Fig. 2: Selected Budget Change Comparisons, 2009-2013
estimated 2.6% rise last year, respondents are projecting another 4.3% increase in budgets for hiring new operations staff.
Similarly, after a 2% gain last year, this year the estimated budget increase for hiring new scientific staff stands at a robust
These are important figures because the industry tends to be
very people-oriented. Organizations simply cannot achieve the
efficiency gains they desire without hiring, training and retaining
high-quality talent. This is especially the case in production and
process development areas.
Fewer respondents are downsizing to reduce costs. This
year, when we asked the industry which actions they had taken
during the past 12 months to reduce overall costs, 28% said
they had reduced headcount, a 22% relative drop from 35.9% of
respondents last year, and an even bigger drop from 40.6% in
2011. That suggests that the industry is not cutting back, and
coupled with the above data, indicates instead that facilities are
actively looking to invest in talent to increase productivity.
OPPORTUNITY FOR CMOS?
Our data suggests that CMOs might be well positioned to take
advantage of new trends in cost-cutting actions. While this year
there was a clear trend towards less cost-cutting activities, one
area stood out in the data: outsourcing.
In fact, there was a general increase in the proportion of respondents this year who said they had outsourced activities for
cost-cutting reasons. A few of these are shown below:
- Outsourced jobs in manufacturing ( 16.8% this year, versus
11.8% in 2011);
- Outsourced manufacturing to domestic service providers (14%
this year, versus 7.1% in 2011);
- Outsourced manufacturing to non-domestic service providers
(off-shoring; 12.6% this year versus 5.7% in 2011)
This indicates that cost concerns may be playing a greater
role in the decision to use a CMO, rather than manufacturing in-
house. Separately, our study shows that outsourcing is becoming
more of a strategic priority. If CMOs are able to marry their ex-
pertise with a perception that they also provide cost-savings, the
use of outsourcing is likely to rise even more than it already has.
Our current study reviews 10 years of bioprocessing trends
and signals an expanding opportunity for CMOs, who often
have the technical expertise to offer clients, in addition to their
basic manufacturing efficiency. Yet being able to meet the client demands involves CMOs themselves becoming leaner and
more efficient to support their dual roles as value-adding and
cost-saving partners. The CMO model involves multiple projects
in the pipeline, reduced capital investment and fast turn-around
– each of which requires a commitment to
optimization of process and design.
It’s clear from our data that focusing on
elements, such as design of experiments,
related to process development, have been
working for CMOs. Given their different infrastructure needs, it’s understandable also that
CMOs might realize productivity gains on the
back of better plant design.
But as to whether CMOs’ performance-im-provement approaches have created a long-term advantage for their clients through technical expertise and cost-saving, time – and
the balance sheet – will tell.
1. 10th Annual Report and Survey of
Biopharmaceutical Manufacturing Capacity
and Production, April 2013, Rockville, MD
Survey Methodology: The 2013
Tenth Annual Report and Survey of
Capacity and Production yields a composite view and trend analysis from 238
responsible individuals at biopharmaceutical manufacturers and contract manufacturing organizations (CMOs) in 29
countries. The methodology also included
over 158 direct suppliers of materials,
services and equipment to this industry.
This year’s study covers such issues
as: new product needs, facility budget
changes, current capacity, future capacity
constraints, expansions, use of disposables, trends and budgets in disposables,
trends in downstream purification,
quality management and control, hiring
issues, and employment. The quantitative
trend analysis provides details and comparisons of production by biotherapeutic
developers and CMOs. It also evaluates
trends over time, and assesses differences in the world’s major markets in the
U.S. and Europe.