Contract Services - Contract Services

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Pharma Contract Services

The pharmaceutical industry is rapidly advancing, and as it continues to grow, the need for pharma contract services and manufacturing providers is simultaneously rising too. Over the past few years, pharmaceutical outsourcing services have grown popular and brought significant changes to the pharmaceutical industry.

Several pharmaceutical and biotech companies have adapted to outsourcing various pharmaceutical processes to pharma contract service providers to meet on-demand services effectively. By doing this, these companies have been able to cut costs, lessen supply chain risks, prevent unnecessary capital expenditures, broaden their geographic reach, and boost operational cost and effectiveness.

The activities of these services providers can be administrated by pharmacy benefit managers.  Pharma outsourcing services cover every pharmaceutical process, including drug discovery, research, manufacturing etc., and they are contract-based. Learn more about pharma contract services, types, benefits and its impact on the pharmaceutical and healthcare industry.

Types of Pharma contract Service

Given the multiple complicated steps involved in drug development, there are various types of pharma contract services that handle each of the steps in the pharmaceutical manufacturing process. These pharma contract service types include Pharmaceutical contract manufacturing services, contract research and development services, pharma contract packaging services, contract clinical trial services, and sales and marketing services.

These pharma contract services are made available to the pharmaceutical and healthcare industry to reduce the burden of in-house drug development and manufacturing cost. Outsourcing services are an essential strategy utilized by pharmaceutical companies to help reduce competition from generic drugs, low productivity and the number of blockbuster drugs with patent expiration.

What are the most common types of pharma contract services?

Some of the most common pharma contract services include manufacturing outsourcing and research and development outsourcing. The contract research organizations (CROs) and contract manufacturing organizations (CMOs) meet the majority of the outsourcing demands of pharmaceutical companies.

The CROs provide pharmaceutical companies with preclinical drug development, development of the production process, clinical trial services and the development of drug delivery system. CMOs, on the other hand, handle the manufacturing process of APIs, formulations, drug dosage, intermediates, stability storage, and pharmaceutical raw materials.

How much do pharma contract services typically cost?   

The cost of pharma contract services is dependent on several factors. Some determining factors include geographic location or region, type of pharma contract services required, and the length of the contract among many others. Although the cost of these services varies, they usually cost less compared to in-house industry activities.

There are no fixed prices for these services due to the variability of the determining factors. However, due to high demand, CMO and CRO services tend to cost more. For instance, based on a recent report., in 2017 the global pharmaceutical contract manufacturing market had an estimated value of USD 92.314 billion and is expected to attain a value of USD 146.41 billion by 2023. During the forecast period, this is likely to grow at a CAGR of 8.08%. Although there are various regions influencing this global market, the Asia-Pacific market has had the most impact in recent years.

Why are pharma contract services important to the industry?

The global pharmaceutical industry and life sciences are faced with several challenges associated with regulatory policies, pricing, research and development processes, etc., and this has stunted the growth of these industries. With pharma contract services, pharmaceutical companies and life science industries are presented with an opportunity to address these challenges while gaining numerous benefits as well.

Pharma contract services, help to boost manufacturing efficiency, net earnings and cash flow, compliance with regulatory processes, and hasten research and drug development at a cheaper rate. They help reduce overall costs and the need for investments in capital-intensive facilities and maintain product quality. Also, contract services allow pharmaceutical companies to divert funds and resources to other areas and give room for innovations.

What to consider when hiring a pharma contract service provider

When deciding whether to hire a pharma contract service provider or not, it is crucial for pharmaceutical and biotechnology companies to consider the risks and benefits associated with it. These industries will need to consider certain factors to avoid any ambiguity or conflict that may arise during the agreed contract period.

Necessary factors to scrutinize include the financial capability of the pharmaceutical company and service provider, the experience of the contract service provider, payment terms, quality standards of the project deliverables, and comparative costs between in-house services and contracted services. The payment currency, validity period and validity of the contract prices, trade terms, and purchase quantities should also be considered when hiring a contract service provider.

What does a contract pharmaceutical sales representative do?

A contract pharmaceutical sales representative is responsible for handling the education, distribution, and sales of pharmaceutical drug products. Also, the sales rep helps in the development and establishment of contracts with drug manufacturers and healthcare professionals. They are employed by pharmaceutical companies to promote the use of pharmaceutical products and medical device between healthcare professionals and also monitor clients to get feedback after use.

Pharmaceutical sales representatives are deployed to work with specific drugs, conduct analysis on the sales and administration of those drugs, the effects on patient care, and introduce new specialized drugs to healthcare professionals within a targeted location. Pharmaceutical sales reps can either work independently (freelance) or partner with a pharmaceutical company.

How does contract manufacturing work?

In contract manufacturing, a pharmaceutical industry makes an agreement with a contract manufacturing organization (CMO). Here, pharmaceutical products are manufactured by the CMO under the brand name or label of the partnering pharmaceutical company. However, contract manufacturers offer these services based on their formulas, consumer designs, and specifications.

Given the cost of production of certain chemicals and pharmaceutical products, most pharmaceutical companies prefer to allocate the manufacturing process of these products to CMOs. Once the process is completed, the manufactured product is collected by the pharmaceutical company and combined with other chemicals to produce the desired end-result. In the majority of cases, the CMOs are contracted to handle the purchase and shipment of raw materials and the maintenance of the manufacturing facilities and equipment. With contract manufacturing, pharmaceutical companies and firms can reduce in-house production cost.

What is the difference between a contract service provider and a pharmaceutical company?

Contract service providers are organizations or firms that provide a specific or a variety of services to pharmaceutical and biotechnology companies based on a previously established contract. These services range from drug discovery and development services to drug manufacturing and packaging services. These organizations, however, have little to no control over data security and are difficult to regulate.

