Firms who wish to enter the bioprocessing market should understand their customers’ purchasing criteria, which largely stem from the regulatory demands associated with making medicines.
The bioprocessing market, which includes the equipment and consumables used in the manufacturing of biologics is estimated to be $304 billion in 2024 and is projected to grow to $500 billion in 2028, according to MKA Insight internal research. The market is stable and sticky and makes for a highly attractive market for new market entrants.
The procurement of raw materials, equipment, and supplies used in biologics manufacturing is a lengthy and tightly controlled process. There are many purchasing criteria that a bioprocessing procurement specialist considers when evaluating new vendors and new raw materials, equipment, and supplies. While a request for information (RFI) or request for proposal (RFP) does a thorough job of detailing many of those technical, safety, compliance and cost specifications – there are certain factors that guide the overall decision-making process.
Nearly all biotech buyers consider the same factors when evaluating new vendors or equipment and supplies. This includes criticality in bioprocessing operations, materials availability and supply, runway to growth, mitigating sourcing risk and in-region for the region.
Criticality in Bioprocessing Operations
When biologics customers procure equipment, supplies or software for their companies, they must consider the impact the item has on the final product, including its proximity to physical manufacturing operations.
A major concern is “product contact.” This definition covers anything that interacts with the raw material throughout its entire production process lifecycle. This includes holding and storage of raw materials and intermediates, transfer, final packaging and manufacturing vessels. While all products are evaluated for potential contamination or risk (including inadvertent exposure), items that come in direct contact with the product are evaluated with greater criticality.
Materials Availability and Supply
If the pandemic taught us one thing, it is that entire industries can grind to a halt when supply chains are hindered. Biologics manufacturers require vendor assurances regarding not just current availability but also over supply options across the next two decades. These decades represent the likely lifespan of that therapeutic and sourcing must weigh a vendor’s ability to meet the long-term supply chain demands of the biologics manufacturer to continually deliver (without disruption to supply or quality) to meet the long-term therapeutic dosing projections.
Runway to Growth
Most biologics manufacturers purchase small quantities to test the quality and performance of a product as well as the ability of the vendor to meet its needs. A critical purchasing criteria for bioprocessing vendor selection is the ability to effectively scale to meet the needs of their biologics customers. This includes not only the ability to provide more product, but the ability to ramp up production capacity in a controlled environment that continues to meet the quality requirements of the customers.
It’s crucial to note that a client’s quality requirements keep increasing as they move closer to final production and product release. Therefore, biologics manufacturers have an expectation for expanded quality in the future. Biologics customers may not always explicitly state this, but they are often looking for partners that can grow with them.
Mitigating Sourcing Risk
Vendors who demonstrate that they share in the desire to mitigate risk will stand out to their clients. This entails deploying a robust procurement process that tracks sustainability and operations. Ideally, vendors must guarantee access to multiple sites, locations and equipment in the case of a disaster.
Biologics customers are more apt to choose partners that understand the criticality of redundancies, backups, and disaster recovery planning.
In-Region for Region
While geographic expansion across boundaries is within every company’s growth strategy. The reality is that all expansion plans that cut across physical boundaries are subject to the inherent bias of nations and people that seek to do business in-region for region. This innate bias is what forces companies that enter new markets to invest in a local presence via feet on the street, office locations and penultimately manufacturing locations that serve the local markets. The faster these investments are made, the quicker companies will see progress towards growth objectives.
A prime example of the struggle of in-region for-region is the challenges of entering the Japanese market. For years, U.S. and European-based companies have struggled to do business in Japan. There is a reluctant acknowledgment that the Japanese market is a “Japan-for-Japanese” market, with limited successes for non-nationals. Time zone differences, language barriers, and cultural differences fuel this issue, making it exceptionally difficult for non-Japanese based companies to sell into the Japanese market. For all intents and purposes, Japan remains a physical and economic island in the sea of potential market opportunities for new market entrants. However, achieving limited successes in this region involves adapting to local cultures, investing locally, operating in the local language, and positioning oneself as a Japanese-first provider of goods and services.
Given that biotech manufacturers rely on the majority of the same metrics for vendor selection, it is in the vendors’ interests to understand and surpass even the most stringent sourcing criteria.
