The pharmaceutical industry has faced competitive pressures over the past decades amid an ever-changing market and regulatory framework, rising operations costs, and a widening skill gap. To tackle these issues, many pharmaceutical players are increasingly outsourcing their manufacturing needs to Contract Manufacturing Organizations (CMOs) specializing in pharma product manufacturing. One study reveals the pharmaceutical CMOs market value was valued at $98,487 million in 2021 and is projected to grow at an impressive CAGR of 6.9% in the period between 2022 and 2032. Sterile injectable outsourcing is an effective way to cut production costs, reduce time to market, and save on operational costs. This blog discusses the role of CMOs in providing cost-effective solutions for sterile injectable outsourcing.
Benefits of Sterile Injectable Outsourcing to CMOs
A contract manufacturing organization (CMO) is a third-party company that manufactures pharmaceutical products on behalf of other pharmaceutical companies. CMOs are typically experts with a massive manufacturing capacity for drug products and APIs. They can perform full or partial manufacturing and drug development on behalf of their clients. The scope of CMO manufacturing may include the following:
- Manufacturing from start to finish, including aseptic filling
- Drug coating
- Packaging of drugs
- Labeling of the drugs
- Drug distribution
Advantages of Sterile Injectable Outsourcing to CMOs
Previously, pharma companies outsourced their manufacturing to acquire new skills or fill gaps in their internal capacity. However, today, outsourcing product manufacturing to CMOs comes with an array of benefits. These include:
Cost savings through economies of scale
Manufacturing a new drug is a long, intricate, and costly process, more so for startups with limited resources. Today, the expected cost of developing a new drug ranges from $1 billion to $2 billion. When you decide to manufacture your products in-house, you will need significant capital expenditure to set up the necessary infrastructure, equipment, and personnel. Outsourcing your manufacturing eliminates these costs since the right CMO already has the infrastructure and equipment to produce your product in whatever quantities you need. CMOs leverage streamlined processes and economies of scale to cut manufacturing costs and time to market. With the savings you make, you will invest more resources in R&D and other critical areas.
Access to specialized expertise and cutting-edge facilities
CMOs specialize in providing cutting-edge manufacturing solutions to the industry. They boast a vast experience and expertise in the drug development niche, including knowledge of industry trends, new production technologies and facilities, unique customer needs, and regulatory requirements. This enables them to offer valuable insights and support to pharma companies looking to optimize their operations and improve their performance. In a nutshell, outsourcing your manufacturing to a quality CMO can give you access to a broader range of skills and expertise than you may have in-house.
Flexible production capabilities and scalability
CMOs can quickly scale up or scale down their operations to meet changing business needs. If your company is set up purposely for research and testing, you may not have the tools or in-house expertise to suddenly change from a lab to a factory to suit the changing market needs. Even when you have invested in your own manufacturing facilities, it can be difficult to predict demand for your product to determine how much capacity to build. Should the demand rise beyond your capacity, you won’t be able to meet the need promptly. If it is less than your capacity, you will likely have costly equipment, facilities, and staff you don’t need. Partnering with a CMO gives you the flexibility to respond to market dynamics promptly without committing to a long-term investment or bearing the risks of excess stock. It allows you to produce what you need when you need it while avoiding the cost of new investments or worrying about ending up with excess stock.
Reduced capital and operational expenditures
When you utilize sterile injectable outsourcing, you efficiently transfer a portion of your capital and operational costs to a third party. A study by the International Organization for Standardization (ISO) reveals outsourcing can help a company reduce an average of 15% of their operational costs. Working with the right CMO means fewer employees to pay, less working space needed, fewer manufacturing equipment and utility expenses, and reduced training costs.
Faster time to market
Time to market is crucial for pharmaceutical companies looking to scale up their operations. The longer you wait before bringing your product to the market, the higher your risk of losing lucrative market share to your competitors. Outsourcing your sterile injectable manufacturing to a CMO can be an effective way to achieve a faster time to market. CMOs typically leverage streamlined manufacturing processes to produce their products quickly and efficiently.
Focus on core competencies
Outsourcing sterile injection manufacturing can also help you focus on your core competencies. By outsourcing functions such as drug production, costing, packaging, labeling, and distribution, you devote more time and resources to the core business operations, such as research and development, product innovation, and strategic planning. This ultimately translates to greater efficiency, higher productivity, and better innovation, leading to enhanced performance and profitability.
