A Look into the Future of Pharmaceutical Outsourcing: Perspectives from Jim Miller, president of PharmSource

What will the CRO/CMO of tomorrow be like? Jim Miller, president of PharmSource, shared his views in a podcast with Pharmaceutical Technology, which can be found at PharmTech.com/Podcast. A portion of that interview is below.

PharmTech:Looking ahead 10 years from now, how will the contract service provider of tomorrow differ from the provider of today and what factors will influence the outsourced relationship?

Jim Miller, President of PharmSource

Miller: The big changes that are impacting the pharma industry generally will really be the big drivers of what happens to the CRO and CMO industry. If you think about the big changes that are occurring in pharma today, I think the ones that are most critical from a CRO/CMO perspective are first, a movement toward a world of smaller, niche products, often linked to diagnostic tests, rather than the blockbuster or even mid-sized products that had characterized the industry for much of the past 10 to 15 years.

Secondly, as the industry has become more global, its markets are more dispersed, and now you are not just dealing with the regulatory requirements of a handful of very large countries, but increasingly, the regulatory requirements and issues in places like China, India, Brazil, and South Africa, which have to be factored into your manufacturing and regulatory strategy planning.

Thirdly, the technologies and practices that companies are developing, particularly in the very earliest stages of the development process, will result in fewer candidates being progressed through the pipeline, but those candidates will have a greater probability of success. As that happens, you are going to see fewer opportunities for CROs and CMOs, but those opportunities will become all the more critical to the clients–the pharma companies–because they [the drug candidates] will be vetted and companies will have a lot more riding on them.

And finally, there is much uncertainty as to who is going to pay for new drugs and that's going to affect what new drugs move forward and how much revenue companies can get from new drugs, and perhaps more importantly, how companies demonstrate the efficacy and cost-effectiveness of these drugs as they move through the pipelines.

So all these developments will create new demands on CMOs and CROs, and they are going to have to adapt their business models and capabilities. First among those, they are going to have be more results- and value-oriented, so they are going to have to demonstrate that they can do things faster and more cost-effectively and that they are bringing services and insight to the table that address those broader issues that their clients are facing. Also, I think technology is going to be key. I think that information technology, both from the data management and analysis on the clinical side and from supply-chain and logistics management on the CMC side, is extremely critical, and you are starting to see the largest CROs and CMOs make significant investments in those information-based technologies.

Also because the markets and supply chains are going to be so dispersed, you are going to see companies move to a broader network of smaller facilities with equipment that is designed for smaller, more frequent batches of products rather than having one big manufacturing site that exports throughout the world. You may see smaller facilities in many different countries, each making smaller batches of products appropriate for local markets and able to handle multiple products in one facility. And you are going to increasingly see the equipment manufacturers develop manufacturing technologies that are much smaller scale, for instance, microreactors for the small-molecule API world or 'bioreactors in a bag' using disposable contact parts for large-molecule development. What that means is that you are going to see CROs and CMOs that are very global, but that are very savvy with technology and that have deep pockets, so that they will be able to make the necessary investments in these technologies and operate on a global scale.

Listen to the full interview at PharmTech.com/Podcast.