The market for biopharmaceuticals continues to expand worldwide, and they have been the primary growth driver for the pharmaceutical industry. Biopharmaceuticals will continue to provide significant growth for the pharmaceutical market over the next five years. Biopharmaceutical parenteral manufacturing has expanded in recent years as more therapeutic biologics have been approved for the market. Pharmaceutical and biotechnology companies continue to outsource to contract manufacturing organizations (CMOs) as a way to meet their fill-and-finish needs and reduce risk. This article examines the importance of fill-and-finish to drug product portfolios and its effect on users’ outsourcing strategy, fill-and-finish outsourcing focus areas and investments planned by CMOs over the next five years.

The information presented in this article draws from HighTech Business Decisions’ latest report, “Biopharmaceutical Contract Fill-and-Finish: Best Practices Study 2018.” This report uses primary research from senior-level executives and scientists at pharmaceutical and biotechnology companies and executives at contract manufacturing organizations. For purposes of our article, HighTech Business Decisions defines biopharmaceuticals as complex molecules created through the genetic manipulation of living cells or organisms used for therapeutics or vaccines. In addition, CMOs are defined as those contract manufacturing organizations that provide drug product manufacturing services on a fee-for-service basis for biopharmaceuticals, including formulation, fill, packaging and labeling, lyophilization, and other services related to the final production of biopharmaceutical drug product.

Fill-and-finish’s importance
Companies outsource their fill-and-finish manufacturing needs for various reasons. Those small virtual biotech companies outsource their production because they do not have in-house capacity. Outsourcing helps obviate the need for capital expenditures and reduces business risk. For those companies with in-house production, the drivers to outsource include access to capacity or capability and maintaining supply continuity for risk management. Furthermore, the outsourcing strategy for these companies is more complex and varies depending on product phase, product life cycle, volumes, and profitability. One influencing factor in an outsourcing decision is a company’s view on fill-and-finish’s importance to their drug product portfolio. In other words, is fill-and-finish a core technology that companies prefer to keep in-house or is it a non-core technology suitable for outsourcing. Core technology for the purpose of our study is defined as a) high IP and know-how criticality, b) high development intensity, and c) high product business relevance.

Our study finds that fill-and-finish is considered a non-core technology for 70% of the biopharmaceutical companies, while 30% consider it a core technology that they prefer to keep in-house. Companies that have in-house production capability are more likely to consider fill-and-finish a core technology than those companies without in-house manufacturing (see Figure A).

For biopharmaceutical companies that do not consider fill-and-finish to be a core technology and therefore not important to their outsourcing decision often times do not have a special technology requirement for their products. In addition, many of these respondents have no in-house manufacturing capacity and have to outsource everything.

However, for companies  that view fill-and-finish to be a core technology and prefer to keep it in-house advocate the importance of keeping control of final product. Some also argue fill-and-finish being a core technology for the launch of product. As products and delivery devices increase in complexity and uniqueness, a few respondents see an advantage to keeping fill-and-finish in-house because of manufacturing know-how. In addition, some see improvements to cost and speed with in-house capability and prefer to keep fill-and-finish in-house.

Below are selected comments from our study’s pharma/biopharma respondents regarding their view on whether fill-and-finish is a core technology and its impact on outsourcing decisions:

“We will have no choice but to outsource fill-and-finish. In markets where we can, we prefer to do it ourselves. But there are markets, e.g., Russia, Mexico, China, and to some extent Japan, that prefer/require local manufacture—at least for fill-and-finish.”

“We have no choice since we have no fill-and-finish facility. But we don’t consider it a core technology. There are enough competent fill-and-finish companies out there so we will always outsource. They are expensive facilities to run so they need to be kept occupied.”

“It is outsourced now, and I have spoken to consultants about the cost of goods calculations for biologics manufacturing. Most mid-sized companies still outsource. I don’t see us building fill-and-finish capacity. It is not our core expertise.”

“It is a core technology for us, we will outsource for clinical material as we build up our internal capacity. Our philosophy is that drug product is closer to the patient and we like to keep control over the final product.”

