We all know there’s an unprecedented wave of patent expirations going on, and that the next several years will see massive revenue loss for major pharmas. Even biopharma companies see the first U.S. biosimilars on the horizon. Small and emerging pharma and biopharma, meanwhile, faces a financing crunch that has crippled their development plans. These phenomena are expressing themselves in the contract services market in a variety of ways.
Concern over cost structures has led the top players to shrink their manufacturing, R&D and sales infrastructures and those companies now tout the benefits of outsourcing in a strategic fashion, not simply engaging in yesterday’s tactical transactions. The smaller players have radically curtailed their programs, focusing on their most advanced compounds. Generics makers are poised for a huge growth-surge but have no interest in making capital investments on equipment that will lie fallow after an exclusivity-period’s first wave of demand.
Which is to say, it’s a brave/scary new world for everyone. On the contract development and manufacturing side, we see providers investing in new capabilities, boosting capacity, working with new client-bases, expanding geographic footprint, developing value-based IP, and engaging in the (sometimes questionable) tactic of buying facilities from large pharma companies on the cheap, with or without a trailing supply agreement. Some firms are working toward the (often questionable) one-stop shop model, and others are springing up in narrowly-focused niches.
All of that, I think, needs to be supplemented with good conversation.
Last September, I asked Pharma Outsourcing Guru — it’s on his business card! — Mak Jawadekar to write about “what makes a good trade show” for his column in our magazine. This somehow led to him recounting the time he shared drinks with Ted Turner and Kofi Annan at a board meeting for a non-profit. His point, as near as I can tell, was that networking is everything.
And for an industry in as much flux as pharma/biopharma is, we can’t overestimate the importance of that point. Virtually every contract service provider I know has told me at some point how interpersonal dynamics play a huge role in gaining and keeping business. Sure, you need the match of capabilities, timelines and cost, but you also need the moment in which both client and sponsor can say to themselves, a la Lady Thatcher, “We can do business together.”
To help facilitate those conversations, we’re partnering with INTERPHEX to sponsor the inaugural INTERPHEXConnects One2One Meetings in the Sourcing & Services Meeting Center. The center not only allows for private meetings between contract service providers and attendees, (You can find details about it at www.interphex.com/One2Onemeetings), it also creates an oasis of casual space in the central lounge area, a nexus point for chance conversations, for the “What do you do?” exchange between potential client and provider. I hope to see you there!
Gil Roth has been the editor of Contract Pharma magazine since its debut in 1999. He can be reached at firstname.lastname@example.org. Contract Pharma is the premier magazine for coverage of pharma and biopharma outsourcing and contract services and has been an INTERPHEX sponsor since 2000.