Factors To Consider When Selecting a CMO for Cost-Effective Sterile Injectable Outsourcing
Before you pick your CMO, it is essential to consider how outsourcing your sterile injectable manufacturing can impact all aspects of your operations, from research and product development to quality assurance and logistics. Rushing into an agreement with a manufacturer could risk the quality of your product. Here are some of the things to help you find a reliable and trusted CMO:
CMO capabilities and track record
A critical area to focus on when choosing a prospective CMO to partner with is their list of capabilities. Ideally, this will summarize the range of services they provide, the type of manufacturing they specialize in, and their certifications and regulatory compliance. You will also want to look at the manufacturer’s team and their experience with the type of products you need. Ask for examples of work similar to what you are looking for and review case studies and customer testimonials. A review of the CMO’s track record with regulatory agencies will also go a long way in helping you settle on the right company.
Communication and transparency
When establishing a relationship with a contract manufacturer, communication is essential. The entire partnership relies on the discussions you have, so you will want to determine how well they communicate. Use your initial contact to establish clear expectations and project timelines, and keep an eye out for mentions of excellent communications in reviews. The right CMO should maintain regular communication to address concerns and challenges promptly. They should also strive to build long-term relationships anchored on great CMO experience and insights.
Supply chain and logistics capabilities
Raw material procurement is the backbone of any manufacturing process. It plays an integral role in determining an organization’s overall success and profitability. The right CMO should streamline its supply chain and logistics to optimize cost-effectiveness. They should guarantee efficient raw material sourcing and procurement that ensures timely delivery of products to the market and minimized disruptions. The manufacturing organization should also invest in effective aseptic filling inventory management and warehousing solutions that help identify which and how much stock to order at what time.
Implementing Cost-Effective Strategies in Sterile Injectable Outsourcing
Reducing manufacturing costs and production expenses is critical for any pharma company looking to improve its competitiveness and profitability. The following are some of the tips to achieve cost-effectiveness in your sterile injectable outsourcing:
Optimize processes and improve efficiency optimization
Process optimization and efficiency improvement aim to reduce costs and reinvest in new areas to speed up business growth and improve margins. By continuously identifying wasteful spending, underutilization, or low return on budget, you can reduce costs by up to 25%. To achieve this, you may need to implement lean manufacturing principles and continuous process improvement. You should also strive to reduce waste and cycle time through streamlined processes and tap into automation and advanced technologies to enhance efficiency.
Prioritize quality control and compliance measures
The American Society for Quality reveals the cost of poor quality can eat up to 15% of an organization’s revenue. Successful manufacturers prioritize unwavering high levels of quality to cut production costs and reach the market quickly. Several issues related to compromised quality can affect revenues and profits, including scrapping defects, managing recalls, and product redesign. Compliance with regulatory standards and guidelines lets you track potential risks or waste during production. It also ensures the optimal utilization of resources for maintaining quality and cost-effectiveness.
Implement automation, inventory management, and other technologies
Finding a perfect blend of human resources and technology can enhance your cost-effectiveness. With the increased adoption of robotics and AI, the use of technology to perform some of the human roles in manufacturing is becoming popular. Adapting automation for repetitive manual tasks will not only reduce costs, but it will also result in faster, more efficient results with higher-quality output. In the long run, automation translates to optimized processes and enhanced manufacturing.
Contact Afton Scientific for Quality Pharmaceutical Contract Manufacturing Solutions
The changing pharmaceutical landscape has necessitated a shift in operations for pharmaceutical players. Today, many pharmaceutical companies are moving from centralized in-house manufacturing to outsourced manufacturing solutions offered by Contract Manufacturing Organizations (CMOs). The main reasons behind this evolution range from cutting costs, increasing capacity, and reducing time to market to flexible production capabilities and achieving higher scalability.
If you are looking for a reliable CMO to outsource your sterile injectable product manufacturing, contact Afton Scientific today. We are a US-based pharmaceutical CMO specializing in the sterile filling of small-volume injectable drugs. We have been delivering on-time manufacturing solutions for our clients for over 30 years. Contact us today to schedule a consultation.