CPhI Releases Part 3 of its Annual Industry Report

CPhI Worldwide released Part 3 of its second annual industry report. In part three of the report, industry experts discuss the future of the pharmaceutical industry and what strategies companies need to adopt to stay successful. The experts include Hedley Rees, managing director at PharmaFlow, a biopharmaceutical development, manufacturing, and supply chain consultancy; Hendrik Baumann, CEO at Arevipharma, a manufacturer of APIs and intermediates; and Lukas Utiger, president of DPx Fine Chemicals and Integrated Offering, specializing in pharmaceutical services, fine chemicals, and proprietary products and technologies.

In the first of three expert industry insights, Rees discusses the value of “upfront planning” in the early stages of development and how “commitment dilution” can negatively affect the supply chain. According to Rees, many small companies don’t have the resources to invest in development at the concept stage. Many large companies, on the other hand, tend to wait until the chances of success are more stable before committing to a project. This lack of commitment and investment in the early stages of development can affect the overall supply chain, according to Rees. The supply chain involves partnerships, quantity and quality of materials, knowledge, channel complexity, and package handling. The only way to combat the issues that may arise in the supply chain, Rees continues, is to place a larger emphasis on supply-chain management early in the development stage and to involve all parties at an early stage to ensure product quality and cost efficiency.

Baumann, CEO at Arevipharma, takes a look at the European API manufacturing landscape. Baumann states, “while significant price erosion has taken place, regulatory requirements have constantly increased.” He comments that in the case of API producers in Europe, success lies not only in quality and cost, but in differentiation from large-batch API manufacturers in Asia. API manufacturers in Europe face challenges such as patent protection, price pressures, relocation of large production APIs, technology, and cGMP compliance training. Baumann predicts the continuous growth of biopharmaceuticals, an increase in the popularity of personalized medicine, the growth of cancer treatments, and the continuation of mergers and acquisitions in the biopharmaceutical sector as some of the future influences on the European API market.

Utiger, president of DPx Fine Chemicals, discusses the importance of strategic partnerships and how combined expertise and knowledge can be used to expand production. Using the merger between DSM Pharmaceutical Products and Patheon as an example, Utiger believes that the pharmaceutical industry is undergoing a transformation centered around consolidation. Utiger states that companies should focus on CDMOs to help stabilize the industry. “Long-term, CDMOs can create more equal partners in the pharmaceutical industry, especially with mid to large pharma companies,” Utiger states in the report. Similar to Baumann, Utiger points to “an imbalance between supply and demand of manufacturing capacity, especially in API CMO” that causes unsustainable price pressures. Utiger continues by predicting that the CDMO space will be consolidated further, leading to fewer pharmaceutical companies holding a larger portion of the value chain.

Source: CPhI