Page 35 - CW E-Magazine (Oct-Nov-2023)

Pharma Services

The road ahead for CDMOs in 2024

hether it’s an imminent sup-
ply chain reckoning, or a raft
W of new modalities, excellent
opportunities still abound for the ‘right’
CDMOs

The last several years have been tu-
multuous for the CDMO sector. Some
companies benefited from a surge in
demand for COVID vaccine and thera-
peutic manufacturing capacity, while
others struggled to maintain supplies of
key components and materials, and the
drop in COVID-vaccine demand and
therapeutic obsolescence due to virus
variants have caused further disrup-
tion. The decade-plus of low interest COVID and OWS continue to re- Restructuring supply chains
rates gave way to inflationary pressures shape the world The desire to restructure supply
that impacted biopharma pipeline fund- No matter how much we act like chains through onshoring, nearshoring,
ing and workforce hiring and reten- the pandemic is behind us, COVID and friendshoring, etc. will only gain steam
tion. Trade issues and generic market Operation Warp Speed (OWS) continue in the US and elsewhere – repeat after
erosion have created opportunities for to reshape the world. Lockdown and ex- me: everybody has a shore – though it’s
some while shutting out others. And port bans created an instant stress-test unclear how extensive those changes
the promise of new modalities has been of global supply chains. CDMOs had can be. The 2020 publication by the
tempered by slow regulatory reviews, to adjust to delays in critical materials US Department of Health & Human
manufacturing hurdles, and other ob- while also protecting their workforce. Services (HHS) of a Critical Medicines
stacles. And then there’s AI . . . As the months progressed and OWS led list has become a jumping-off point for
to unprecedented acceleration in vaccine initiatives aimed at refashioning the US
These and other factors affect the development and production, CDMOs pharma supply chain.
CDMO sector just as they do the larger who were not part of that effort had to
biopharma industry. Let’s look at some contend with government reallocations Some parties are trying to determine
of them and see what they may portend of resources via the Defense Production which medicines are really critical, and
for the next several years ahead. Please Act to prioritise vaccine manufactur- how can their supply chains be better
note that when it comes to predictions, ing. This (semi-) artificial supply chain protected from system shocks and trade
there’s an awful lot that can derail them, constraint further tested production wars. This has led to the realisation
like a pandemic, a natural disaster, or timelines at CDMOs and the viability of that, even if APIs and dosage sites are
an unexpected election result (there are global manufacturing networks. located in “friendly” nations, key start-
also surprise boons, like a potential $50 ing materials and excipients are likely
billion market for weight-loss drugs What came from this was a height- sourced from “not friendly” nations and
springing up virtually overnight!). Also ened awareness of supply chains, which can’t readily be made elsewhere.
of note: my role as President of PBOA will have a major impact on the CDMO
means I spend most of my time involved sector in the years ahead. (The OWS ini- So, even though globalisation has
in policy advocacy – both regulatory and tiative and the role of CDMOs like Catal- put hard limits on it, various nations and
legislative – rather than market-driver- ent, Grand River Aseptic Manufacturing regions are developing similar priorities
watching; between that and my vast and Lonza in the pandemic response for ‘domesticating’ their supply chains
overlapping network of NDAs, there are also created a heightened awareness of to a greater or lesser extent. Canada, for
some trends I can allude to without nam- CDMOs among the public, which I gen- example, realised it had no scaleable
ing names, as it were. erally consider a good thing.) vaccine manufacturing capacity dur-

Chemical Weekly October / November 2023 31