3rd party manufacturing has emerged as a transformative force in the industrial landscape. Instead of seeing it merely as an outsourcing model, it’s important to understand its significance in the broader context.
This manufacturing approach acts as a bridge between companies with limited production capabilities to a world of endless possibilities without the capital-intensive hustle. It isn’t just about numbers but the fundamental evolution of how industries engage with the supply chain.
For instance, North America’s Contract Manufacturing market is in a race, projected to hit a whopping 6.8% CAGR by 2030. Asia Pacific, on the other hand, is dominating with a 41.3% revenue share in the pharmaceutical 3rd party manufacturing market as of 2022.
Now the pertinent question is, should business owners really afford to ignore a model that optimises costs, speeds up production, and caters to niche markets, all while maintaining strict brand control?
Today we’ll explore the intricacies of 3rd party manufacturing and talk about the promising avenues it paves for the future.
What Does 3rd Party Manufacturing Look Like In Pharma?
At its core, 3rd party manufacturing in the pharma industry is straightforward: a business provides its product design to another company, known as the 3rd party, which then manufactures the product on behalf of the first business.
The role it plays in the manufacturing ecosystem is pivotal:
- Economic Sense: It reduces the need for businesses to invest heavily in their own manufacturing facilities. This saves money and resources.
- Flexibility: Businesses can adjust production quantities as per demand without the hassle of restructuring their own facilities.
- Access to Expertise: Manufacturers, having their sole focus on production, often have specialised skills and equipment that might be out of reach for smaller businesses.
How 3rd Party Manufacturing Shapes The Pharma Landscape
3rd Party Manufacturing has become increasingly significant in meeting global health demands and challenges in multiple ways:
1. Drug Development & Production
While a pharmaceutical company might specialise in drug discovery and design, it might not have the necessary expertise for large-scale production. Here, contract manufacturers step in to produce the required quantities, adhering to industry standards and regulations.
2. Economic Production
Setting up top-notch pharma manufacturing plants can really pinch the pocket. By teaming up with 3rd party manufacturers, pharma businesses can sidestep these hefty costs. It’s a lifesaver for smaller companies or those making limited-run drugs.
3. Specialised Manufacturing
Some drugs require specific manufacturing conditions. Specialty contract manufacturers, with dedicated facilities for certain drug types (like biologics or sterile injectables) can ensure that these unique requirements are met.
4. Quality & Compliance
Regulatory compliance in the pharmaceutical industry is stringent. Experienced contract manufacturers have established quality control systems and are equipped to meet regulatory standards. It ensures that the end products are safe.
5. Scalability & Speed
Especially for new drug launches or sudden increases in demand (like during health crises), contract manufacturers can provide the ability to scale up production quickly.
Emerging Trends in 3rd Party Manufacturing: A Glimpse into the Future
The pharma manufacturing sector, with its undying relevance and growing demands, is evolving at a rapid pace. Among these evolutions, 3rd party manufacturing stands out, propelled by advancements in technology and shifting business dynamics.
Here are the top five future trends and opportunities:
1. AI-driven Drug Discovery & Production
AI and ML algorithms can be used to expedite the drug discovery process. It helps make manufacturing more efficient and cost-effective. AI can be used to generate promising and never-before-seen drug molecules entirely from scratch, rank promising “lead” drug compounds, and identify the most promising molecules for further development.
Imagine if AI could help doctors pinpoint the perfect drug, right timing, sequence, and dose for a patient. That’s what startups like Atomwise are doing, for instance. They’re using AI to predict how various chemicals might act and their potential medicinal benefits.
2. Adoption of Industry 4.0 Technologies
3rd party manufacturing companies are leveraging real-time data analytics, predictive maintenance, and digital twin simulations to optimise drug production and ensure quality consistency.
With the inclusion of IoT and advanced analytics, the manufacturing floor now facilitates proactive decision-making and minimises downtimes. For instance, at Pfizer’s Freiburg plant, they’ve fully adopted continuous manufacturing with the latest tech. The result? Much better product quality and faster operations.
3. Precision Medicine Manufacturing
As we move towards more personalised healthcare solutions, 3rd party manufacturers are investing in creating small-batch, specialised medicines. These batches are tailored to specific patient demographics or even individual patients.
4. Focus on Quality by Design (QbD) and Continuous Manufacturing:
QbD and continuous manufacturing are setting the pace in pharmaceutical manufacturing. QbD integrates quality into the core of the manufacturing process, leading to enhanced product quality and reduced costs. Continuous manufacturing, on the other hand, offers an efficient production process that minimises batch-to-batch variability and bolsters productivity.
5. Securing Supply Chains with Blockchain
The digital age presents both advantages and threats. With the rise in electronic communication, the risk of data breaches has increased. In response, 3rd party manufacturers are turning to blockchain’s robust digital ledgers. Through its secure encryption, blockchain meticulously tracks a medicine’s every move, vouching for its authenticity. This is especially vital for temperature-sensitive meds, like insulin, ensuring they stay effective.
6. Embracing Late-stage Customisation
Late-stage customisation addresses the need for flexibility in production. By only pre-assembling products, manufacturers can quickly adjust based on market demand. With changing regulations and the need to prevent counterfeit medicines, this ability to modify information right up to distribution is indispensable.
With advancements like AI-driven e-platforms, real-time remote tracing through IoT, blockchain-secured supply chains, niche medication specialisation, and late-stage customisation, the future of 3rd party manufacturing is both exciting and promising. These developments offer more than just efficiency. They bring quality, safety, and adaptability to the forefront.
Staying abreast of these transformative trends is essential. As you journey through these advancements, consider partnering with Oakter, an Original Design Manufacturer based in India. With expertise in large-scale manufacturing, IoT product development, and connected electronics, Oakter’s track record boasts of over 500k products shipped monthly.