Pharmaceutical News: 2011 Global Contract Manufacturing Market Analysis

Research and Markets: 2011 Global Contract Manufacturing Market Analysis

The global pharmaceutical contract manufacturing industry has registered strong growth during the past few years. The outsourcing of drugs manufacturing provides many advantages to the pharmaceutical companies, such as improved production capacity, quicker time to market drugs, and low scale up cost. With the help of contract manufacturing, pharmaceutical companies will be able to meet growing demand for new drugs and improve their core competencies. All these factors supported the contract manufacturing market to generate revenue worth around US$ 22.5 Billion at the end of 2009.

According to this new research report, demand for contract manufacturing services has been continuously soaring due to the rising cost pressure on pharmaceutical companies. Besides, the recent global economic slowdown was a major factor for the adoption of the contract manufacturing model. The leading pharma companies in the market are also looking at this model as a means to expand into the biosimilars and generics segments. With the changing economic scenario and the pressure of reducing drugs manufacturing cost, the global contract manufacturing market is expected to grow at a CAGR of around 11% during 2011-2013.

The publisher has also found that countries, such as India, China, Singapore, Russia, and Brazil are considered as the developed markets for contract manufacturers. The economic conditions of these countries are providing immense opportunities to the pharmaceutical manufacturers to expand their businesses. Countries, like Vietnam, South Korea, and Bangladesh are rapidly emerging among other contract manufacturing destinations. Majority of the drugs exported from these countries are destined to the American and European markets. In this regard, this research report provides complete information regarding the export of drugs from these countries.

The report provides an extensive research and prudent analysis of the global contract manufacturing industry. It gives an insight into the current and future market trends. The report has also studied the key contract manufacturers in all the countries to help clients understand the overall market dynamics. The report will work as an investment guide for the clients looking to invest or outsource their manufacturing in these markets.

Big Pharma compensation plans ‘flawed’ – study

Drug majors’ continued dependence on traditional executive compensation plans threatens to work in opposition to the culture of innovation which is needed to restore the sector’s health, a new study warns.

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While sustained transformation and performance in the pharmaceutical sector will require a level of risk-taking and change to the way that companies define, measure and reward performance, new research shows that executive compensation programmes at Big Pharma companies are still oriented towards rewarding compliance and near-term financial outcomes. Yet these are often the wrong approach in an industry with very long, multi-year product development pipelines, says management consultants Hay Group.

80% of metrics used by large drugmakers to determine incentives are financial, while only 12% are related to drug development and commercialisation, according to Hay Group’s new research, which is based on data from 50 publicly-traded US pharmaceutical companies, both big and small.

For at least a decade, pharmaceutical industry sales and R&D functions have operated on the premise that activity yields results, but that formula does not work anymore, says Ian Wilcox, vice president and global sector leader for life sciences at Hay Group. “The industry now has to turn itself inside out and focus on investments that produce results for customers,” he advises.

In a scorecard on the state of affairs within the industry, Big Pharma “would probably be at the bottom of the class,” says the firm, while in contrast, biotechnology and biopharmaceutical companies are innovators not only in the technology and products coming out of their laboratories, but also in how they measure and reward their executives.

As well suggesting that companies ask themselves whether short-term incentives should continue to play such an important role for senior executives in an industry with “incredibly long” product development cycles, Hay Group also finds problems with the industry’s long-term incentives. Ideally, these should link executives’ interests with the health of the company, but the research finds that, currently, 80% are based on financial data points, and only 20% are related to pipeline development and the commercialisation of innovative new therapies.

Another way to think of this is that financials are a lagging indicator, it suggests; while the last decade has been tough, the next will contain even more pitfalls, with Big Pharma collectively standing to lose revenues totalling as much as $150 billion annually over the next few years as valuable blockbusters fall over the patent cliff. And the situation could get much worse before it gets better, it warns.

Companies’ compensation committees cannot themselves re-fill the firm’s pipeline with novel products, but they can implement programmes and practices to encourage executives to place innovation much higher on their list of priorities, the firm suggests. “That’s the game in early biotech and emerging biopharmas – not just pay for financial ‘performance’ but pay for new and innovative technologies which are the lifeblood of these new companies,” it adds.

Specifically, while Big Pharma has continued to lean heavily on financial performance measures to drive compensation plans, the mid-size pharmas and small biotech firms that “live and die” based on whether their drugs are approved have been much more creative in weaving pipeline and R&D measurements into their incentives strategies, says Hay Group, and it advises Big Pharma, rather than seeking to “re-invent the wheel,” to look to biotech, or even other industries that have demonstrated track records in product development and innovation, for the way forward.

Pharmaceutical industry working to curb drug abuse

Recent articles in this newspaper have explored a serious and widespread problem in Kentucky: prescription drug abuse and misuse.

As chief medical officer for the pharmaceuticals business within Covidien, a health-care products company and the largest supplier of opioid pain medications in the United States, I understand raising awareness about prescription drug abuse is a critically important public service.

Kentucky consistently ranks among the top five states in prevalence of prescription drug abuse and misuse. This is especially true for pain medication misuse, which in recent years has been highest among young people ages 18 to 25.

Kentucky is also struggling with budget cuts, an issue plaguing every state as a result of the economic downturn. From New York to California, states are facing what The Washington Post recently called “the most severe budget crisis since the great depression.” As budgets diminish, funds to support lifesaving abuse prevention and treatment programs are quickly disappearing.

The budget crunch in Florida, for example, contributed to the elimination of the Office of Drug Control, the agency focused on drug abuse and coordination of the numerous state entities affected by this issue. Similar cuts have occurred in states like Ohio and cities like Seattle, Washington.

As state-level resources diminish, drug manufacturers, prescribers, pharmacists, patients and caregivers play an even greater role in improving patient safety. One way we do this is by working with the U.S. Food and Drug Administration as it develops a set of strategies recommending all drug manufacturers provide education on the safe use of long-acting (or extended-release) opioid pain medications.

Last summer, the FDA held its first-ever advisory committee hearing to discuss these proposed strategies. The result of this hearing will be an industry-wide Risk Evaluation and Mitigation Strategy (REMS) requirement for drugs in this class.

Covidien commends the FDA for taking this important first step toward addressing abuse and misuse, but we know our commitment must go above and beyond the REMS requirements. We are doing this by adding voluntary tools and resources for our products that follow an evidence-based evaluation of their individual risks and benefits.

In addition, Covidien is focused on taking collaborative steps to stem the growing epidemic and provide useful information to prescribers, patients, caregivers and community leaders to help them take action against the problem. In September 2010, we launched the C.A.R.E.S. (Collaborating and Acting Responsibly to Ensure Safety) AllianceSM — a coalition that seeks to reduce opioid pain medication misuse and abuse and increase responsible prescribing and safe use of all these medications, regardless of manufacturer, by collaboratively developing and sharing tools and resources for health=care professionals, patients and community and health care organizations.

The C.A.R.E.S. Alliance was born out of the realization that while government-mandated approaches to tackling prescription drug abuse were on target — they were only a start. We saw the need for a voluntary effort that truly engages every sector.

As the C.A.R.E.S. Alliance grows, we plan to add more information and resources for groups in all aspects of health care.

The C.A.R.E.S. Alliance recognizes that a problem this big can be solved only if we all work together. Prescribers, pharmacists, regulatory bodies, caregivers and patients all have a responsibility to patient safety — and we look forward to collaborating with all these groups, at the national, state and local levels, to end this growing public health concern.

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