|Survey Methodology: This eighth in the series of annual evaluations by BioPlan Associates, Inc. yields a composite view and trend analysis from 352 responsible individuals at biopharmaceutical manufacturers and contract manufacturing organizations (CMOs) from 31 countries. The methodology also encompassed an additional 186 direct suppliers (vendors) of materials, services and equipment to this industry. This year's survey covers such issues as: current capacity, future capacity constraints, expansions, use of disposables, trends and budgets in disposables, trends in downstream purification, quality management and control, hiring issues, employment and training. The quantitative trend analysis provides details and comparisons by both biotherapeutic developers and CMOs. It also evaluates trends over time, and assesses differences in the world's major markets in the U.S. and Europe.|
Biopharmaceutical manufacturers are now defying many of the overall trends seen in the pharmaceutical and other mature industries. Namely, they are already showing strong signs of recovery from recent worldwide economic problems. As it matures, the industry continues its shift toward improved productivity and quality, all the while controlling costs.
These trends are documented in our 8th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production . This year we find that company budgets are clearly recovering from recent economic belt tightening. However, manufacturers are maintaining their conservative approach to production, and keeping their focus on cost reduction and quality improvements. In this year’s study (see Figure 1), the shift in the focus to production quality was particularly apparent. Here, we saw an 11 percentage point increase, to 57.1%, of global respondents indicating they are seeing operational changes toward production quality.
This trend is affecting company budgets linked to these factors. The largest budget increases this year were in areas associated with productivity and quality. This was a change from previous years when most budgets had simply been slashed. Responses indicate that companies are expanding budgets, but are doing so cautiously, with expenditures being critically evaluated. Overall, spending in virtually all budget areas is up in 2011, between 1% and 6%.
This year, “New technologies to improve efficiencies/costs for downstream production” leads the pack with a 6.4% average spending increase. This budget increase comes on top of last year’s budget-leading 4+% increase. This is a result of funding for activities that reduce capacity constraints due to bottlenecks from downstream operations. Funding of new technology in upstream processing is nearly as substantial as downstream funding. Integrating “New technologies to improve efficiencies/costs for upstream” saw budget increases of 6.2% (Figure 2). Upstream manufacturing’s greatly increased yields in recent years keep it competitive from both productivity and performance standpoints.
In this year’s study, responses from 352 global biomanufacturers/CMOs in 31 countries, and 186 vendors to the industry, show that the top spending projections are going toward internal investments into new technology (upstream and downstream) and personnel and process development and optimization.
Companies are focusing on productivity by “retooling” and training existing staff resources. In fact, “Operations staff training to improve efficiency” ranked 4th this year, which suggests that funding for on-going process improvements is likely to continue. Similarly, the survey shows respondents attributing “Better process development” and “Overall better control of process” as the number 1 and number 3 factors, respectively, in creating “ ‘Significant’ or ‘Some’ Improvement in Biomanufacturing Performance.”
Across all departments, budget trends are a leading indicator of how constraints have loosened, especially for expenditures that improve process performance. The annual survey documents how this industry, despite recent worldwide economic difficulties, has maintained steady growth, and continues to mature.
Outsourcing is Up
Survey data indicate that biopharmaceutical companies are increasing their outsourcing, but are doing so in areas that may reduce costs, or improve productivity. Recent increases in company budgets are often not being directed toward rebuilding in-house staff that had been reduced, or eliminated in recent years. Outsourcing of certain key tasks, such as manufacturing, is growing at a steady pace. Overall, the prospects for outsourcing by biopharmaceutical companies, including contract testing and manufacturing companies, appears promising with healthy growth expected, particularly for the more sophisticated and broadly-capable contractors.
This year’s survey included evaluation of 23 key areas of biopharmaceutical outsourcing. As shown in Figure 3, when asked where costs had been successfully reduced last year through outsourcing (in addition to any prior years’ cutbacks and outsourcing), the highest percentage, 13.2%, reported outsourcing of jobs in process development, and 9% outsourcing R&D, and 11.8% manufacturing, including 5.7% off-shoring manufacturing to foreign contract manufacturers (CMOs).