How CDMO Pricing Works
Cost, Competition, and Strategic Pricing Decisions
Download the CDMO Pricing Playbook:
Why Do CDMO Prices Vary So Much?
Surprise. Confusion. Frustration.
These are common reactions when pharmaceutical companies compare commercial offers for the same product from different CDMOs.
Price differences of 2-3x or more aren’t unusual—even when batch sizes, manufacturing locations, API suppliers, and packaging specs are identical.
More perplexing: sometimes the direct cost is the same between CDMOs, but the price difference is still substantial.
What’s going on?
This comprehensive guide answers that question for two critical audiences:
- For Pharmaceutical Companies: Understand why CDMOs price differently and how to compare offers fairly. Learn what questions to ask beyond price, how to evaluate total cost of ownership, and why the “expensive” CDMO might actually be your best value.
- For CDMOs: Learn how to price strategically, not just reactively. Discover why cost-plus pricing alone leaves value on the table or prices you out of opportunities. Understand how to balance internal costs, market dynamics, and competitive positioning to win the right business at the right price.
The Three-Element Framework
Effective CDMO pricing balances three elements:
1. Cost-Plus: Internal Parameters
Your costs, capacity utilization, risk factors, and strategic considerations
2. Market Minus: Customer Willingness to Pay
What your customer can actually afford based on their market economics
3. Competition: Benchmark Pricing
What other CDMOs offer for similar products
Most CDMOs focus exclusively on cost-plus: calculate costs, add margin, quote price. This inward-looking approach ignores market realities and leads to either leaving money on the table or losing winnable business.
Why Prices Differ So Much
In this fictional case study, we break down how two CDMOs with identical direct costs quote prices differing by 2.6x
The guide explores the breakdown:
- How capacity utilization (75% vs. 40%) creates an €16.65 per thousand difference
- Why corporate overheads add €5.00 per thousand at one CDMO but €0 at another
- How profitability strategy affects pricing decisions
- Why strategic considerations impact price more than you might think
The CDMO Pricing Playbook
Key insights you’ll learn:
✓ Capacity utilization is fundamental to understanding why CDMO prices differ—even with identical costs
✓ The right profitability measurement depends on your business situation (contribution margin vs. gross profit)
✓ Cost-plus pricing alone leaves money on the table or prices you out of opportunities
✓ Customer willingness to pay varies dramatically by product type, therapeutic area, and market
✓ Total cost of ownership matters more than unit price
✓ Transparency improves outcomes for both CDMOs and pharmaceutical companies
✓ Strategic pricing decisions require balancing internal costs, market dynamics, and competitive positioning
About the Authors
George Ntortas and Kyriakos Kansos are the founders of Fuliginous Management Consulting, specializing in pharmaceutical manufacturing strategy and pricing optimization.
They’ve analyzed hundreds of CDMO quotes across Europe and helped both CDMOs and pharmaceutical companies navigate complex pricing decisions.
Attend Their Live Workshop at CDMO Live
George and Kyriakos will be hosting an interactive workshop on pricing at CDMO Live Europe (19-21 May 2026, Rotterdam), featuring real RFQ data and live pricing simulations.
Download Your Free Copy
This 43-page guide includes:
- Detailed frameworks for calculating and comparing CDMO prices
- Real-world case studies with complete financial breakdowns
- Visual aids including pricing comparison tables and decision diagrams
- Practical templates for evaluating quotes fairly
- Risk mitigation strategies for high-value products
- Actionable takeaways for both CDMOs and pharmaceutical companies