Why HPAPI Outsourcing Is Surging

Highly Potent Active Pharmaceutical Ingredients (HPAPIs) are becoming increasingly important in the pharmaceutical industry, particularly for developing more targeted treatments for chronic diseases like cancer. According to a recent report by Grand View Research, the global high-potency API contract manufacturing market was valued at $8.05 billion in 2024 and is projected to grow at a compound annual growth rate (CAGR) of 10.98% from 2025 to 2030.¹ This growth is largely driven by a projected 77% increase in new cancer cases globally between 2022 and 2050, from 20 million to 35 million annually (per the American Cancer Society), and the fact that about 75% of new cancer drugs in development are high-potency.²

Furthermore, while HPAPIs have traditionally been associated with cancer treatments, their use is expanding to a broader range of therapeutic areas, including inflammatory and antimicrobial indications, highlighting the need for specialized contract manufacturing organizations (CMOs) that have the expertise and infrastructure to handle these complex compounds safely. 

Also, as the market expands, regulatory agencies are implementing stricter guidelines on occupational exposure limits (OELs) and containment technologies to protect workers and ensure product quality. These new regulations are consolidating the market, as they make it difficult for smaller, less-equipped manufacturers to compete. As a result, sponsor companies are seeking partners who have invested in advanced containment facilities and stay ahead of these regulatory changes.  

These shifts have created a market where expertise and advanced technology are essential for success. The following assessments explore current HPAPI outsourcing trends from a CDMO perspective, including evolving demand, stricter regulatory compliance, analytical challenges, and the integration of automation.

State of the Market

The consensus among industry experts is that the HPAPI contract manufacturing market is experiencing significant growth, driven by increasing demand for specialized containment and compliance capabilities, as well as an expanding pipeline of targeted therapies. 

Frank Sorce, Chief Commercial Officer, UPM Pharmaceuticals, characterizes the HPAPI contract manufacturing market as mature but undergoing expansion. “Demand has intensified due to the growth of targeted small molecules, antibody-drug conjugates (ADCs), and highly selective kinase inhibitors, which require HPAPI-grade handling,” Sorce says. “I see significant investment focused on high-containment capabilities to meet the increasing complexity and volume of potent compounds, particularly in oncology.”

“Since 2020, demand for HPAPI manufacturing services has grown significantly, driven by the rise of advanced modalities such as ADCs and protein degraders,” observes Steve Barr, Head of Small Molecule and VP of Global Alliances, SK pharmteco. “These therapies require handling extremely potent compounds at different scales.”

According to Barr, “Large pharmaceutical companies are heavily investing in ADC development, while smaller firms, often lacking internal HPAPI capabilities, are increasingly outsourcing manufacturing. Regulatory pressures to move away from general-purpose facilities have also accelerated the shift toward dedicated containment environments. Some CDMOs report annual double-digit growth in HPAPI-related projects.”

“Over the past five years, HPAPI demand has more than doubled across CDMO pipelines,” adds Eric Neuffer, Business Segment Head, New Business Development, Drug Substance at Evonik. “The COVID-19 pandemic exposed vulnerabilities in global supply chains, and the subsequent rebound in oncology and targeted therapies has significantly accelerated outsourcing.”

Neuffer observes a clear trend amongst large pharmaceutical companies “to diversify their supply chains to minimize geopolitical, raw material and tariff-related risks.”

Dr. Peter Surman, Chief Scientific Officer, Douglas CDMO, says the HPAPI market is currently under significant pressure and undergoing a period of intense evolution. “This is primarily driven by the need for pharmaceutical and biotech companies, and especially their contract manufacturing partners, to meet ever-increasing regulatory requirements,” Surman posits.

He claims, “More active molecules, particularly in the oncology and targeted therapy space, are being classified as highly potent. This trend places significant and complex demands on manufacturers who must therefore invest heavily in sophisticated containment strategies and specialized equipment to ensure the protection of their operators and to prevent cross-contamination.”