Unlike pharmaceutical companies, the products and services they render are manufactured under the label or brand name of the contracting pharmaceutical company. These firms handle third-party local operations. On the other hand, a pharmaceutical company is one that is licensed to discover and research drugs, develop and market or distribute generic or brand medications within the healthcare industry. These companies have higher compliance with FDA regulatory policies and have better control over data security.

Top pharma contract services companies

Pharma contract service companies perform several functions and help to reduce the burden of production and manufacturing be pharmaceutical companies. They are several specialized contract companies such as contract development and manufacturing companies, contract research organizations, and contract testing laboratories, etc., that help to reduce the overall cost of production through outsourcing research, testing, drug development, and many others. There are top pharma contract service companies that provide these services and more, while also impacting the pharmaceutical industry. The majority of these key players have been listed below.

Who are the top pharma contract service companies?

The pharma contract service market has experienced exceptional growth over the years. Some of the key players have influenced the development of this global market in the pharma outsourcing industry. They include Catalent Pharma Solutions, Catalytica Pharmaceuticals, Dr Reddy's Laboratories, Pfizer, Cambrex, Boehringer Ingelheim Pharmaceuticals, Siegfreid USA, AbbVie Inc., Cambrex Corp., Patheon, Lonza, Inc., Contract Pharmacal Corp, Xcellerex LLC, Teva API, Roche, Delpharm, Alcami Corporation, etc.

How is success measured in pharma contract service companies?

 Measuring the benefits and success of pharma contract service companies is a complex process. It involves a precise analysis of quantitative data to compare cost, return on investment, scalability, revenue, health, effectiveness, and efficiency as well as other qualitative factors such as feedbacks and reviews. Assessment of business economics influenced by the pharma contract services, comparative study for sales force effectiveness, etc., can aid in measuring the success pf pharma contract service companies in delivering consistent quality services.

The way the success of pharma contract service companies is measured is also dependent on the degree of outsourcing performed, a model for monitoring and measurement, and even the function it is leveraged on.

Why is it important to partner with a trusted pharma contract service company?

Bringing new drugs into the global pharmaceutical market is a complex and lengthy task that will require thorough research and development, the use of specialized manufacturing equipment, and experience with regulatory policies, etc. As a result of this, several companies are continuously seeking the services of pharma contract service providers such as contract manufacturing organizations and contract research organization.

Regardless of what you need a pharma contract service company for, you need a trusted one to provide quality services, as a wrong choice can result in devastating consequences. With unverified pharma contract services and lack of transparency, you may face low-quality standard and value production, partnership problems, and regulatory compliance problems (policy issues, medical device and equipment used). This can, in turn, affect the sales of drug products, give rise to significant health care issues, and hinder the growth of your pharma company.

How to find the right contract services for your pharma company?

Pharmaceutical contract services can only be beneficial to your pharma company if you find the right one. Pharmaceuticals and biologics companies are in a constant search for reliable partners who will boost their drug production process through a consistent supply of products and services. However, in most cases, pharmaceutical companies find it challenging to choose the right contract manufacturing services needed for the success of their pharmaceutical product and the company’s overall performance.

Although pricing is a vital factor to consider, several other essential factors must be considered. To find the right contract services for your pharma company, you must first establish your drop development needs, then scrutinize your list of partners based on certain factors. Relevant qualification and experience in producing pharmaceutical products at different clinical and commercial phases, manufacturing capacity and quality, and financial stability should be considered when searching for a suitable contract service provider.

Also, the geographical location, GMP and regulatory compliance, reliability, personnel, and technical capabilities of your desired manufacturing partners should be critically reviewed. The kind of partnership or relationship desired, short-term or long-term should also be put into consideration.

Where can you find the right contract manufacturer for your pharmaceutical product?

As technology continues to evolve, accessibility to various services and information is made even more comfortable. Almost every service provider can be found on the internet, and contract manufacturers aren’t an exception. Pharma contract manufacturers can be found online, through manufacturing consultancy companies, through recommendations from pharma company owners. After contract manufacturing organizations are found, relevant research and comparisons can be carried out to make the final choice.

How do you determine your contract drug development needs?

After deciding to work with a pharma contract service company, the next step is to determine which pharma contract service is right for your pharma company. The outcome of this decision is dependent on your company's existing capabilities and your drug's specifications.

What type of drug does your company intend to produce and what is its estimated market size? The type and class of drug will determine the technical proficiency and technology needed for effective drug development and contract manufacturing. Sometimes, CMOs only have specific manufacturing and development capability available; therefore, market size is an important factor that helps you determine your needs and choose a suitable partner. A standard contract manufacturing organization should be able to assist your pharma company in moving from the clinical to commercial scale.

What are your pharma company’s in-house capabilities? Your drug developments needs will influence the kind of manufacturing and development solution you are in search of. You may be in search of complete or incomplete contract development and manufacturing solutions or a contract partner to fill in for your pharma company in places that it is lacking. Also, the drug phase is essential. The stage of clinical trials and commercialization of your drug will also determine your development needs in a contract manufacturing partner. In-depth knowledge of your contract drug development needs and the designated timeline is essential for the identification of the right contract manufacturing organizations for you.

Why should companies research and compare contract services companies before entering into an agreement?

The decision-making process is a long and arduous one requiring thorough research and comparison to determine the best and most trusted contract services for your pharmaceutical company. In-depth research into the history and activities of contract services providers give pharma company owners a well-informed idea of the experience, reliability and capability of service providers to provide the desired end-result consistently. With due research, pharma companies can compare skills and expertise, experience, pricing, and other factors based on their unique needs before establishing a contract agreement. The final choice will determine drug costs, general expenditure, efficiency, etc.


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