Chapter 4

Opportunities for Asian CDMOs to enhance their presence in the European market
The current landscape presents a compelling opportunity for Asian CDMOs to establish pharmaceutical manufacturing capacities in Europe. A strategic move towards Europe aligns well with the evolving dynamics of the global pharmaceutical supply chain, which has been experiencing significant shifts due to various factors, including the recent trend of reversing outsourcing to Asia.
Firstly, it is crucial to understand the context of the supply chain shortages that have plagued the pharmaceutical industry. Historically, the industry has heavily relied on outsourcing manufacturing to Asia, primarily due to cost advantages. However, this over-dependence has led to significant vulnerabilities, as evidenced by recent disruptions. These disruptions have been caused by a range of factors, including geopolitical tensions, trade conflicts, and most notably, the global pandemic, which exposed the fragility of long, complex supply chains.
The resulting shortages in drug availability have not only impacted healthcare systems but also raised concerns among policymakers and industry stakeholders in Europe. There is a growing recognition of the need for more resilient supply chains, which has led to a significant shift in the mindset of European government and industry representatives towards on-shoring or near-shoring of pharmaceutical manufacturing. This shift is not merely a reactionary measure but a strategic realignment to ensure a more stable and reliable supply of essential medicines.
In this context, European governments, particularly in UK, Germany, Austria, Belgium, the Nordics, the Netherlands, and Ireland, are increasingly aware of the importance of domestic pharmaceutical manufacturing. They are actively seeking to attract companies that can contribute to the robustness of their healthcare sectors and are prepared to offer significant support and incentives to companies willing to establish or expand their manufacturing capacities within their borders.
Government support comes in various forms, including tax incentives, streamlined political approvals, and potentially direct financial support. These incentives are part of a broader strategy to create a more self-sufficient healthcare ecosystem in Europe. By establishing a manufacturing presence in Europe, Asian CDMOs not only benefit from these incentives but also position themselves strategically in a market that is actively seeking to diversify its pharmaceutical supply sources.
In conclusion, the current environment presents a unique opportunity for Asian CDMOs to be at the forefront of a significant shift in the European pharmaceutical manufacturing landscape. As governments are currently facing shortages in drug availability, they are more than ever inclined to support Asian CDMOs venturing into Europe.
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