The 2024 Pharma Outsourcing Forecast: strategic partnerships across global landscapes

For the pharmaceutical industry, outsourcing drug development, manufacturing, and research operations to contract organisations is not just a passing trend – increasingly, the partnership between drug sponsor and drug vendor is one of vital importance. For those pharmaceutical companies and biotechs looking to focus on their core competencies, pharmaceutical outsourcing partnerships are essential to smooth and efficient operations in the pharmaceutical supply chain. In fact, more than 50% of pharmaceutical executives anticipate their outsourcing activities to increase in the next 5 years. 

These partnerships are dynamic, constantly evolving to meet the changing demands of the pharma industry. As the industry cycles through economic and operational booms and busts, attitudes towards outsourcing partnerships have shifted from transactions to strategic alliances for all parties involved. Our 2024 Outsourcing Forecast explores global trends in the pharmaceutical outsourcing sector. We seek to understand and evaluate what the future holds for outsourcing activities for pharma companies and contract organisations alike. 

Topics covered in our 2024 Pharma Outsourcing Forecast include: 

Integration and end-to-end services: Contract organisations are now offering a range of services across the supply and value chain. Such offerings incentivise a collaborative partnership for the drug sponsor with the vendor. By working with one contracted organisation throughout the drug product pipeline, a deeper and more intuitive relationship is fostered, past the monetary obligations for both parties. “Sponsors are picking companies that can do more for them,” states Stuart Needleman, Chief Commercial Officer & Chief Patient Centricity Officer at Piramal Pharma Solutions, for our report. “Other emerging strategies we often see are increasing emphasis on ESG, business resiliency, diversity and inclusion, and cybersecurity. This is a change from the past, where technical expertise trumped all else.” 

The more the merrier – risk-sharing partnerships: While a collaborative relationship might be a more pleasant attitude towards any working partnership, economic and operational incentives are not completely gone. Sharing the risk involved with the development and manufacturing of a new drug product pushes both drug sponsor and vendor to uphold their end of the partnership. “For projects involving novel technologies, biopharma companies are more likely than in the past to co-invest with CDMOs on installation of necessary equipment and development of the needed expertise,” says Jason King, Director of Business Development at Ascend. “Similarly, in general, there is a trend towards more risk-sharing, particularly for early-stage projects, so CDMOs don’t get left empty-handed if a biopharma company halts a project mid-stream.” 

Novo Nordisk’s Catalent acquisition: In February 2024, Novo Holdings announced their acquisition of Catalent, a publicly owned CDMO for US$16.5 billion. The holding company is the major shareholder of Danish pharmaceutical giant Novo Nordisk. Many experts believe the acquisition is driven in part by Novo Nordisk’s bid to solidify their manufacturing and distribution of GLP-1 products Wegovy and Ozempic. All eyes will be on outsourced manufacturing trends as some firms call for their own means of manufacturing, while others do not see the acquisition of a CDMO by an operating company becoming a trend. The next few years will keenly observe how drug vendors and contract organisations will respond to changing partnership dynamics and future merger and acquisition activities. 

Relationships between pharmaceutical companies and CDMOs/CMOs/CROs are constantly evolving to meet shifting industry demands. Additionally, all stakeholders including shareholders, patients, and healthcare providers are forcing the pharmaceutical supply chain to re-evaluate a strategic partnership for their outsourcing needs. As Parexel experts Kerri McCaul-Claus, VP, Solutions Consultants & Biometrics, and Neil Berger, VP FSP Commercial and Operational Strategy state, “Both the contract organisation and the pharmaceutical partner should enter the agreement with a true intent to partner. You need a shared will, passion, and core drive to enable a healthy partnership to grow.”