Evolving Demand

While oncology continues to dominate the HPAPI space, several industry experts are witnessing growth in other therapeutic areas. “While oncology remains a dominant and high-growth focus for HPAPI applications, a number of other therapeutic areas are emerging as significant opportunities,” notes Douglas CDMO’s Peter Surman. “These include autoimmune diseases, neurological disorders, and even niche therapies for rare diseases.”

“Beyond oncology, we’re seeing increased HPAPI use in autoimmune diseases (e.g., JAK inhibitors), CNS disorders (e.g., neuroactive compounds with high receptor affinity), and infectious diseases, particularly where novel mechanisms of action demand low-dose regimens,” reports UPM’s Frank Sorce. “Hormonal therapies and select metabolic and rare disease treatments are also emerging as HPAPI-relevant due to their pharmacological potency.”

Evonik’s Eric Neuffer concurs: “In the areas of immunology and autoimmune disorders, kinase and Janus kinase (JAK) inhibitors are being developed at sub-milligram doses. In neurology, central nervous system (CNS)-penetrant modulators for conditions like Alzheimer’s and Parkinson’s are gaining traction. Rare and orphan diseases are another key area where ultra-potent enzyme inhibitors are being tailored for small patient populations. We’re also seeing innovation in metabolic and endocrine disorders, particularly with peptide-small molecule hybrids targeting diabetes and obesity. Finally, the need for high-potency antivirals for pandemic preparedness is also driving new development in infectious disease.”

Neuffer says, “Companies are supporting these emerging areas by offering customized containment solutions and deep expertise in handling complex, highly potent molecules.”

Regulatory Pressures

In addition to new emerging therapeutic areas, increased regulatory scrutiny is also driving transformative change in the HPAPI market. “Recent regulatory focus on workers’ safety and risk-based approaches to cross-contamination has been driving the increasing need for isolation controls and validated operations, particularly for multi-product facilities,” says Robert Cornog, Senior Director of Product Development, Quotient Sciences. “Those considerations are being pushed earlier and earlier into the conceptual and design phases for equipment and facilities.”

SK pharmteco’s Steve Barr characterizes new regulations such as PIC/S Annex 1 (effective August 2024) and the EMA’s Variations Regulation (coming January 2025) as “pushing the industry toward deeper validation, more stringent cleaning, and more rigorous containment documentation.” He says, “CDMOs are responding by investing in dedicated HPAPI manufacturing suites and closed-system isolators, expanding laboratory capacity and quality-by-design implementation, and adopting strict hygiene protocols and more automated, single-use systems.”

“There’s also a shift toward more harmonized expectations on occupational safety and cross-contamination control,” adds UPM’s Frank Sorce. “CDMOs are adapting by implementing advanced barrier technologies (e.g., split butterfly valves, isolators), investing in facility-wide containment validation programs, and adopting more granular PDE-based cleaning limits.”

Analytical Challenges

HPAPI development presents several unique analytical challenges. Brad Rowe, Senior Director of Integrated Development, Quotient Sciences, explains: “The manufacturing of HPAPI drug products requires the demonstration of very low acceptable levels of residual compound on the manufacturing equipment, which can pose challenges in cleaning verification analysis and their quantitation limits. Likewise, HPAPI drug products tend to be on the very low end of product strengths, again making assay, and in particular related substances analysis, challenging to achieve the appropriate levels of quantitation limits.”

UPM’s Frank Sorce adds, “Challenges include detection of trace-level impurities, robust cleaning verification below sub-ppm thresholds, method transfer between containment levels and maintaining analytical sensitivity despite matrix interference.”

Douglas CDMO’s Peter Surman voices a similar opinion: “The key analytical challenges in HPAPI development and manufacturing stem from the need to detect and quantify impurities and residues at extremely low concentrations.” 

How are CDMOs addressing these challenges? According to Quotient’s Rowe, “Methodology that targets the analysis of specific compounds, such as HPLC-Mass Spectrometry, can help overcome these challenges with improved quantitative abilities.”

Sorce also notes CDMOs responding with “investment in high-resolution mass spectrometry (e.g., LC-HRMS, ICP-MS), validated swab/rinse techniques, and redundant analytical suites to support development under containment conditions.”

