UBM’s decision to move Informex from its traditional February slot in attractive cities such as New Orleans to the more prosaic location of Philadelphia in May and to pair it with a North American version of CPhI appears to have paid off, judging by the response on the show floor at the first event. Much of that will have been down to timing.
Recent years have been broadly positive for suppliers to the US pharmaceutical industry for multiple reasons. There is an improving pipeline at all stages of development, thanks in part to FDA’s increasing use of accelerated approvals and the improved funding available to biotech and small companies. Customers, some chastened by bad experiences and influenced by growing numbers of warning letters to (mainly) Indian companies — or just greater awareness of the true cost of outsourcing to Asia — have returned to Western suppliers.
Whereas suppliers of all kinds of services at all stages of development have enjoyed the benefits, to varying degrees, American-based CDMOs have been among the most fortunate. Their increasing attractiveness to investors was, indeed, demonstrated on the eve of the show when the largest of them all, Patheon, was acquired by Thermo in a financially driven deal.
Senior executives from CDMOs present in Philadelphia agreed that the clearest trend in the market was that business has been strong and will be for the foreseeable future. This applies to both drug substance and drug product, although the two markets differ markedly in other ways. All, likewise, agreed on why, but said that customers’ desire to place manufacturing in the West in general, and the US in particular, goes deeper than the obvious reasons.
“I also see a deeper analysis of the overall cost of a project — the cost of time, the cost of quality and the cost of logistics — and the challenges that can have on the supply chain,” said Dr Garrett Dilley, Senior Director of Business Development, Sales and Marketing at Johnson Matthey (JM), which has three US east coast sites in its global active pharmaceutical ingredient (API) manufacturing network.
“Companies are finding that working with a quality partner with locations proximal to where they are making their drug product and delivering to the patient is actually providing value — as is a strong regulatory background,” Dilley added. Registered starting materials (RSMs) matter too. FDA is also scrutinising the early stage of supply chains more and this is leading clients to start GMP synthesis earlier in some cases.
“Even if they don’t start earlier, customers are interested in having their RSMs produced to a level of sophistication and to a regulatory specification level higher than they had previously sourced. They need to understand everything about the facility, the traceability of the reagents that went into it, and so on.” This plays to the strength of JM, which can source RSMs from its own facility in China at lower costs … but to Western quality standards.
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