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2017 Challenges for CROs and CMOs

2017 Challenges for CROs and CMOs
January 16, 2017 Leah Bradley

The ongoing political unrest in the UK and the US has brought about specific challenges for the life sciences industry. Jose Gonzalez looks at some of the challenges that Contract Research Organisations and Contract Manufacturing Organisations face during 2017.Jose Gonzalez, V Formation

Political changes on both sides of the Atlantic present new challenges for companies operating across a variety of sectors, but in particular, for the pharmaceutical industry. President Donald Trump is likely to put forward policies that will have an effect on pharmaceutical companies both in the US and the rest of the world; furthermore, the negotiations for Brexit adds some uncertainty to people developing leads for pharmaceutical companies.

Contract Research Organisations (CROs) and Contract Manufacturing Organisations (CMOs) should already have a business development strategy in place, but following this will be a challenge over the coming years. In an interview with Outsourcing Pharma, Ed Price, President of the CMO PCI Synthesis, points out the key issues that CROs and CMOs are likely to be faced with:

  • Inner capacity: CROs and CMOs generally increase their capacity and areas of expertise by acquiring complementary companies. During 2016, however, the acquisition and merging of companies within the pharmaceutical industry decreased. This trend is predicted to continue through 2017 due to the level of risk involved in these kinds of operations; extra taxation and bureaucracy surrounding an acquisition or merger would result in more expensive drugs.
  • Outsourcing overseas: The US FDA (Food and Drug Administration) is known to dictate the mechanisms needed to approve pharmaceutical products around the world, therefore a drug approved in the USA is likely to be accepted worldwide. Part of the product development process, however, is often outsourced overseas. For example, clinical trials are frequently outsourced to Belgium as they can be conducted quicker in that country. President Trump has been very vocal on his position to take many industries from other countries into the States, which may make clinical trials and drug development easier and faster.
  • President Donald Trump: The potential budget cuts into science and technology and the inclusion of an anti-vaccines promoter in his cabinet provide a great deal of uncertainty to the life sciences industry, and CROs and CMOs in particular. Aggressive foreign policies are likely to force US-based pharmaceutical companies to keep their outsourcing local. Worldwide pharmaceutical companies need to prepare and adapt to changing policies and tailor business development strategies according to these imminent changes.

Added to this, another key factor is the relevance of drug development projects in the pipeline. A change in the market’s size and the rise of alternative treatments based not only on chemical synthesis, but also on biological macromolecules, can make a drug discovered years ago no longer relevant to the current market. An increased price in raw materials, transportation and importation fees due to the rise or fall of international trade-market agreements will also have an impact on the pharmaceutical industry. CROs and CMOs should carefully consider all of the above in order to critically lay out a commercialisation strategy that is able to overcome these near-future challenges.

V Formation specialises in providing marketing support for the life sciences. We work with CROs and COMs to provide the business development and marketing expertise needed to overcome the challenges that many of these organisations face. For further information about how we work with life sciences businesses, contact Sue Carr on 07809 727533 or click here to send Sue an email.