The challenges facing the pharma industry today - impending patent cliff, pressure coming from pharmerging markets, etc. - make the playing field rife with opportunities for pharma service providers.

Innovation in the pharmaceuticals ingredients industry is being driven by ...

Robert Hardy (Aesica): ... the versatility of contract manufacturing organizations, which are now in a much stronger position because of their ability to offer a greater portfolio of services.
The trend to outsource has been significantly shaped by the rising cost pressure on the pharmaceutical companies. Demand for pharmaceuticals has increased worldwide and this, coupled with improving standards of manufacturing facilities and rising cost pressure on companies, are the prominent factors contributing to the huge growth in the contract manufacturing sector.

The pharmaceutical industry is facing several challenges, which lead to increased demand for contract manufacturing services. These include the rising cost of new product development, increasing competition in generic markets, declining R&D productivity, decrease in average patent life and government pressure to reduce drugs prices. In these circumstances contract manufacturing as a strategic option offers several advantages. Using an outsourced company provides flexibility, a quicker time to market and lower scale up costs.

This means that emerging pharma and biotechnology companies can meet the growing demand for new drugs and focus on their core competencies. Furthermore, outsourcing enables companies to reduce excess capacity in their manufacturing networks and restructure supply chains.

Dr. Ralf Fink (BASF): ... new APIs for the typical therapeutical areas. However, we think that lower solubility and bioavailability will become a significant challenge of our industry and requires intensified innovation efforts in the area of excipients. BASF is part of this innovation process by own R&D activities as well as together with its customers and partners.

Burghard Freiberg (Merck Millipore): ... customer needs. In this industry, services and solutions are constantly evolving to improve customer productivity, minimize complexity and lower costs while reducing risk.

In 10 years, our industry will be ...

Robert Hardy (Aesica): ... much stronger, competitive and diverse with the most significant contribution to the pharmaceutical market coming from emerging economies such as Brazil, Russia, China and India.

In fact, the 2010 IMS Health forecast predicts that pharmaceutical markets in emerging economies will grow at 14-17% year on year between now and 2014. These regions are expected to grow three times faster than mature markets due to a combination of evolving demographics including a rise in incomes, upgrading of health systems and an increased investment in the treatment of chronic diseases.

Factors such as low-production cost and minimum taxes on production will ensure China is an attractive region for drug manufacturing and the export of pharmaceutical products from China has increased considerably during the last few years alone.

Dr. Ralf Fink (BASF): ... different. Cost pressure, strong growth in emerging countries, ongoing market consolidation as well as the emergence of new regional or even global players and a significant higher demand for performance excipients are scenarios we want to be prepared for.

Burghard Freiberg (Merck Millipore): Redefined by forward thinking companies, like Merck Millipore, who are willing to push the envelope in the interest of innovating the pharmaceutical ingredients industry.

The most drastic change that has happened in the last 10 years is ...

Robert Hardy (Aesica): ... the trend for large pharma companies to outsource various stages of the manufacturing process to minimize overheads and reduce capital investment. As they concentrate on R&D and focus on uncovering new compounds while investing in marketing and brand building, they are choosing to outsource all aspects of the manufacturing process to specialist providers. In particular, over course of the last five years there has been an increased demand for formulated products and packaging services.

However, working with a partner that can provide a full service offering from formulation development through to commercial supply, packaging, as well as regulatory support is a unique proposition in the industry.

Dr. Ralf Fink (BASF): ... the importance of the emerging economies and their increasing role along the whole value chain, including R&D.

Burghard Freiberg (Merck Millipore): ... increased global regulation. Now more than ever, pharmaceutical companies are faced with regulatory pressures that need to be addressed. That is why partnering with an organization that deeply understands your challenges and can help assure the quality and safety of products you bring to market, is paramount.

For our business, Asia is ...

Robert Hardy (Aesica): ... a critical market for Aesica and an area we're actively looking at expanding into. Aesica is already a global business with six manufacturing facilities in our growing portfolio. However, further expansion is planned and we are looking at opportunities for strategic acquisitions and the potential of forming long-term partnerships in the U.S. and Asia, especially India, as we look to grow the business further globally.

Dr. Ralf Fink (BASF): ... very important, fascinating and challenging. We are keen to play an even more active role in that part of our world.

Burghard Freiberg (Merck Millipore): ...Essential. We are striving and continuing to build relationships in Asia that will allow us to expand our reach and provide customers - in this rapidly developing market - with innovative products and solutions to meet their goals. We are deeply committed and invested (more than 30 years) to increasing innovation and the quality of the drugs that are made in the region.

Governmental healthcare reforms and cost-reduction plans will ...

Dr. Ralf Fink (BASF): ... continue.

Burghard Freiberg (Merck Millipore): ...Drive innovation in the market and ensure that manufacturers will continue to streamline processes (while advancing technology) to deliver the best possible product to the market.