Results from CPHI Milan Survey Find No Favor Among Industry for BIOSECURE Act While Predicting Faster Growth for CDMOs in 2025

On Sept. 27, 2024, CPHI Milan announced survey results showing that growth in the contract services sector is expected to accelerate in 2025. The predictions come from new research findings from 280 pharmaceutical companies that are to be released at CPHI Milan as part of the CPHI Annual Report and Survey. In addition to suggesting accelerated growth for contract development and manufacturing organizations (CDMOs) next year, the research findings suggest that the industry does not feel favorable toward the recently passed BIOSECURE bill (1).

CPHI Milan noted in a press release that most analysts assessed the first half of 2024 as having slower-than-expected recovery. The press release quoted Gil Roth, president of the Pharma & Biopharma Outsourcing Association (PBOA), as having said, “While reports indicate that dollars are flowing back to late-stage assets [at CDMOs], there is little evidence that early stage pipeline products are receiving funding [yet]. This means that the lifeblood of CDMOs—projects moving through the development pipeline and smaller customers sticking with key service providers—remains hobbled.”

In the upcoming 2024 CPHI annual report, the organization takes note that the wider pharma industry is more optimistic with a forward-looking outlook for contract services companies’ growth in the next 18 months. The report shows that 49% of industry respondents are “highly positive” and 44% are “neutral”, while only 7% are predicting “negative” prospects.

Discussion in the contract services sector also revolves around the shortage of available contract capacity for glucagon-like peptide 1 (GLP-1) drugs. The impact of the BIOSECURE Act and how it may affect contract service industry prospects is also a major concern. According to the report, a consensus among survey respondents suggest that the Act has further accelerated the post-COVID trend for greater supply chain diversity; both US-based and particularly India-based CDMOs are reporting greater interest in establishing strategic partnerships.

A significant finding in the report is that a majority of the industry does not support the BIOSECURE Act’s stated goals. Nineteen percent view China based-CDMOs as “a threat and should be removed from Western supply chains”, whereas 38% of respondents argue that BIOSECURE is a “politically motivated issue that sets a concerning precedent for the industry.” The remaining 43% of industry respondents, in other words, the largest grouping, have a balanced view, where they both support “WuXi’s tremendous contribution to the industry,” but at the same time want to err on the side of caution, believing it is sensible for the industry to “diversify supply partners.”

“The contract services zone at CPHI continues to grow year on year, in large part driven by the industry’s need for trusted partners who can provide capacity, help navigate the nuances of complex therapeutics and support the road to commercialization. CPHI Milan serves as a vital platform for connecting existing and prospective partners, and we look forward to continuing to serve this growing industry segment in 2025, and beyond. We also see a desire among our attendees [i.e., the people awarding contracts] to meet current partners and advance projects, but also to significantly widen their networks as we head into 2025,” said Tara Dougal, Brand & Content director at CPHI Milan, in the press release.

The research findings show that global innovator and generic-drug pharma companies are actively looking for wider supply chain customers and key development partners. With more than 600 contract services providers expected to attend CPHI Milan on Oct. 8–10, partnering discussions are expected to increase as biotech funding motivates greater deal volumes for 2025 and beyond.

CPHI Milan will host 150 speakers and hold more than 100 sessions across multiple facets of pharmaceutical discovery, development, manufacturing, and production. Approximately 62,000 professionals in the pharmaceutical industry are expected to attend.

Reference

1. US House of Representatives. 118th Congress, 2D Session H. R. 8333. May 10, 2024.

Source: CPHI Milan