Challenges for pharma and CMO's due to inflation and declining FDA drug approvals, says analyst

Pharma manufacturers will be challenged by the effects of high inflation and declining US Food and Drug Administration (FDA) drug approvals in 2023. Pharmaceutical companies have a high tendency to outsource the finished dose manufacture of new molecular entities (NME).

A sharp decrease in FDA approvals of the most innovative drugs in 2022 will directly reduce commercial-scale production contracts in 2023 for larger Contract Manufacturing Organizations (CMOs), says analytics company GlobalData.

GlobalData’s latest report, ‘ New Drug Approvals and Their Contract Manufacture – 2023 Edition,’ reveals that the FDA’s NME approvals declined substantially in 2022, causing overall New Drug Application (NDA) approvals to drop, which meant fewer commercial-scale production contracts for the most innovative products. However, GlobalData’s analysis of the FDA’s drug approvals over the last decade found that 2022 was a record year for cell and gene therapy approvals. Approvals of five regenerative medicines made 2022 the most successful year ever for these medicines – following on from the strong performance in 2021.