ImageThe market for contract manufacturing of prescription drugs exceeded $30 billion last year, a 10% increase that is being fuelled by specialist production of biologics and sterile products, according to market research company Kalorama.

Many pharmaceutical companies have little or no in-house capacity in sterile manufacturing, biopharmaceutical manufacturing and other specialised processes, such as chiral chemistry and improvements in catalyst activity.

This means contract manufacturing organisations (CMOs) are benefitting as a result, according to a new report from Kalorama.

Bruce Carlson, Kalorama's publisher, told, "While it's too early in the cycle of this economic downturn to call anything a 'recession-proof market' the outsourcing of drug manufacturing is an area that could see growth in a downturn."

Kalorama estimates that 2008 saw $30.5bn in contract manufacturing of pharma products, with around $2.7bn in the biopharmaceutical sector. That includes both outright manufacturing of product and secondary manufacturing, creating a finished product out of the APIs provided in bulk. The secondary area is driving growth, according to Carlson.

"Growth was slightly higher 2008 than 2007- 9% versus 8%, and this is where we expect it to continue," he said, adding that "despite the talk about offshoring, 55% of the business is [in the USA] and 5% in Canada."

The growing number of biotechnology-driven protein and peptide drugs, antibiotics, chemotherapeutic agents and other compounds administered as sterile injectables, with its concomitant technological requirements, has brought about an increase in the demand for contract sterile manufacturing services.

The sheer numbers of biologics in the pipeline are driving drug makers to outsource specialised production rather than build new plants, according to Kalorama.

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