The rise of the CRDMO: Why integration is becoming the defining question in life sciences outsourcing

For most of the last two decades, pharmaceutical outsourcing has followed a fairly straightforward logic.

Sponsors assembled networks of specialist partners, selecting expertise where they needed it and accepting a certain amount of complexity as the price of accessing best-in-class capabilities.

That approach has delivered remarkable outcomes. Many of today’s most successful therapies have been developed through this carefully managed ecosystem, each link in the chain contributing expertise at different stages of the development journey.

Yet while the model remains effective, the environment around it is changing. By year-end 2022, biologic approvals narrowly overtook small-molecule NMEs for the first time – a milestone in a rise that’s been building since the late 1990s, alongside a ‘golden decade’ (2012–2021) of 445 total new medicines, up 76% from the prior decade.

As biologics, advanced therapies and personalized medicines occupy a larger share of development pipelines, sponsors are thinking more carefully about how programs move between organizations, how knowledge is retained over time, and how much complexity they are willing to manage in pursuit of specialist expertise.

Increasingly, the conversation is shifting towards integration.

Why integration is moving up the agenda

Outsourcing has always involved handoffs. Historically, those transitions have been viewed as a normal part of the process. They required planning and coordination, but they were rarely considered a strategic concern.

The growing complexity of modern therapeutics is changing that dynamic. In biologics and advanced therapies, decisions made during early development can have significant implications much later in a program. A prime example of this was a company in 2016 whose Phase II lipid-lowering compound used a batch process optimized only for small/intermediate scale; when it moved into large global Phase III trials, the firm couldn’t produce batches at the scale needed, and the resulting process change risked forcing the company to restart at Phase I.

Situations like this stress the importance of process characterization data, analytical methods, manufacturing assumptions and technical knowledge all needing to survive the journey from one stage to the next. 

When that transfer is incomplete, teams can find themselves spending valuable time reconstructing context, repeating work, or addressing issues that only become visible further downstream.

None of this suggests that multi-partner outsourcing is inherently problematic. Many sponsors continue to favor specialist providers precisely because of the depth of expertise they bring. However, it does mean that continuity is becoming a more important consideration than it was, particularly for complex programs where development and manufacturing are closely intertwined.

The growing cost of complexity

The challenge is not simply the number of partners involved, but the amount of coordination required to keep knowledge moving effectively between them.

As therapies become more specialized, the consequences of disconnected information become more significant. A manufacturing team may inherit a process without access to the reasoning behind key development decisions. Analytical methods that worked well in one environment may require extensive refinement when transferred elsewhere. Technology transfer activities can become longer and more resource-intensive when critical context has been lost along the way.

For sponsors, this often shows up as delays, inefficiencies, duplicated effort and avoidable program risk. For example, analytical method transfer alone can take up to 18 months for complex biologics, requiring transfer of 15–20 separate methods for products like AAVs. 

Individually, each issue may be manageable. Collectively, they can have a meaningful impact on timelines, budgets, and ultimately speed to market. That growing sensitivity to continuity is one of the reasons integration has become a much more prominent topic across the outsourcing sector.

CRDMOs are part of a wider industry shift

The rise of the Contract Research, Development, Manufacturing Organization (CRDMO) model is often presented as a new development, but the reality is more nuanced.

Several major outsourcing organizations have spent years building integrated capabilities that span research, development and manufacturing. Companies such as Thermo Fisher, WuXi AppTec, Lonza, and Samsung Biologics have all invested heavily in creating more connected development pathways, even if the terminology used to describe those models has evolved over time.

What’s changed is not the existence of integration, but the level of attention it now receives from buyers.

Sponsors are placing greater emphasis on how programs move through an organization, how knowledge is preserved between functions, and how easily teams can collaborate across different stages of development. As a result, integration has become an increasingly important part of commercial positioning and buyer evaluation.

At the same time, the category itself is still taking shape. Ask ten organizations what constitutes a CRDMO and you’ll likely receive ten slightly different answers. Some focus on service breadth. Others focus on infrastructure. Increasingly, however, the conversation is moving towards continuity, collaboration, and program ownership rather than capability lists alone.

Integration isn’t the same as consolidation

One of the reasons this topic deserves a more balanced discussion is that integration and specialization are not mutually exclusive.

There is a tendency in some market commentary to frame integrated outsourcing models as the inevitable successor to traditional multi-partner approaches. In reality, sponsors continue to make deliberate decisions about where specialist expertise adds value and where greater continuity may reduce risk.

A highly specialized provider can still outperform a broader organization in specific areas of development. Equally, an organization that offers research, development and manufacturing under one roof does not automatically deliver a more integrated experience. If teams operate independently, data remains fragmented, or knowledge transfer processes are weak, many of the same challenges can still emerge.

The distinction matters because buyers are becoming increasingly sophisticated in how they evaluate integration claims. ISR’s CDMO Outsourcing Models report (2025) found that 22% of respondents indicated that it was Very or Extremely important to use the same CDMO for both drug substance and drug product manufacturing, significantly lower than the 35% who answered similarly for using the same CDMO for development and commercial manufacturing.

Further insight from ISR’s Insights into CDMO Selection from the External Manufacturing Department report shows how buyers weigh up the pros and cons of securing one provider who can do it all. A Senior Director, External Manufacturing (Midsize, SM, DS+DP) stated:

“[On the good side,] you don’t have to deal with multiple stops and it’s turnkey and you just pay at the end. The bad is, one, that usually means you are tied to a longer lead time and then your usual safety stock inventory strategy sometimes might not apply. The other thing is, with integrated service you are usually tied into some sort of exclusivity minimum volume and it’s harder for you to move away from a vendor if they’re not performing.”

More and more, buyers are looking beyond organizational structures and asking practical questions about how programs are managed, how decisions are documented, and how expertise is carried forward throughout the development lifecycle.

What this means for outsourcing providers

For commercial and marketing teams, this creates an interesting positioning challenge.

For years, differentiation has often centred on capabilities. More facilities. More technologies. More services. While those factors remain important, they are becoming increasingly difficult to use as a standalone source of competitive advantage.

Continuity offers a different story.

Sponsors are not simply evaluating what providers can do; they are evaluating how providers work. They want to understand how knowledge is retained, how collaboration happens, and how programs move from one phase to the next without losing momentum.

That requires a more sophisticated narrative than generic claims about end-to-end support. The providers that are likely to stand out are those that can demonstrate, with evidence and real-world examples, how their operating model creates a better experience for clients and reduces friction throughout development.

Defining the category before it matures

Perhaps the most interesting aspect of the CRDMO conversation is that the market is still determining what success looks like.

Most organizations spend years trying to differentiate themselves within a well-established category. The current evolution of integrated outsourcing presents something slightly different: an opportunity to help shape how the category itself is understood.

The companies that succeed will not necessarily be those with the broadest service offering or the longest capability list. They will be the organizations that articulate a clear, credible answer to a question that is becoming increasingly important across life sciences outsourcing: how is knowledge preserved as programs grow more complex?

As therapies continue to evolve, that question is unlikely to disappear. If anything, it will become more important.

And for an industry built on expertise, the organizations that can demonstrate how expertise remains connected may find themselves in a particularly strong position.