tech transfers to gain regulatory approval.

Collaborative Solutions

For the life sciences manufacturers to collect a return on investment (ROI), a high degree of precision in production processes and quality system complexity is needed to mitigate the risk and increase speed to the market. Still, many companies carry on to depend on the disconnected, paper-based data systems for production and the quality of data. These slow, manual systems lead to errors and delays that result in operational efficiencies and high risk, which becomes compounded with the external partners in the supply chain.

See also: Top CMOs