By: John Jansen, Head of Global Marketing & Intelligence, CurTec

INTRODUCTION

Small-molecule supply chains are becoming more fragmented as pharmaceutical companies distribute manufacturing across an increasing range of specialist facilities, regions and external partners. A single product may pass through five or six sites before reaching a patient, with every handoff introducing another opportunity for variation and operational complexity that could delay the final product reaching patients.

Pharma companies may not be able to reduce the number of transfers involved, but they can make those transfers more consistent. This relies on a secondary bulk packaging strategy that:

• Protects products through repeated transportation, storage, sampling and handling.
• Reduces variation in packaging formats between manufacturing partners.
• Supports more predictable receipt, inspection and release processes.
• Provides greater operational control across outsourced networks.
• Matches protection to product-specific risks, such as light or moisture.

This article examines the forces fragmenting small-molecule supply chains and explains why bulk secondary packaging should be treated as an operational tool rather than a downstream procurement decision.

AN INCREASINGLY DISJOINTED SMALL-MOLECULE SUPPLY CHAIN

Pharma supply chains have always been relatively complex, with manufacturing rarely confined to a single location or organization. However, over decades, these supply chains have grown more intricate, shaped by cost, expertise and regulatory requirements. This complexity has intensified further in recent years as a result of two key elements:

Geographic fragmentation

Offshoring API production to Asia has been a long-established feature of the pharmaceutical industry. By 2018, more than half of the world’s API manufacturing facilities were concentrated in China and India.¹

Some companies have now begun reshoring selected API production to the US to reduce reliance on manufacturing concentrated in a single region. At the same time, parts of API production have shifted to Eastern Europe to protect supply chains. Rather than replacing Asia’s manufacturing base, these developments have expanded the global production network, creating additional manufacturing hubs across multiple regions.

Despite this diversification, Asia remains the dominant manufacturing center. Economic factors continue to favor production in the region, with API manufacturing costs estimated to be 30 to 35% lower in India and 35 to 40% lower in China than in the US.² Companies considering relocating production may find this option to be prohibitively expensive. Relocating cephalosporin API manufacturing to Europe, for example, has been estimated to increase costs by $88 million, making production five times more expensive than in China.³

The result is a geographically dispersed supply chain that still depends heavily on Asian manufacturing. A recent European cohort study of 10 high-use medicinal products found that while finished pharmaceutical product (FPP) manufacturing occurred predominantly within Europe, API manufacturing for 30% of those products took place outside Europe.⁴

Increasing manufacturing complexity

Modern API synthesis for many small molecules, particularly in oncology and antiviral therapies, involves an average of around six synthesis steps.⁵ As synthetic routes become more complex, API production increasingly requires specialist chemistry capabilities, dedicated equipment and expertise that are available at only a limited number of manufacturing sites.

Beyond API synthesis, the manufacture of small molecule therapeutics has also become more specialized. The growing use of high-potency APIs (HPAPIs) and the highly potent drug products manufactured from them has increased demand for high-containment facilities throughout formulation, filling and packaging, alongside specialized equipment and handling procedures. As a result, different stages of production are increasingly carried out by specialist manufacturing partners. Companies that once performed much of this work in-house now rely on specialist contract development and manufacturing organizations (CDMOs) to provide these capabilities. Reflecting this shift, the global small molecule CDMO market is projected to grow from approximately $73 billion in 2024 to $145 billion by 2034.⁶ Specialist manufacturing has subsequently become the industry’s standard operating model.

ADDED COMPLEXITY FOR EVERY HANDOFF

As small molecule manufacturing becomes increasingly fragmented, materials spend more time moving between manufacturing stages, facilities and organizations before the finished product reaches the patient. Some transfers take place within a single manufacturing site as materials move through processing, while others occur between specialist partners such as API manufacturers, CDMOs, formulation sites, contract packagers and distributors.

Beyond this physical movement between sites, some companies build a deliberate delay into their supply chain strategy. Under a postponement strategy, finished tablets or capsules are shipped in bulk and packaged into market-specific formats at a later stage, nearer to the market where the product will be sold. Companies choose this approach to address differing labeling requirements between markets or local regulations that require in-country finishing.

Every additional transfer introduces another handling event that must be carefully managed. Whether the transfer occurs within the same company or between external partners, materials are typically subject to a hold-and-release protocol, during which they remain quarantined while sampling, testing, documentation and quality reviews are completed. They are released only once the receiving site confirms that requirements have been met.

Each transfer also involves loading, unloading, receipt and inspection. The product must therefore be accepted into a new operational and quality system before manufacturing can continue.

THE INCREASED RISK OF VARIATION

As the number of handoffs increases, every receiving site, whether internal or external to the sending site, assumes responsibility for confirming product quality and regulatory compliance before manufacturing can resume. At this stage, materials will be unloaded, received into storage, sampled, inspected and prepared for the next stage of manufacture at each transfer point.

Although these activities are performed under tightly controlled conditions, every additional transfer creates another opportunity for variation. Containers may be lifted, moved, stacked and transported multiple times before reaching the patient, while sampling often requires them to be opened and resealed before continuing through the supply chain. Each interaction introduces another opportunity for container damage, handling-related deviations or unexpected observations.

When these deviations occur, the consequences extend beyond the transfer itself. Damaged containers or discrepancies identified during inspection may require additional investigation, documentation and quality review before materials can be released to the next manufacturing stage. Even where product quality is ultimately confirmed, these activities add further delay to an already fragmented supply chain, increasing operational effort across the network.

