The global pharmaceutical contract manufacturing and research markets are poised for continued growth as we move into 2015. The burden of patent expiries of blockbuster drugs, stringent government regs, increased competition, shrinking margins and strong pricing pressure are all issues weighing down pharma players across the board. Their reaction has been to channel resources into core areas of expertise such as drug commercialization while unloading other operations such as manufacturing, for instance, to third party service providers. Other macro trends including rapid growth in emerging markets that is fueling global healthcare reform should also pave the way for more opportunities for service providers as pharma focuses on these growth engines.

Divyaa Ravishankar, senior industry analyst at Frost & Sullivan Life Sciences hones in on these themes in, “What is Driving the Outsourcing Market.” She says CROs have become an integral part of every pharma company as they tend to heavily rely on outsourcing service providers to perform even their basic tasks and improve their productivity. Growth for CRO revenues is even outpacing R&D spending, which signifies an increased penetration of CRO services.

Also looking at the year ahead, James Streeter, senior director at Oracle Health Sciences, says reducing the cost of clinical trials again likely tops the list of New Year resolutions for many health sciences organizations. In, “2015: Resolve to Take a Closer Look at Risk-Based Monitoring,” Mr. Streeter says clinical trials cost 60% more today than they did just five years ago and that driving down these costs, while grappling with intense pressure to accelerate time-to-market for new therapies, presents a formidable challenge.

Switching gears, a look at the pharmaceutical fine chemical market reveals the size of the demand in this segment is a highly controversial topic, according to Enrico T. Polastro of Arthur D. Little. He says the wide-ranging estimates reflect a combination of factors, but there is a steadily increasing share of pharmaceutical fine chemical outsourcing growing 2-3% per annum.

On the supply chain front, consultant George Tyson walks us through an approach on how to get a good start in identifying and screening potential suppliers before making a major commitment to them. In, “Supplier Selection: A Roadmap to a Good Start,” he emphasizes that good supplier selection is a key element of success in the pharmaceutical industry today.

In addition to the diverse range of content in this issue, I’m also excited to announce that joining the stable of contributing writers at Contract Pharma is Chad Moore, an investment banker at Robert W. Baird & Co. Chad heads up the firm’s pharma services M&A and equity capital market advisory practice and will be writing a monthly column—Deal Discussions—in which he will summarize recent M&A and equity capital markets activity in the sector.

Also, previous contributor Eric Langer, president of the biotech and life sciences marketing research and publishing firm, BioPlan Associates, will now be writing a regular monthly column called The BioPharm Insider. Eric and his colleagues will keep us abreast of the latest trends in the outsourcing of biopharmaceutical manufacturing.

I’m also kicking around the idea of launching a Reader Response section in the magazine. But, that of course depends on your input. So, if during the course of your reading, you have any ideas, thoughts or reactions, jot them down and send them in. If I get enough responses I’ll include them in upcoming editions. Hope to hear from you.

Tim Wright, Editor
twright@rodmanmedia.com