Background: Contract manufacturing of prescription drugs is perceived to be on the rise, as companies look to optimize manufacturing capacity by either outsourcing or manufacturing for others. The lack of transparency into these proprietary arrangements has led to concerns that outsourcing may result in an overly concentrated manufacturing base, making the system more vulnerable to drug shortages. Methods: Using nonpublic, internal FDA data, we link 374 sterile injectable new drug applications (NDAs) and 797 abbreviated new drug applications (ANDAs, otherwise known as generics) with finished dosage form manufacturing facilities in which the drugs were made as of November 2014. We then examine which kinds of firms were outsourcing which products and for whom. Results: We find that NDAs were twice as likely to be outsourced as ANDAs: 39% versus 19%. Outsourced NDAs were just as likely to be made in the US as in Western Europe (45%), but outsourced ANDAs were mostly made in Asia (57%). Large application holders outsourced 10% of their application portfolio. They also manufactured for othersabout 14% of applications they made were for others. Sixty-one percent of contract manufacturing firms were small and of those, 76% owned no applications. Because so much contract manufacturing of sterile injectables was being done by small players, there were no discernable differences in market concentration measures between application holders and drug manufacturers. Conclusion: The landscape of sterile injectable contract manufacturing in 2014 was diverse, with small and large companies participating. This diversity resulted in a market similar in its concentration on the ownership and manufacturing sides.
