The biopharmaceutical manufacturing industry today is enjoying a rebound in budgets, as the global financial crisis continues to recede. Despite positive signs, lessons learned from the economic crunch remain fresh, and continue to drive demand for cost-cutting and productivity. Our recently released 10th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production [1] shows that operational changes and cost-cutting measures instituted 3-4 years ago are still defining manufacturing strategy today. The resulting pressure to improve productivity and operational efficiency means companies continue to seek ways to get more performance from both their employees and their technical operations.
Indeed, results from studies in prior years suggest that productivity and cost cutting are the primary areas where companies have been making organizational changes. In fact, the top four areas slated for operational changes last year were all related to getting more from existing resources: Productivity, cost-cutting, employee performance, and production quality.
All the focus on productivity and efficiency begs a simple question: What are facilities doing today to improve bioprocessing performance?
We posed this question to 238 biotherapeutic developers and contract manufacturing organizations (CMOs) in our annual study. Respondents indicated that the leading factors creating “significant” or “some” improvements at their facilities over the past 12 months were:
- Improved upstream production operations (72.7%);
- Improved downstream production operations (71.3%);
- Overall better control of process (70.6%);
- Better analytical testing and product release services (67.8%);
- Use of disposable/single use devices (65.7%).
But those numbers don’t tell the whole story. When we segregated respondents into two groups - biotherapeutic developers only and CMOs – we found distinct differences in their approaches.
Among CMOs, 3 factors vied for the lead, each cited by over 72% of CMOs. They were:
• Improved downstream production operations;
• Better analytical testing and product release services; and
• Better design of experiments, related to process development.
Interestingly, while a similar proportion of CMOs and biodevelopers pointed to downstream operations and better analytical testing as creating improved performance, there was a large gap between CMOs and biodevelopers when it came to better design of experiments. It was one of the leading factors for CMOs, but was only cited by 48% of biodevelopers as creating performance improvements.
CMOs also found relatively greater performance improvements versus developers from more automated control of processes (61.1% v. 46.4%) and better plant design (66.7% vs. 45.6%). By contrast, they found relatively lesser improvements from optimized cell culture processes (44.4% vs. 66.4%), optimized media (50% vs. 62.4%) and improved validation services (33.3% vs. 40.8%).

Budgets Are Up, Cost-Cutting Actions Down
While the industry’s focus clearly is on creating more efficient organizations, our study indicates an easing of prior economic stresses. Two signs point to a larger focus on employee-driven gains this year.
The first is budget expansion. This year, budgets for process development are estimated by respondents to be up by 5.5%, with close to 5% budget increases also slated for new technologies to improve efficiencies/costs for downstream and upstream production, new capital equipment, and for training for operations staff.
Some of the biggest increases relative to last year’s responses are in staffing. In particular, after an estimated 2.6% rise last year, respondents are projecting another 4.3% increase in budgets for hiring new operations staff. Similarly, after a 2% gain last year, this year the estimated budget increase for hiring new scientific staff stands at a robust 3.7%.
These are important figures because the industry tends to be very people-oriented. Organizations simply cannot achieve the efficiency gains they desire without hiring, training and retaining high-quality talent. This is especially the case in production and process development areas.
Fewer respondents are downsizing to reduce costs. This year, when we asked the industry which actions they had taken during the past 12 months to reduce overall costs, 28% said they had reduced headcount, a 22% relative drop from 35.9% of respondents last year, and an even bigger drop from 40.6% in 2011. That suggests that the industry is not cutting back, and coupled with the above data, indicates instead that facilities are actively looking to invest in talent to increase productivity.

Opportunity for CMOs?
Our data suggests that CMOs might be well positioned to take advantage of new trends in cost-cutting actions. While this year there was a clear trend towards less cost-cutting activities, one area stood out in the data: outsourcing.
In fact, there was a general increase in the proportion of respondents this year who said they had outsourced activities for cost-cutting reasons. A few of these are shown below:
- Outsourced jobs in manufacturing (16.8% this year, versus 11.8% in 2011);
- Outsourced manufacturing to domestic service providers (14% this year, versus 7.1% in 2011);
- Outsourced manufacturing to non-domestic service providers (off-shoring; 12.6% this year versus 5.7% in 2011)
This indicates that cost concerns may be playing a greater role in the decision to use a CMO, rather than manufacturing in-house. Separately, our study shows that outsourcing is becoming more of a strategic priority. If CMOs are able to marry their expertise with a perception that they also provide cost-savings, the use of outsourcing is likely to rise even more than it already has.

Looking Forward
Our current study reviews 10 years of bioprocessing trends and signals an expanding opportunity for CMOs, who often have the technical expertise to offer clients, in addition to their basic manufacturing efficiency. Yet being able to meet the client demands involves CMOs themselves becoming leaner and more efficient to support their dual roles as value-adding and cost-saving partners. The CMO model involves multiple projects in the pipeline, reduced capital investment and fast turn-around – each of which requires a commitment to optimization of process and design.
It’s clear from our data that focusing on elements, such as design of experiments, related to process development, have been working for CMOs. Given their different infrastructure needs, it’s understandable also that CMOs might realize productivity gains on the back of better plant design.
But as to whether CMOs’ performance-improvement approaches have created a long-term advantage for their clients through technical expertise and cost-saving, time – and the balance sheet – will tell.

1. 10th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production, April 2013, Rockville, MD

Survey Methodology: The 2013 Tenth Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production yields a composite view and trend analysis from 238 responsible individuals at biopharmaceutical manufacturers and contract manufacturing organizations (CMOs) in 29 countries. The methodology also included over 158 direct suppliers of materials, services and equipment to this industry. This year’s study covers such issues as: new product needs, facility budget changes, current capacity, future capacity constraints, expansions, use of disposables, trends and budgets in disposables, trends in downstream purification, quality management and control, hiring issues, and employment. The quantitative trend analysis provides details and comparisons of production by biotherapeutic developers and CMOs. It also evaluates trends over time, and assesses differences in the world’s major markets in the U.S. and Europe.