U.S. pharmaceutical manufacturers are showing increased confidence in renewed growth and are returning some lower cost manufacturing work that was previously outsourced overseas, according to a new report from CPhI, part of UBM EMEA’s Pharma portfolio.
CPhI launched its comprehensive review of the U.S. pharmaceutical manufacturing market at InformEx 2016 in New Orleans last week.
The report said that the turnaround in the U.S. market’s revenue potential is being driven by concerns over quality in some Asian markets and a marked shift in the drug development pipeline towards difficult to formulate drugs and biosimilars.
Among generics manufacturers, CPhI found a trend towards sourcing of active pharmaceutical ingredients (APIs) within the United States and near-field manufacturing sites in Mexico and Canada.
At the same time, international manufacturers and CMOs (contract manufacturing organizations) are scrambling to get a manufacturing foothold in the U.S. market.
“These acquisitions are being driven by the need to acquire specialist technical capabilities and perhaps more significantly, sterile and biologic capabilities. International companies with the dual benefits of development capabilities in the U.S. and generic facilities in lower cost regions look extremely well placed for sizeable future growth,” the report said.
CPhI also found that the TTIP (Transatlantic Trade and Investment Partnership), TPP (Trans-Pacific Partnership) and TPA (Trade Promotion Authority) are welcomed by generic manufacturers — despite the potential patent extensions to biosimilars — because they believe that these partnerships are making domestic generic manufacturers more competitive with their overseas rivals.
However, smaller generic firms are likely to be acquired or cease production due to GDUFA (Generic Drug User Fee Amendment) fees, which companies have to pay at a standard flat rate.
Overall, the future for domestic manufacturers should see them grow organically due to the favorable conditions, with consolidations occurring among smaller players. International companies supplying into the United States are now at a “crucial tipping point”, whereby they need to enter the U.S. market with domestic assets or risk getting left behind, CPhI suggested.
“The reported return of API manufacturing to the USA is a massive positive for the regional industry — with costs rising in Asia, the move towards high-value drugs and the risk/cost analysis strongly favoring future U.S. growth,” said Rutger Oudejans, pharma brand director at UBM EMEA. “The American market is also now well placed to be a leader in biologics, and with the growth in personalized medicine, biomarkers and combination drugs the domestic manufacturing base seems well suited to capitalize.”
Oudejans added: “With this as a background, it is important that international companies without regional facilities look to secure a foothold in the American market or invest in a prescriptive new business strategy.”