What Outsourcing Challenges Are Faced By Pharmaceutical Manufacturers?


The pharmaceutical business is now dealing with some significant challenges. Executives in the business are losing sleep over a number of issues, including the end of the blockbuster era, rising research costs, uncertainty about regulatory and reimbursement, patent cliffs, generic erosion, and a slow global economy. Biopharmaceutical businesses have altered nearly every facet of their operations, including R&D, in response to these constraints.

Drug manufacturers are putting a lot of effort into increasing the value and productivity of each dollar spent on R&D in order to stay competitive. Pharmaceutical CEOs must balance the challenging task of expediting product development while controlling expenses. Drug manufacturers can use their resources while entering risk-sharing agreements with CROs to produce significant cost savings through strategic outsourcing with third-party contractors.

What are the Challenges?

What are the Challenges

Scarcity of Skilled Workers

The shortage of competent labor will continue to influence biopharma manufacturing over the upcoming year significantly and beyond. Automation by companies like Scorpion Biological Services may be able to help with some labor shortage issues, but the core problem will still exist. Further investment in the education sector will be needed to prepare employees for the STEM (science, technology, engineering, and mathematics) industries.

Mergers and Acquisitions

If traditional medicines don’t keep up with technology advancements, non-traditional and new competitors in the market will have a chance to take market share from them. But after a merger or acquisition, some pharmaceutical manufacturing companies that face daily legal, regulatory, or technological hurdles succeed. According to McKinsey, organizations that have lagged behind in digitalization may be able to catch up through mergers and acquisitions.

Production Flexibility

The patient population changes when target indications for drugs are narrowed down. End markets reduce the market size for a product for orphan pharmaceuticals and medications that target particular patient populations.

The size of manufacturing batch needs are consequently reduced, she said. These demands for smaller batch sizes have prompted several developers to (employ) mid-size and small-tier CMOs who have the equipment scale suitable to satisfy the demands of a smaller patient population.

Intricate Supply Chains

Automation of the supply chain has gone from being optional to absolutely necessary as the manufacturing supply chain has been moving away from the paper-and-technology information management paradigm to an all-digital approach for years.

However, compared to other businesses, the pharmaceutical industry’s supply chain is much more complicated and regulated. Strong collaboration ties are essential for the success of a supply chain because there are numerous providers in various places. However, the complicated supply chain for pharmaceuticals faces difficulties due to the requirement for end-to-end transparency; digital transformation seeks to unify everything in one location.

Other Challenges

Apart from the ones listed above, here are some of the more challenges faced by pharmaceutical manufacturing:

  • CMO’s delay in delivering the required quantity of the medicine
  • The possibility of the CMO failing to meet applicable regulations
  • Finding an outsourcing partner and effectively managing the ensuing relationship requires time and energy on the part of the customer
  • Intellectual property and other confidential client data may be compromised
  • Theft potential and ensuring quality are both at stake

Many pharmaceutical firms are now using outsourcing to develop new drugs more quickly and at lower costs in an effort to boost profits. Drug companies are being pushed to experiment with novel methods of drug distribution, and discovery as rising development costs make traditional methods unsustainable.


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