Welcome to the ramarketing round-up, a weekly update on the latest news, views and insights from the pharmaceutical and life science sector…

US hospitals looking for CMOs to work with new generic drug business

A group of US hospitals have started searching for CMOs that could manufacture medicines on behalf of a recently established generic drug company.

Intermountain Healthcare, Ascension, SSM Health, and Trinity Health – which represent 450 US hospitals – announced the formation of their not-for-profit generic drug company last month.

The organisations, which consulted with the US Department of Veterans Affairs, explained the aim is to address “shortages and high costs of lifesaving generic medications.”

The plan is either to make drugs in-house or outsource production to contractors according to Intermountain Healthcare.

Daron Cowley, senior communications director at the organization told us, “After announcing the new company, we are now in an organizing phase.”

Pharma CMO

Consolidation in the CMO sector shows no signs of slowing down according to research by merger and acquisition advisors, Krumann Partners AG.

A new interactive map put together by the Swiss deal brokers revealed there are 23,000 facilities worldwide that are involved in the contract manufacture of pharmaceutical products.

Managing partner Dr. Christoph Bieri told us, “The CMO industry at the same time thrives and consolidates. It thrives because, on one hand, more products are commercialized by relatively small innovators, biotechs, which rely on outsourcing rather than tying up capital in plants.

“On the other hand, large originators focus their manufacturing network on complex products and try to outsource all commodity production. In this growing market, some CMOs use serial M&A to build platforms which are big enough to become strategic partners of their Big Pharma clients.”

EU CMOs beefing up tech offering and expanding into new markets

Competition in the pharmaceutical sector is driving CMO interest in drug delivery technologies and new markets according to analysis by GlobalData Healthcare.

The market insights organisation shared its thoughts in a blog post last week, explaining that efforts by European Governments to cut healthcare spending are impacting the contract manufacturing sector.

The organisation said cost controls are prompting CMOs to emphasise their capabilities outside the prescription drug market, with areas like over-the-counter (OTC) medicines, nutraceuticals and functional food being major growth areas.

GlobalData Healthcare also said some contractors have invested in drug delivery technologies on the basis that they have multiple applications in a wide range of markets.

The researchers also suggested that European CMOs are looking across the Atlantic for growth opportunities, citing a number of deals as the basis for this opinion.

CMOs have vital role in helping pharma comply with track and trace

CMOs have a vital role in helping drug companies comply with serialization laws soon to be rolled out in Europe and the US according to research by Cognizant.

The professional services firm advised drug companies to take a strategic approach to track and trace compliance and partner with a CMO in a document published last month.

The authors wrote, “Serialization compliance timelines across the globe are fast approaching, pushing pharmaceuticals companies to quickly meet compliance requirements. CMOs have, over time, become an important component in the pharma manufacturing ecosystem.

“In fact, CMOs are expected to generate $79.24 billion in revenue by 2019. Given this codependency, pharmaceuticals companies need to collaborate closely with their CMO partners on serialization to avoid compliance-related supply chain disruptions.”

Also this week…

European Commission has published its revised GMP guidelines on the role of manufacturers in managing recalls: https://www.gmp-compliance.org/gmp-news/effect-of-the-new-annex-13-on-complaints-and-recalls

European Commission and EMA publish updated advice for drug companies about Brexit: https://ec.europa.eu/health/sites/health/files/files/documents/ec_ema_notice_communication_brexit.pdf

DCAT Week publishes schedule: https://dcatweek.org/Schedule