The consequences often emerge further downstream. Pharmaceutical recalls linked to supplier or contract manufacturing quality failures have increased by approximately 16% annually.⁷ In a multi-site network, a problem introduced at one transfer point can affect every stage that follows, reinforcing the importance of minimizing unnecessary variation wherever products move between organizations.

BUILDING RESILIENCE INTO A FRAGMENTED SUPPLY CHAIN

Although reducing the number of handoffs would help to minimize risk, for many companies, this option is rarely practical. Many of the factors driving fragmentation, including specialist manufacturing capabilities, geographic diversification and regulatory requirements, are outside the control of individual organizations.

Building resilience depends on making each transfer as predictable and efficient as possible, limiting the operational burden introduced every time a product moves between sites and organizations. This means designing processes that reduce unnecessary variability at transfer points helps prevent minor operational issues from becoming wider supply chain disruptions.

Treat packaging as an operational tool

Bulk secondary packaging is one of the few elements that remains consistent as a product moves between manufacturing sites. While facilities, personnel and operating procedures may change, the same container supports storage, transport and transfer throughout the supply chain.

For that reason, bulk secondary packaging has become an operational tool that helps reduce unnecessary variability between sites and supports more consistent product transfers. Packaging intended for repeated transfers should be robust enough to withstand transport, movement and storage across multiple facilities. Secure closures should support repeated opening and resealing during inspection and sampling, while standardized formats can simplify operations for manufacturing partners that regularly work with the same packaging systems.

Packaging strategy should therefore be considered alongside manufacturing and logistics planning rather than being addressed after those decisions have been made.

Taking ownership of packaging strategy

Although manufacturing may be distributed across multiple CDMOs and specialist partners, pharma companies and pharma suppliers do not have to relinquish control over how products move through the supply chain. While individual manufacturing processes may vary between sites, companies can establish a consistent packaging strategy that applies across every transfer point.

Specifying standardized bulk secondary packaging from the outset helps create greater consistency across outsourced manufacturing networks. Rather than allowing packaging formats to vary between manufacturing partners, drug owners can define packaging requirements that support storage, transport and handling throughout the product journey. This provides greater operational control, reduces unnecessary variability between sites and helps ensure materials are transferred under consistent conditions regardless of where manufacturing takes place.

Match the packaging format to the product

Packaging should be selected according to the product’s physical characteristics, stability profile and route through the supply chain. Light-sensitive products provide a clear example; they require UV-protective packaging throughout manufacturing, storage and transport. Standard containers should not be assumed to provide sufficient UV protection, as many commonly used materials and colors remain partially transparent to UV radiation unless specifically formulated and tested for this purpose.

As pharmaceutical manufacturing continues to become more distributed, supply chain resilience will increasingly depend on the decisions made long before products leave the production line. Packaging alone cannot remove the complexity of multi-site manufacturing, but selecting the right packaging from the outset can help create a more consistent, efficient and resilient product journey.

MANAGING WHAT CAN BE CONTROLLED

The forces driving supply chain fragmentation, from specialist manufacturing and geographic diversification to increasing reliance on CDMOs, show little sign of slowing. As small molecule manufacturing continues to span more sites, partners and markets, resilience will depend less on reducing complexity than on managing it effectively.

Every additional transfer creates another opportunity for delay, variation and operational inefficiency. While pharma companies and pharma suppliers cannot eliminate the need for specialist manufacturing or outsourced production, they can influence how materials move through that network. Establishing a consistent bulk secondary packaging strategy provides one of the few opportunities to standardize product handling across multiple facilities and manufacturing partners, reducing unnecessary variability while supporting more predictable product transfers.

Bulk secondary packaging should be viewed as an operational tool that helps maintain consistency across increasingly fragmented manufacturing networks. By considering packaging as part of the overall supply chain strategy rather than a downstream procurement decision, companies can strengthen resilience, improve operational control and reduce the cumulative risks associated with every handoff.

REFERENCES

1. Socal, M. P., Ahn, K., Greene, J. A., & Anderson, G. F. (2023). Competition and vulnerabilities in the global supply chain for U.S. generic active pharmaceutical ingredients. Health Affairs, 42(3), 407-415.
2. Chandana, D. (2024, February). Overview of the active pharmaceutical ingredient market. IQVIA Chemical Intelligence.
3. Fischer, S., Knoll, V., Alleweldt, F., & Vogler, S. (2023). Potential measures to facilitate the production of active pharmaceutical ingredients (APIs) (PE 740.070). European Parliament.
4. Postma, D. J., De Smet, P. A. G. M., Mantel-Teeuwisse, A. K., Leufkens, H. G. M., & Notenboom, K. (2025). Upstream pharmaceutical supply chains of 10 high-use pharmaceuticals in the Netherlands: A cohort study. BMJ Open, 15(4), e099697
5. Huffman, M. A., Pearson, M. S., Hsu, M. S., Hojczyk, K. N., Bhandari, A. and Journet, M. (2015). Development of a scalable synthesis of a CGRP receptor antagonist. Organic Process Research & Development, 19(4), 481-492.
6. Towards Healthcare. (2026, April 21). Small molecule CDMO market size & optimize drug development: Market sizing and forecasts.
7. Shanley, A. (2014, May 6). Managing contract partners: Do we have a failure to communicate? Pharma Manufacturing.

BIOGRAPHY

John Jansen is Head of Global Marketing & Intelligence at Netherlands-based CurTec, a provider of design, manufacture, and distribution of high-performance packaging for leading pharmaceutical, specialty chemicals, and food ingredients companies. John has been with the business for over seven years, helping it to deliver consistent growth in a highly competitive marketplace.