Contract packaging - a strategic move

By Kirsty Barnes

- Last updated on GMT

Related tags Outsourcing

The contract packaging biz is moving from an ad-hoc to a more
strategically determined, long-term approach, as pharma companies
begin to relax in the arms of service providers.

In the past, much of the contract packaging outsourced by pharma companies was done so for tactical, rather than strategic reasons, as companies preferred to have the flexibility of using a contract manufacturer (CMO) to ramp up manufacturing capacity when required, while still keeping the bulk of the manufacturing in their control.

The downsides of this short-term approach include less predictable production forecasts and little opportunity for process optimisation, and ultimately higher prices.

More and more pharma firms are now catching on to the idea that taking the step to permanently outsource pharma packaging allows the CMO more time to optimise manufacturing efficiencies, leading to cost savings and more manufacturing stability, Steve Facer, regional sales director, told

"It also allows companies to use their in-house resources better and focus on more high-end activities, rather than wasting time pressing and packaging tablets,"​ he said.

Firms who have been traditionally apprehensive about placing full manufacturing control in the hands of a CMO are now using ad-hoc outsourcing less as a short-term solution and more as a way of testing a contractor before strategically outsourcing a product at a later date.

"Although contract packaging is never going to be completely strategically-focused, we have seen a steady growth in favour of strategic outsourcing over the past five years as more and more of the business we receive that starts as ad-hoc turns into strategic,"​ said Facer.

"Cardinal's contract packaging business is now already split roughly 60:40 (strategic vs. ad hoc) and we expect this trend to continue as more drug companies realise the benefits of this approach,"​ he said.

And with the contract packaging market tipped to grow to $6.8bn (€5.4bn) by 2013, the future is bright for CMOs who can partner with pharma companies to balance regulatory pressures and flexibility with costs.

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