The rules of outsourcing are being rewritten, and companies still optimizing for unit cost are building on the wrong foundation
At CDMO Live Europe 2026 in Rotterdam, the annual gathering of biopharma outsourcing leaders, PharmaSource put a set of questions to five organizations representing different parts of the CDMO value chain.
Contributors included Ofichem, an integrated European CDMO and pharmaceutical supplier; Quotient Sciences, a drug development and manufacturing CDMO; Abzena, a biologics-focused CDMO; Tjoapack, a specialist packaging and labeling CDMO; and Samsung Biologics, one of the world’s largest contract biologics manufacturers.
Here is what they said.
Geopolitics Is Forcing a Structural Reset in Where Investment Goes
The question of where to invest is changing. The consensus across all five organizations is that geographic arbitrage as a primary investment logic is over.
“Geopolitical pressures have fundamentally changed how the pharmaceutical industry approaches investment,” said Tom Stephens, Head of Business Development & Sales, Drug Substance, and Lee Ayres, Managing Director, Drug Product Development, at Ofichem. “Long, fragile global supply chains were no longer sustainable. Geopolitical tension, supply chain disruption, natural disasters, and growing regulatory scrutiny all pointed in the same direction: proximity, control, and integration would matter more than marginal cost advantages.”
That thinking drove Ofichem to expand its European footprint through acquisitions across both drug substance and drug product capabilities in 2025.
For Tjoapack, a packaging and labeling specialist, the answer was transatlantic redundancy. Thomas Hauser, Director of Business Development, pointed to the Alcami–Tjoapack combination as a response to geopolitical pressure, creating US–Europe redundancy for packaging and labeling, adding European QP-release capability, and reducing supplier hand-offs. “Geopolitics is moving investment decisions from ‘where is the lowest-cost or most optimal global site?’ to ‘where can we give customers regional resilience, regulatory confidence, and continuity of supply?'” Hauser said.
Hauser also cited the BIOSECURE Act — signed into US law in December 2025 — as accelerating supplier re-evaluation and geographic diversification across biopharma outsourcing.
Samsung Biologics put it in terms of client behavior. “Clients are no longer simply looking for an outsourcing site with sufficient capacity,” said Minjeong Seong, Director of Market Intelligence. “As a result, CDMOs are also moving beyond investment strategies focused only on capacity expansion. Investment is increasingly directed toward building trusted manufacturing networks, strengthening global regulatory compliance, upgrading quality systems, and securing geographically resilient production infrastructure that can give clients greater confidence in long-term supply continuity.”
For Abzena, a biologics CDMO, there is a clear direction. “Given that 80% of the market is in the USA, there’s clearly a much better understanding of the risk that global supply chains present,” said Geoffrey Glass, CEO. “The ‘risk off’ posture of therapeutic developers has led us and the industry to invest much more in the USA.”
Capacity Is Uneven, and ‘Available’ Doesn’t Mean ‘Right’
Overcapacity and undersupply are both real, and they coexist. Contributors agreed that headline capacity figures mask where execution capability is actually scarce.
“We are seeing a very uneven capacity picture,” said Ofichem’s Stephens and Ayres. “Capacity remains tight where technical complexity and regulatory risk are highest. Programmes involving highly potent OEB 4–5 compounds, low-volume niche products, poorly soluble molecules, and technically demanding formulations continue to face limited availability of truly capable partners.”
Quotient Sciences sees regional pricing pressure in commoditized high-volume solid oral dosage manufacturing, while demand for niche areas remains strong. “Demand for niche manufacturing areas like highly potent API drug products and pediatrics is strong,” said Robert Cornog, Senior Director, Product Development.
Abzena’s Glass said, “capacity, as a term, immediately engenders a commoditized offering that can be easily replicated. Anyone can build capacity with money and time. Capability is much more important. What we’ve learned at Abzena is that there is a scarcity of capability to develop complex biologics comprehensively.”
Samsung Biologics’ Ryan Lee, Senior Director of Sales and Operations, echoed that framing for next-generation modalities. “Capacity for more conventional or standardized products may become saturated. However, capacity that can support current biopharmaceutical innovation trends — producing complex biologics reliably at commercial quality standards — remains limited and continues to be in high demand.”
Tjoapack’s Hauser says, “the industry should stop asking only, ‘Who has capacity?’ and start asking, ‘Who has the right capability, in the right region, with the right quality system, for this product?'”
AI Is Delivering, But Only Where It’s Embedded in Validated Processes
Across five contributors, the one consistent message on AI is that the value is real, but only where implementation is disciplined.
Jinhan Kim, Vice President of Artificial Intelligence at Samsung Biologics, identified three areas delivering measurable returns today.
- Predictive maintenance of production assets using IoT sensors and LLM-driven diagnostic agents
- Vision intelligence systems for quality inspection that can outperform human inspectors in container closure integrity and particulate detection
- Supply chain optimization via digital twins that unify materials, batches, equipment, and clients into a single data layer.
