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PharmTech.com Bio/Pharma Outsourcing Innovation eBook 2023 Pharmaceutical Technology ® 7 industry outlook USA and China top international outsourcing destinations For the 2022 survey, respondents were asked to consid- erfive years in the future and evaluate their facility's plans for international bioprocessing capacity expan- sion. Over 36 countries were identified as potential international outsourcing destinations, which were defined as being outside a respondents' residing coun- try. Among all respondents who cited the use of for- eign-based CDMOs, the US ranked highest, with 39.6% of non-US respondents indicating there was a "strong likelihood" or "likelihood" that they would3outsource production to US-based facilities. This year, China moved to the number two spot with 33.7%, which is up from #10 in 2021. When US respon- dents were looked at specifically, China is now the #1 'possible' destination (47.8%). This was a large increase in respondents who consider China a potential production outsourced location, which occurred from the interest in opportunities arising from its large population and growing middle class. However, the challenges facing China that have been observed since 2004 include patent and intellec- tual property (IP) issues, as continuing concerns block China's advances as an outsourcing destination. Al- though IP issues are being moderated, in recent years, uncertainty around trade policy and other factors have inhibited potential growth. On the other hand, COVID-19 may be accelerating trends toward the acceptance of developing regions' CDMOs to enable a more global supply chain. It may still take years for some CDMOs in India, China, Bra- zil, and other developing countries to come up to full current good manufacturing practice standards and to be accepted as high-qualit y biopharmaceutical manufacturers. However, some, such as WuXi Bio- logics in China, have achieved rapid success and now rank as a top tier global CDMO. To meet patient needs, major customers, market regulators, and healthcare professionals are changing perceptions, and CDMOs in developing countries are now at least being consid- ered as viable option. For respondents outside the United States, 39.6% said they would consider outsourcing production to facilities in the United States as a "likelihood" or "strong likelihood." Germany, the United Kingdom, Singapore, and Japan are known as other major out- sourcing hubs. India rounds out the top three with 25.7% of respondents, up from the fifth position with 21.3% in 2021. Meanwhile, Germany is now ranked fourth, with 23.8% of respondents, from 28.8% in 2021 and 31.4% in 2020 (Figure 3). Conclusion Bioprocessing outsourcing will continue to grow, as more in novative tech nologies are introduced 86.9% 79.4% 75.7% 72.9% 67.3% 66.4% 65.4% 63.6% Analytical testing: Other bioassays Testing: Toxicity testing Validation services Testing: Product characterization Testing: Cell line stability Contract Research (laboratory) Testing: Lot release Fill/Finish Operations 31.7% Analytical testing: Other bioassays 31.6% Testing: Toxicity testing 26.7% Fill/Finish Operations 26.7% Testing: Cell line stability 23.4% Validation services API biologics manufacturing 24.8% 100% 0% 50% 10% 20% 30% 40% 60% 70% 80% 90% FIGURE 2. Selected areas: average percentage of activity outsourced today (2022).