Page 1

SAVA RESEARCH

Contract manufacturing company and its role


Contract manufacturing company establishes a mutual agreement between two companies where one company produces materials or raw materials for the other company. The other company then uses that material for the manufacture of finished products. The former company that manufacturers raw materials also handles the shipping and dispatch of material to the client to ensure that things are carried out in a proper manner.


The working model of a contract manufacturing company will suit to any business type as it essentially involves outsourcing the production to the other company.


The growing demand of outsourcing Coming into the picture of contract manufacturing, global pharmaceutical industry is bringing new trends and thus the pharma world is also experiencing a drastic and dynamic change. With the view to cut cost of drugs all pharma companies are reducing their cost, manufacturing capabilities, R&D cost, internal capabilities and are rather focusing on outsourcing. These drug companies are now relying more and more on those who provide outsourcing services with the view to fulfill their needs and cut costs as well. This trend is also witnessed by the pharmaceutical contract manufacturers in India in recent times.


Restrictions faced by some companies due to global financial crises This outsourcing demand exists mainly in the R&D focused biotech industry. There are many VC investors whose global funding models have changed mainly due to a funding shortage. There are various biotech companies that have reduced their programs and some have even gone to the extent of closing the entire operation. Due to worldwide financial crises some small R&D companies have less demand for outsourcing.


But irrespective of this fact there are certain benefits of pharma contract manufacturing companies that cannot be ignored – 

It drastically reduces cost

It brings down drug development risks

Manufacturing facilities are enhanced thus providing an added advantage in product development and has good chances to get various accreditations.


These are few but very strong reasons as to why some solid/liquid/oral formulation manufacturer in India has recognized as well as adapted to contract manufacturing. Pharmaceutical contract manufacturing in India will witness a greater boom in recent years owing to the expertise available in this nation and comparatively lower cost. Note: The information mentioned in this presentation is solely the opinion of the author and is published for informational purposes only; Sava Research or its affiliates bear no responsibility on the authenticity of the information published herein.

Contract Manufacturing Company and Its Role  

Contract manufacturing company plays a significant role in reducing costs and drug development risk thus adding value in product development...