Surman agrees that these challenges are best addressed “through the adoption of advanced analytical techniques, such as ultra-high-performance liquid chromatography (UHPLC) and mass spectrometry, to ensure consistent product quality and safety.”

Capacity Constraints

In tandem with the evolving demand, regulatory shifts, and unique challenges associated with HPAPIs, some industry insiders are witnessing growing pressure on HPAPI capacity. “There is growing pressure on HPAPI capacity, especially for assets requiring ultralow OELs or for projects in early-phase development with compressed timelines,” remarks UPM’s Frank Sorce. “While large CDMOs are expanding infrastructure, demand often exceeds supply in niche areas—such as ADC payload production, cytotoxics, and Phase I readiness. Capacity constraints are particularly acute for companies seeking speed, flexibility, and integrated analytical support.”

Evonik’s Eric Neuffer says, “When it comes to large-scale HPAPI CDMO capacity – ranging from 500 to 2,000 gallons – there is still availability globally. However, recent market dynamics are shifting demand, particularly in the U.S. With growing concerns around tariffs and geopolitical risks, many companies are moving quickly to secure regional capacity, which could lead to a rapid tightening of supply in that market.”

“There are clear capacity constraints, especially at clinical and commercial scales,” observes SK pharmteco’s Steve Barr. “Contributing factors include a limited number of qualified high-containment facilities, long timelines for facility qualification and regulatory approval, and a shortage of skilled personnel in occupational toxicology and high potency operations.”

“While some CDMOs are expanding, new facilities can take more than two years to come online,” Barr explains. “Also, expertise and workforce availability are often greater bottlenecks than infrastructure itself.”

Jean-Francois Carniaux, Vice President and Global API Technical Lead at Piramal Pharma Solutions, also emphasizes the importance of the workforce. He says, “Rather than solely focusing on capacity, competency and experience in handling manufacturing constraints and containment should also be prioritized. Rushing to expand facilities without developing the necessary competency pool can lead to further constraints that customers should not have to endure.”

Looking to the Future

Where is the HPAPI contract manufacturing market headed by 2030? “By 2030, we’ll start to see broader adoption of digital twins to streamline scale-up and enhance process predictability,” predicts Evonik’s Eric Neuffer. “Green chemistry will play a larger role, with solvent recycling and continuous flow networks supported by closed-loop quality control. AI-driven analytics are set to significantly shorten method development timelines. HPAPIs will likely be central to next-generation ADCs, biospecifics, and precision-dosed peptides across oncology, CNS disorders, and metabolic or rare diseases. Sustainability and data integrity will remain key priorities, with end-to-end digital ecosystems enabling real-time compliance and predictive maintenance.”

Peter Surman of Douglas CDMO says, “We will see a greater push towards fully integrated and automated manufacturing processes. These will not only enhance safety and efficiency but also improve data integrity and regulatory compliance.”

SK pharmteco’s Steve Barr agrees, “widespread use of automation and robotics in HPAPI containment suites, as well as expansion into new therapeutic areas including gene-modified payloads, radiopharmaceuticals, ophthalmics, and metabolic/rare diseases.”

UPM’s Frank Sorce anticipates “significant adoption of closed-loop systems, continuous containment verification, and predictive analytics for process and safety monitoring.” He says, “Therapeutically, oncology will still lead, but the HPAPI footprint will expand into CNS, immunology, and niche areas like oligonucleotide conjugates and peptide-drug conjugates. CDMOs with flexible, tech-forward platforms and cross-disciplinary containment expertise will have a strategic advantage.”

“Enhanced collaboration between pharmaceutical companies and CDMOs will be critical,” says Douglas CDMO’s Peter Surman. “Especially with a strong focus on innovation, adaptability, and compliance to remain competitive in this landscape.”

References:

1. https://www.grandviewresearch.com/industry-analysis/high-potency-api-contract-manufacturing-market-report

2. https://www.cancer.org/content/dam/cancer-org/research/cancer-facts-and-statistics/global-cancer-facts-and-figures/global-cancer-facts-and-figures-2024.pdf