How Demand for Flexibility is Shaping Facilities of the Future
For decades, successful pharmaceutical manufacturing has been judged on scale. Nowadays, higher precedence is being given to speed, coping with complexity, and customization.
The shift in the global drug development pipeline — from blockbuster molecules to novel targeted therapies — has forced bio/pharma innovators to adapt their strategies to include an increasingly diverse range of therapeutic modalities. As a result, greater demands are being placed on CDMOs to keep pace with their clients’ evolving needs, and leading development and manufacturing partners to re-evaluate how they design, operate, and invest in their facilities.
The Complexity Conundrum
According to analysis by McKinsey, the number of drugs entering the development pipeline has almost doubled over the past decade (1). While crowded therapeutic areas are intensifying competition and shrinking drug exclusivity windows, accelerated development timelines and pricing constraints have also forced drug developers to diversify their therapeutic portfolios and pursue multiple indications simultaneously. Furthermore, demand for smaller production runs and faster timelines — particularly for orphan drugs and personalized therapies — is rising.
As drug molecules become more complex, associated operational costs for their development and manufacture also increase. Clinical trials for these more complex therapies tend to require more endpoints, their manufacture demands advanced infrastructure, and the related supply chains require specialist logistics that can further complicate operations. Therefore, it is unsurprising that the average cost per drug launch now exceeds USD 2 billion, a figure that does not even factor in the costs of failed drug launches (2).
In the search for solutions, drug developers are more frequently turning to CDMOs to help them reduce development and manufacturing complexities and costs. In turn, CDMOs are significantly investing in initiatives including flexible infrastructure, modular manufacturing, integrated digital systems, and end-to-end service models designed to provide solutions that accelerate delivery and better manage costs.
Designing for Change: What Flexibility Really Means
A rising trend among CDMOs, keen to be able to provide more agile and adaptive solutions to innovators developing more complex therapies, are flexible manufacturing systems (FMS). Traditional, fixed manufacturing lines are being replaced by large, open manufacturing spaces that support hybrid approaches and allow multiple modalities to be developed as required. Computer-controlled manufacturing systems incorporate automation efficiency and can be adjusted to custom production as needed.
Yet manufacturing flexibility is not just about physical infrastructure; it is also about data, systems, and the people managing production.
Digitally-enabled facilities are transforming how CDMOs operate and allowing for improved manufacturing efficiencies through faster response rates to changes in processes, raw materials, and client demands. For example, manufacturing execution systems (MES), which provide real-time visibility into production processes, such as inventory management and equipment performance, are helping to drive this transformation. Digital twins (virtual replicas of a physical object, process, or system) use real-time data from sensors to simulate and monitor the performance of real-world counterparts to test changes, predict issues, and optimize operations without disrupting actual production. Additionally, artificial intelligence (AI) and machine learning (ML) tools are optimizing technology transfer and process development by analyzing large datasets to accelerate scaling production and process optimization while maintaining consistency and quality.
Together, these technologies significantly enhance operational flexibility by enabling faster adaptation, smarter decision-making, and efficient scaling, without sacrificing quality or performance. They also reduce risk while strengthening traceability, compliance, and quality assurance — particularly when rapidly switching between projects or ramping up new modalities.
Additionally, multidisciplinary teams with cross-functional expertise enable quicker problem-solving and adaptability in complex environments. Training teams across multiple disciplines and functions ensures that staff can pivot as needed, supporting faster decision-making and more effective collaboration.
Capacity Meets Complexity: Are CDMOs Ready?
Transitioning into new modalities without prior experience presents a steep learning curve for many CDMOs. Smaller, specialized CDMOs are continually successful because they focus on a single modality and excel in niche areas where their expertise can provide tailored solutions. A single specialization allows them to address the unique challenges of specific therapies; however, their narrow focus can limit scalability and the ability to meet broader client demands.
Larger CDMOs, recognizing their own limitations, frequently turn to M&As as a strategy for growth and diversification of their own businesses. By acquiring smaller, specialized companies, they gain immediate access to expertise and capabilities in emerging modalities, providing them with the capacity and expertise to expand their service offerings quickly without the lengthy process of building new capabilities internally, or worse, establishing a new greenfield site (3–5).
However, M&As come with their own set of challenges. Integrating smaller companies into larger organizations is a complex process that requires harmonizing systems, cultures, and operations, which often lead to delays, inefficiencies, and service disruptions if not managed correctly. Additionally, the shift from a boutique-style operation to a larger corporate model may alienate smaller clients who value flexibility and personalized service.
Capacity constraints can also remain an issue after an M&A deal has completed. While acquisitions may provide additional production capacity, development capacity often lags due to shortages of skilled professionals rather than equipment. Balancing the benefits of specialization with the need for scalability will depend on the ability to integrate new capabilities seamlessly while retaining client satisfaction.
Flexibility is the New Foundation for Future-Ready CDMOs
As drug development shifts toward complexity, customization, and accelerated timelines, flexibility is becoming a cornerstone of next-generation CDMO strategy. Clients no longer need capacity alone, they also need adaptable infrastructure, integrated digital systems, and multidisciplinary teams capable of pivoting quickly across modalities and production demands.
To compete, CDMOs must continue investing in facilities that aid flexibility and customization. Yet challenges, in the form of capacity constraints, talent shortages, and integration risks in post-merger environments will be ever present. The winners will be those organizations that can balance speed with quality, specialization with scalability, and innovation with reliability.
Ultimately, success in this evolving market will be defined not by who builds the biggest facility, but by who builds the most adaptable one, and in an industry where change is constant, flexibility is not just a competitive advantage, it is a requirement for survival.
References
Agrawal, G.; Kautzky, J.; Keane, H.; et al. Accelerating Clinical Trials to Improve Biopharma R&D Productivity.
Article, McKinsey & Company, Jan. 22, 2024.Masson, G. Drug Development Cost Pharma $2.2B per Asset in 2024 as GLP-1s Drive Financial Return: Deloitte. Fierce Biotech, March 25, 2025.
The Pharma Navigator. Granules India Buys its Way Into Peptide Market. ThePharmaNavigator.com, March 8, 2025.
The Pharma Navigator. Inventage Lab Acquires 40% Stake in Quratis to Boost mRNA Capabilities. ThePharmaNavigator.com, Feb. 17, 2025.
The Pharma Navigator. Adragos Pharma Expands Global Footprint with Swiss Acquisition. ThePharmaNavigator.com, Dec. 24, 2024.