During the second quarter of 2015, the US manufacturing sector has been growing with medical devices and pharmaceutical preparation accounting for more than 28,000 new jobs. While assisted by a recovering economy as a whole, it is important to note that growth in the pharma manufacturing sector is outpacing the overall average growth.
This is a significant indicator from the pharma industry signaling not only increased demand, but also increased optimism in the longevity and consistency of demand. This optimism may be a result of the newly forming biosimilars market, changes in global regulatory affairs, lessened cost pressures, or any combination of the like.
At its most basic interpretation, if employment in the pharmaceutical manufacturing sector is increasing we can assume, then, so too is demand for pharmaceutical products (sales). Having increased sales is an excellent predictor of increasing profits in the short-run, and as a result we can expect new players (CMOs/CROs) to enter the market in an effort to capture their piece of the new demand. This increase in competition will help to keep prices competitive however, it will also make it more difficult to identify the best CMO or CRO for ones’ needs.
With more than 600 CMOs and CROs operating in the continental US as of January 2015, pharmaceutical sponsors have difficulty in finding the outsourcing partner to best meet their specific needs; thus this increase will likely only exacerbate the problem. To combat such, having a keen awareness of the market ‘heartbeat’ will take you and your company far. While there are some services currently operating to fulfill this information gap, a single unified methodology has yet to be accepted by the industry. Thus for many companies, traditional market research provide the highest probability of success when searching for new manufacturing partners.
Written by Bluebox Research – A Pharmaceutical Market Research Company