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© 2010 Frost & Sullivan. All rights reserved. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
Global Contract Manufacturing Trends
Rhenu BhullerGVP, Pharmaceuticals & Biotechnology
Frost & Sullivan
Pharma Contract Manufacturing, Singapore25-26th October 2010
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Agenda
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Global Pharmaceutical Market TrendsGlobal Pharmaceutical Market Trends
The Global CMO MarketThe Global CMO Market
Drivers and ChallengesDrivers and Challenges
Future Trends and OpportunitiesFuture Trends and Opportunities
The Healthcare World is ChangingThe Healthcare World is Changing
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The Healthcare World is Changing
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• Cost Containment
• Reimbursement changes
• “Pay for Performance”
• Comparative effectiveness
The Healthcare World is Changing
U.S. Reform China build-out U.K.
Cost Challenge
• National HC spend more than $100B
• Expanding medical coverage – 500M rural population
• $1B direct hospital investment by 2012
Access Challenge
• Quality & service-related press focus
• Patient “right to choose” in draft NHS charter
• NHS quality charter
• Quality accounts need to be published
Quality Challenge
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Demographics Drive Access Concerns Globally...
China• 1,300 Million population• 3 Million hospital beds• 2.2 beds/1000 people• 1.4 doctors/1000 people• 60,396 hospitals
Japan• 127 Million population• 1.8 Million hospital beds• 9.9 beds/1000 people• 2.7 doctors/1000 people• 7,785 hospitals
India• 1,100 Million population• 0.8 Million hospital beds• 0.7 hospital beds/1000 people• 0.6 doctors/1000 people• 13,896 hospital
Australia •27 million population•0.213 Million hospital beds•7.9 hospital beds / 1000 people•2.5 doctors/1000 people•1,317 hospitals
Korea•48 Million population•0.283 Million hospital beds •5.5 hospitals beds/1000
people•1.7 doctors/1000 people•997 Hospital
Taiwan •23 Million population•0.136 Million hospital beds•5.9 beds per 1000 of the
population •1.6 doctors /1000 people•556 hospitals
Source: Frost & Sullivan
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The Balance Between Young and Old Is Shifting
In 2000, 10% (606 million) of the global population was aged 60+
By 2050, this will be more than 21% (2 billion)
75% of those aged 60+ have one chronic condition - 50% have two or more chronic conditions
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Global Pharmaceutical Market Trends
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Global Pharmaceutical Market . . . A USD880 billion market in 2011 driven by emerging markets
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However . . . pharmaceutical R&D productivity declines
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The Global CMO Market
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Outsourcing across the industry value chain
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Pharmaceutical Contract Manufacturing Market Segmentation
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Global Pharmaceutical Contract Manufacturing Markets expected to be a USD 40 billion market by 2014
US – stable, but reducing global share to 35%US – stable, but reducing global share to 35%
India – among fastest growing markets, exceeding 10% of global volumes by 2012
India – among fastest growing markets, exceeding 10% of global volumes by 2012
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Global comparisons
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Drivers and Challenges in CMO
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Market drivers
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Recessionary Environment
Restraints CMO Expansion Plans to Meet Demand
Risks Associated
with Safety
Issues Threaten
Manufacturers
Consolidation in Biopharmaceutical
Industry Could Result in Cutbacks
on Number of Service providers
Increasing Competition from
Emerging Regions
Threatens US Share of CMOs
Technology Developments
Require Continuous Capital Expenditure
from CMOs
Market challenges
Source: Frost & Sullivan.Source: Frost & Sullivan.
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CMO = cost, competency are key drivers
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Future Trends & Opportunities
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Emerging Trends
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Emerging Opportunity Areas
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Existing CMO business model
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Emerging CMO Business Model
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Partner of choice: The 3 C’s drive choice
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Industry Best Practices
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Conversion of brand awareness to brand preferenceConversion of brand awareness to brand preference
Customer focused alignment of servicesCustomer focused alignment of services
Growth built on the strength of long standing relationships
Growth built on the strength of long standing relationships
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Key Collaborations: India
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Key M & A’s: India
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Indian Contract Manufacturing Services Market: Drivers, Restraints and Challenges
