Contract manufacturing might just have been one of the most important industries that you have never heard of. Contract manufacturing organizations (CMOs) serve the pharmaceutical industry and provide clients from all over the world with services that range from drug development right through to their manufacture. The reliance of CMOs in pharmaceutical manufacturing has increased greatly in recent years as the market has become more competitive and the demand for outsourcing services has grown.
Primary and Secondary Manufacturing
The services offered by contract manufacturing organizations can be broken down into two main categories: primary manufacturing and secondary manufacturing.
Primary manufacturing is the synthesis of the bulk ingredients that are used for drugs, while the secondary manufacturing process involves formulating the bulk substances into drugs for consumption (topical, pills, and inject cables)
As these organizations are set up to provide manufacturing in large numbers, work can be carried out cheaply, which why they are looked upon so favorably by pharmaceutical manufacturer.
Advantages and Disadvantages
Contract pharmaceutical manufacturers like CMOs come with both advantages and disadvantages. The biggest advantages are efficiency and cost.
If a company is unable to produce drugs or packaging in-house, the natural thing to do is to look at outsourcing the duties. This also applies to the cost of setting-up and maintaining the facilities for mass production. CMOs are set up to manufacturer on a large scale and contracting companies are able to get the products they need, at the rate they require much cheaper that they could produce the work themselves.
Contract pharma manufacturing also allows pharmaceutical companies to focus resources on a more specific area of the business. More time can be spent on the research and development of new medicines, as well as other areas such as marketing.
The main disadvantage of using contract manufacturing organizations is the fact that control of products is handed over to a third party; giving the pharmaceutical companies no oversight into how drugs are produced. The pharmaceutical industry is the most highly regulated in the world and any mistake made by a CMO can result in the Food and Drug administration (FDA) withdrawing drugs from the market, resulting in potentially millions of dollars in lost profits for the pharmaceutical company.
Another drawback is the sharing of sensitive data with the CMOs. While most CMO take strict measures to ensure that patent owners are protected, the fact that they work for so many different clients makes them a major target for hackers. To help in this issue, both companies are required to sign a confidentiality agreement (CDA).
CDA
The confidentiality agreement is a document that has to be signed by both companies before any confidential information is shared. This will ensure that the pharmaceutical company is protected when disclosing information and work carried out by the CMO remains confidential. Once the CDA is signed, the contract pharma company can access data regarding timelines and delivery dates, but no sensitive information can be disclosed without written authorization from the other party.