Contract Development Manufacturing Organization Market Procurement Intelligence, Supplier Intelligence & Ranking, Pricing & Cost Structure Intelligence, Best Practices, Engagement Model, Low & Best Cost Country, Day One Analysis Report, 2020 - 2025

Every organization and its procurement team wants to negotiate the best deal while procuring a set of products or services. Rate benchmarking uses price/cost comparison of more than one set of products/services to analyze the most efficient combination that will help the procurement team to get the optimum rate.

As we have considered API production cost for small molecules, the size of the batch is one of the most important aspects while analyzing the rate benchmarking of an API CDMO service. In our research, we have analyzed the rates of 100,000 and 50,000 vials batch size in the APAC. By using rate benchmarking analysis, we found that running two production batches of 50,000 vials is 5%-6% more cost-efficient than running one production batch of 100,000 vials. Hence, it is advisable to have multiple small batch production lines rather than having a single large batch production line.

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Labor is one of the key cost components incurred while offering a product or service. Understanding the pricing structure of salary is important for organizations in selecting the appropriate supplier and to build a good negotiation strategy. It is also an important factor in determining whether the category under focus should be outsourced or built in-house.

Our research indicates that Lonza operations managers earn 20%-30% higher salaries than operations managers from other key CDMOs like Patheon and Siegfried. However, the YoY increment rate in such companies largely depends on KRAs.

It is cumbersome for any organization to continuously track the latest developments in their supplier landscape. Our newsletter service helps them remain updated, to avoid any supply chain disruption which they may face, and keep a track of the latest innovations from the suppliers. Outsourcing such activities help clients focus on their core offerings. Our research on the CDMO market has identified the following developments:

In August 2021, AGC Biologics, a biopharmaceutical CDMO, announced the acquisition of Novartis’ Longmont, Colorado, manufacturing facility for the commercial production of cell and gene therapies. The 622,000 square feet facility significantly expands AGC Biologics’ capacity for producing cell and gene therapies, with additional space to expand.

In February 2021, Quotient Sciences, U.K.-based drug CDMO announced the acquisition of another U.K based CDMO Arcinova. The acquisition expands Quotient’s service portfolio and will enable the integration of drug substance, drug product, and clinical testing capabilities under one organization.