Cost – Process Development and Manufacturing Cost
Drug manufacturing costs (or CDMO prices) are highly secretive and treated as business confidential information. The cost (CDMO price) are varied depending on modalities and stages of development mainly due to complexity of processes.
Roadmap for Drug Product Development and Manufacturing of Biologics
source 1) https://www.sciencedirect.com/science/article/pii/S002235492300477X#fig0002
Typical costs (CDMO price) of large molecules manufacturing can be between 5 times and 10+ times higher than small molecules manufacturing. It can be also much higher if it is a cell and gene therapy.
Over decades, many researchers try to figure out cost and price ratio to estimate “right” amount of investment for new drug product development.
The comprehensive cost estimation for small molecules drug development is available in the National Library of Medicine as a help of guidelines for researchers and start-up companies. 2)
Composite Gantt Chart Roll-up Representing Target ID through Clinical POC (with general cost estimation – small molecules API)
Study of cost estimation of biologics drug development has also been available in the National Library of Medicine 3)
Cost of biologics process development
Cost of biologics manufacturing (cost per batch)
Assumption of total costs and costs by stage
The cost of manufacturing explained in this article is based on samples from some of global pharmaceutical companies. When you decide outsourcing process development or manufacturing your biologics drug products, each CDMO has different pricing mechanism for their services based on their capabilities. In common processes and services, there are also many similarities in terms of pricing structure.
Price of CDMO Development and Manufacturing Services
Price of CDMO is approximately 20% or 30%+ higher than the own cost assumption in each stage in the table above. (also depending on type of modalities, direct costs, additional services such as regulatory compliance support and safety stocks, etc.)
Each CDMO has specific structure for cost recognition and allocations. Across different stages of the project, here are typical ratios based on common CDMO practices:
Typical Ratios in Pricing Structures of Biologics CDMO
- Development (20-30%): Initial stages, including research, development, and process optimisation.
- Manufacturing (40-50%): Core manufacturing processes, including batch production.
- Testing and Quality Control (10-20%): Costs associated with testing, quality assurance, and regulatory compliance.
- Additional Services and Materials (10-20%): Costs for raw materials, external testing, and any extra services requested by the client.
These ratios provide a general framework of CDMO pricing structure, but the exact percentages can vary based on the specific project requirements and the service provider’s pricing model.
I will explain general pricing principles and key elements of CDMO pricing structure in upcoming articles.
If you would like to know more about costs and pricing in biopharmaceutical CDMO, feel free to contact me.
About the author
Juha Kim is a CDMO business consultant and business operations strategist. Equipped with latest studies and business practices, he is building frameworks in the world’s renowned CDMO companies based on his experiences leading various projects in Lonza as a Director, Operations Finance and Business Development Korea roles during the time.
He is also a founder of Korea-Switzerland BioPharma Network (KSBPN) and Korea Pharma Biotech Directory (KPBD) to help establishing business opportunity leads in both directions.
1) Krishnan Sampathkumar, Bruce A. Kerwin. Roadmap for Drug Product Development and Manufacturing of Biologics. Journal of Pharmaceutical Sciences, Volume 113, Issue 2, February 2024, Pages 314-331
2) Markossian S, Grossman A, Arkin M, et al., editors. Bethesda (MD): Eli Lilly & Company and the National Center for Advancing Translational Sciences; 2004
3) Farid SS, Baron M, Stamatis C, Nie W, Coffman J. Benchmarking biopharmaceutical process development and manufacturing cost contributions to R&D. MAbs. 2020 Jan-Dec;12(1):1754999. doi: 10.1080/19420862.2020.1754999. PMID: 32449439; PMCID: PMC7531566