Ofichem’s focus is lower in the technology stack, and deliberately so. “Electronic batch records and electronic laboratory notebooks have significantly improved data integrity, traceability, audit readiness, and batch review efficiency,” said Stephens and Ayres. They also pointed to the FDA’s first AI-related warning letter in 2026 as a reminder that cGMP responsibility cannot be delegated to algorithms.
Quotient Sciences is taking AI into formulation design through its partnership with Intrepid Labs, combining AI-driven formulation platform Andromeda™ with Quotient’s Translational Pharmaceutics® platform. The goals are faster time to clinic, API savings, and improved formulation decisions. “AI-enabled formulation design, modeling, and decision support have moved from promise to practical impact when integrated with real-world data and execution,” said Asma Patel, VP, Global Commercial and Scientific Consulting.
Abzena’s Glass explained that, “we’re going to see our industry use AI in the easier and faster-to-implement areas first. These include compiling reports, ensuring standardization, and ensuring the completeness of key deliverables such as analytical methods. The efficiency gains through the elimination of ‘manual’ work will happen first — the value of which shouldn’t be underestimated.”
Tjoapack’s Hauser pointed to serialization as an operational example that has moved beyond regulatory compliance into supply chain visibility, recall precision, inventory optimization, and forecasting insight.
The Structural Change the Sector Must Make: End the Hand-Offs
Asked to name the single structural change the CDMO sector must make in the next five years, contributors converged on the same answer from different directions. The sequential, siloed model of outsourcing is no longer fit for purpose.
“The CDMO sector must structurally integrate accountability across DS and DP rather than continuing to operate through disconnected hand-offs,” said Ofichem’s Stephens and Ayres. “Too many outsourcing models are still organized sequentially: development is separated from manufacturing, DS from DP, and technical execution from regulatory strategy. That fragmentation creates risk where programmes are most vulnerable.”
Quotient Sciences’ Cornog framed it as a shift from transactional capacity to partnership. “Traditional delivery of services has been siloed and purely transactional in nature. Instead, the focus needs to be on supporting the entirety of the product lifecycle with cross-functional delivery, not just using manufacturing or analytical capacity as the main selling point.”
Tjoapack’s Hauser identified the same problem from a packaging perspective. “Customers do not just need a slot on a line. They need partners who can help manage complexity, regional risk, regulatory expectations, packaging format changes, product launches, and lifecycle supply.” The Alcami–Tjoapack combination, he argued, is a structural response, connecting packaging and labeling with drug product manufacturing, lab services, GMP storage, QP release, and transatlantic reach.
The Assumptions That Need Challenging
Each contributor was asked to name one industry assumption they believe is wrong.
Ofichem challenged the premise that the lowest-cost manufacturing model is the most efficient. “The true cost of pharmaceutical manufacturing is measured by more than the price per batch. It also includes the cost of delays, quality deviations, supply interruptions, repeated tech transfers, and fragmented accountability.”
Samsung Biologics’ Seong targeted the same assumption from a total cost of ownership perspective. “When selecting a biologics CDMO, the real economics should be assessed not only by manufacturing unit cost, but through the lens of total cost of ownership. Even if the initial manufacturing quote appears attractive, quality issues, approval delays, or supply interruptions can result in significant financial losses.”
Tjoapack’s Hauser went after interchangeability. “Two suppliers may both say they offer packaging, sterile support, or cold-chain services, but the real question is whether they can handle the exact product, format, market, compliance burden, batch profile, and launch timeline.”
Abzena’s Glass is direct. “I find chasing and building aseptic fill/finish capacity for GLP-1s absurd. When innovation by developers in the diabetes and weight-loss space makes weekly injections a relic of the past — which will happen faster than we think — dynamics will shift faster than companies can adapt. I predict that in 10 years, we’re going to see empty sterile plants all over the world.”
CDMO Live: Where the Industry’s Real Conversations Happen
Several contributors reflected specifically on what CDMO Live provided as a platform, and the answers were consistent with why the conversations above matter.
“CDMO Live is valuable for us because it is one of the few industry platforms focused on practical realities rather than broad marketing narratives,” said Ofichem’s Stephens and Ayres, noting that conversations at the event surfaced a common pain point among pharma and biotech leaders: unnecessary tech transfers between CDMO partners during clinical development, adding cost and delay that compound across modalities and dosage forms.
Quotient Sciences’ Cornog valued the EU customer access and the direct intelligence on evolving outsourcing needs. Samsung Biologics’ Jeff Mason, VP and Head of the New Jersey Sales Office, put it in terms of the questions the event allows them to ask: “We would like to hear directly from clients about their current outsourcing pain points — which risks are most concerning to them today, which modalities or capabilities they believe are in short supply, and what expectations they have for further CDMO partnership. These practical insights are often not captured through public information or market reports alone.”
CDMO Live Europe 2026 took place May 19–21 in Rotterdam. The inaugural CDMO Live Americas takes place October 19–21 2026 in Boston. CDMO Live Europe 2027 takes place May 25–27 in Rotterdam.
