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    Features

    Outsourcing Strategies: Skills and Heritage

    Pharma industry trends driving growth in the CEE outsourcing sector

    Outsourcing Strategies: Skills and Heritage
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    Dr. Richard Král, CMO Sales Director, Saneca Pharma10.10.18
    The criteria adopted by pharma companies when selecting and managing outsourcing partners as part of global manufacturing or development strategies is constantly evolving.

    Low-cost services offered by operators in the Asian market led to a surge in pharmaceutical manufacturing in the region, but quality and supply chain concerns have seen companies returning their development and production to Europe. 

    In this environment, Central and Eastern European (CEE) countries are emerging as competitive and highly sought-after sources of contract manufacturing services.
    In this article we’ll explore the pharma industry trends that are driving growth in the CEE outsourcing sector.

    Building true partnerships
    Quality and cost-effectiveness remain the hallmarks of a good outsourcing partner, but there are several industry challenges that are creating greater reliance on contract manufacturers. 

    The European pharmaceutical industry has grown quickly and continuously over the last decade in the face of several pervasive challenges such as escalating drug development costs and price pressures from healthcare systems and governments. The cumulative effect has been an increased demand for faster turnaround times to bring products to market more efficiently.

    There is also a trend for pharmaceutical companies to redefine their offering by selling parts of their business to allow in-house resources to focus on successful, core business areas. By outsourcing additional services according to customer demand, these companies have been able to make huge cost and time savings.

    Contract development and manufacturing organizations (CDMOs) with the capability to take a product through its entire lifecycle—from development, through trials to scale-up and commercial manufacturing – are increasingly coveted by pharma companies. Single suppliers offer reduced lead times and cost savings, and a leaner supply chain overall.

    This trend has had a positive effect on CDMOs which are seeing a higher demand for a broader range of outsourced services to plug the gaps in their customers’ in-house capabilities. This has led many CDMOs to expand their offering to become full-service providers to remain competitive. While niche service providers will continue to exist, there is an increased focus on developing ‘true partnerships’ with CDMOs that are able to provide end-to-end services. When a CDMO can do this from a single site this helps to further streamline the supply chain for its customers.

    Controlled release technologies
    While the general market trend towards efficiency is driving much of the growth in the outsourcing space, further success is being fostered by niche demands that few businesses outside of the CDMO space can meet.

    One such area is the growing demand for controlled release technology. Higher acceptance of controlled release dosage forms is driving demand for technologies that can optimize the performance of both novel and existing drugs. The market is being spurred by the increasing commercialization of new controlled release technologies that are providing real options for drugs that may have not been viable candidates for controlled delivery in the past. At the same time, the market continues to be restrained by challenges in establishing desired release profiles, risk management of dose dumping and the selection of biocompatible materials with the necessary controlled release profiles.

    Developing and manufacturing controlled release dosage forms requires a uniquely high level of skill and pharmaceutical companies are increasingly asking their CDMOs for these services. CDMOs with expertise in this area can help drug manufacturers to speed-up time to market and reduce the overall cost of developing and manufacturing drugs in this way.

    CEE success
    The industry’s challenges have paved the way for CEE contract manufacturers to position themselves as reliable and cost-effective outsourcing partners across manufacturing, development and regulatory support services.

    Prime location
    Location has played a pivotal role in the success of CEE countries such as Slovakia as a base for pharmaceutical manufacturing. Easy access to major transport hubs such as Vienna, Munich and Prague and convenient links to wider European regions allows CDMOs in the region to provide quick turnaround and delivery times to their clients and bring products to market faster. 

    Skilled workforces and government support
    The expertise offered by the region’s CDMOs is a result of a highly-skilled workforce and a heritage in manufacturing. There are numerous high-quality universities across the CEE and a progressive approach has been adopted by national governments when it comes to giving CDMOs the opportunity to grow and develop. Several companies, including Saneca, have received substantial grants from the Slovak Ministry of Education, Science, Research and Sport to support new R&D initiatives for manufacturing active pharmaceutical ingredients (APIs).

    Heritage and resources
    Poppy is a traditional crop across the region, making it a preferred location for developing and manufacturing controlled substances such as opiates. For example, Saneca Pharma has a strong heritage in handling controlled substances and benefits from easy access to the required raw materials.

    Final thought
    The CDMO landscape will continue to evolve as the pharma industry places increasing emphasis on outsourcing. As new and more challenging drugs enter the supply chain, the demand for comprehensive development services, particularly controlled release technologies, will rise. The constant however will be a continued demand for competitive pricing and high quality. In the past, companies have looked Asia to generate these savings, but concerns surrounding the quality of drugs produced in this market means more and more pharmaceutical companies are keen to move their operations back to Europe.

    CDMOs that can offer a broad range of services, especially when they’re looking to develop long-term partnerships, will prosper and those in lower cost markets such as CEE countries will find themselves ideally placed to deliver a service that combines cost effectiveness, quality, technical expertise and speed-to-market. 


    Dr. Richard Král is CMO sales director of Saneca Pharma. He joined Saneca in 2015 as director of cosmetics sales and marketing. He has 19 years’ experience in the industry in various senior positions within the pharmaceutical industry in EU and CIS markets. Richard has a Doctor of Medicine degree from Charles University in Prague.
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