“It is very important to our drug product portfolio. However, it is not always practical to keep it in-house. If we are manufacturing drug substance at a CMO and next door they are able to do the fill-and-finish, then we would outsource it. We can’t manage everything so we outsource a great deal of it.”

Fill-and-finish outsourcing focus areas
There are many factors that affect outsourcing strategy, and there are also many variables that influence a company’s outsourcing focus as companies have multiple efforts and goals regarding fill-and-finish of their products. In addition, the external environment can have a near-term impact on a company’s outsourcing emphasis and priorities.

Our study finds that a large majority of the biopharmaceutical respondents (70%) will focus on working with additional CMOs in the next five years (see Figure B). Higher utilization over the last couple of years and longer reservation slot indicate a capacity tightness. Companies are working with more CMOs to secure capacity. With more novel and complex products, companies are increasingly tapping CMOs to access new process capabilities they neither have nor want to develop in-house.


As a result of recent industry consolidations, there have been changes on key personnel, relationships, policy, or even new company objectives. These changes are causing biopharmaceutical companies to review their past sourcing decisions as stability is called into question. Some respondents from our study have noted their second- or multi-source manufacturing strategy for supply chain risk mitigation as reason for engaging a new CMO. In addition, different geographic regions and countries mandate use of local CMOs, especially if the final product is sold in that market. This is another driver for working with additional CMOs as companies expand globally and conduct local clinical trials.

In conjunction with qualifying new fill-and-finish sources, 22% of the biopharmaceutical respondents in the study noted the need to use a CMO with different process capabilities, such as ADC, specialized capabilities, slow-release formulations or different freeze drying technology.

Emphasis on new drug delivery systems, primarily prefilled syringes, is another focus area of fill-and-finish outsourcing as noted by about one-fifth of the respondents. This is perhaps due to the fact that majority of the format at drug product launch is in vials, but companies try to transition to prefilled syringes later for patient ease-of-use.
Below are selected comments from our study’s pharma/biopharma respondents regarding their focus areas for fill-and-finish outsourcing:

“Our strategy for outsourcing is finding a balance between preferring to do things in-house against a) accessing capability and capacity for clinical projects where we don’t want to build before knowing the drug will be successful, b) being close to markets, and c) business continuity, where we maintain relationships with CMOs who can help us with a sudden change in demand. Another surprising benefit of outsourcing is we get access to a lot of knowledge from our CMO because of their expertise and their interactions with other clients. We are looking for more CMOs.”

“We’ll focus on more CMOs as a strategy for most products. It’s good business and manufacturing sense regarding the global supply chain to break it up. We look at risk, shipping, etc., and have multiple fill-and-finish sites.”

“We will be sourcing for additional capacity. We have multiple projects going into the clinic over the next five years. Also, clinical trials for most cancer drugs eventually have to include Europe, and it will be helpful to have a European drug supply. So we’ll stick with a U.S. supply chain for early clinical and move to multiple and international sources for later stage.”

Fill-and-finish future investments by CMOs
There are increasingly more novel or specialized products in the drug development pipeline.  New technologies and more capacity are needed to support products such as ADCs, live viruses, cytotoxic and niche products. Over 75% of the strategic investments in the next five years mentioned by the CMOs will augment capabilities and increase service offerings. The investments encompass adding lyophilization, technologies for cytotoxic handling, and both large- and small-scale capacity. CMOs are also adding or expanding existing fill lines in prefilled syringes, auto-injector/needle-safety device and liquid vials. About 25% of the investments are in non-manufacturing areas such as implementing track-and-trace system, automation in QC, sterilization system, and increasing development capacity.

Fill-and-finish outsourcing strategy for pharmaceutical and biotechnology companies is driven by capacity and capability needs. The strategy varies by the company’s internal goals and risk profile, and is impacted by whether fill-and-finish is viewed as a core technology. As companies seek to form more partnerships with CMOs to access local markets and different process capabilities, CMOs are investing in new capacity, capabilities, and service offerings to address the industry needs. 

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Cindy Liu is managing director and William Downey is president of HighTech Business Decisions, a market research and consulting company that has been publishing reports on the biopharmaceutical contract manufacturing market since 1997. For more information, visit www.hightechdecisions.com or call (408) 978-1035.