Michael Kadan, Ph.D., MBA, Chief Operating Officer, Vector BioMed
There are many threats to the CDMO industry. Many of them are interconnected and sometimes a result of various factors. And there seems to be a lack of true solutions for cell and gene therapies, despite the continuous flow of exciting scientific breakthrough promises. These combined compound the issue of treatment accessibility.
Macroeconomic threats include continued funding uncertainty and the continued industry panic in response to safety concerns, even for products out of scope for the issues observed. A realistic demonstration of economic viability is required, and this is working against the apparent failure to make in-roads on cost of products and therapies.
The industry barriers working against treatment accessibility are realistically shared between the CDMO industry and developers because, in most cases, they’re dependent on one another. So, mitigating risks will require effort from both sides. With that said, industry barriers include high cost to develop and manufacture, continued use of traditional or legacy production models, slow development, delays, and capacity constraints — and/or ambiguity in reaching development milestones, global barriers to patient access, and a lack of reimbursement.
But I’d say the ‘biggest threat’ to the CDMO industry is the lack of necessary global infrastructure. Clients come to CDMOs for expertise and operational excellence — and a cost-effective method to leverage both. If the current state of the industry continues, that will be the biggest threat to the CDMO industry. It has created bottlenecks at multiple turns, mostly resulting in therapeutics not reaching patients.
The path to mitigate this risk is a combination of specialized expertise, fit-for-purpose platforms, quality by design, and a focus on global advanced therapy access. It will take all these elements to create sustainable business models that enable developers, holding efficiency and quality above all else at a reduced cost within a tight timeframe to nurture innovation.
The future state of CGT within the CDMO space will be accessible, fast, and affordable. CDMO solutions need to be high value and economical to meet the growing demand for materials like viral vectors. This is the only way forward.
Anil Kane, Ph.D., Global Head of Technical & Scientific Affairs, Pharma Services, Thermo Fisher Scientific
The pharmaceutical industry faces several potential challenges, which could impact drug development timelines, revenue streams and overall market dynamics. For example:
- Throughout 2025, we’ve seen budget cuts impact the industry. This could lead to fewer new drugs entering clinical trials in early development, delays in clinical trials, or stalled entry to market.
- The expiration of patents on blockbuster drugs will lead to increased competition from generic and biosimilar manufacturers, potentially impacting the revenue of branded drug companies. This is especially true for biologics, which face slower but substantial erosion from biosimilars.
- Governments and insurers are increasingly focused on controlling drug prices, which could lead to pricing regulations that impact pharmaceutical company revenues.
- While the impact of trade wars on the pharmaceutical industry is complex, changes in regulatory landscapes — particularly regarding drug approvals and safety potential — or tariffs on medicines and raw materials could lead to price increases and shortages of generic drugs.
- Onshoring pressures for drug substances, drug products and clinical trials are likely to impact timelines of procurement, clinical trials, and getting molecules through clinical phases to commercialization — and to patients.
As CDMOs play an integral role in drug development, clinical trials and commercial manufacturing for all modalities — from small molecule to biologics, mRNA, cell and gene therapy, and viral vectors — ensuring flexibility in capacity and capabilities can help mitigate risk. Working with a global network and excellent track record like Thermo Fisher’s brings an additional layer of resilience in the face of industry-wide challenges. We are committed to working alongside our pharma and biotech sponsors, regardless of what challenges lie ahead, as they focus on bringing life-changing medications to the market as quickly and safely as possible.
Mike Kosko, Global Business Director, Grace Fine Chemicals Manufacturing Services
The looming threat of global supply chain uncertainty is likely to have a major impact on the CDMO industry. While sourcing critical raw materials for pharmaceuticals is always challenging, in today’s geopolitical climate, supply chain resilience is an increasing concern.
Partnering with a skilled CDMO can help mitigate supply chain risk and more. A CDMO can serve as simply a supplier of raw materials, but it also has the ability to build strategic relationships with vetted partners, share technology and information, and proactively seek alternate sources or new production methods when shortages emerge. CDMOs can help ensure a steady supply of materials, even when disruptions occur.
By investing in vertical integration for critical raw materials and intermediates, a CDMO can enhance supply chain security, provide direct oversight of quality, and reduce reliance on international sourcing — particularly important with potential legislation like the Biosecure Act, which could ban U.S. companies from working with certain foreign firms.
Key strategies to further resilience include maintaining safety stock, qualifying alternate suppliers, aligning forecasts with partners, and formalizing supply contracts. A reputable CDMO implements mitigation strategies that enable pharmaceutical companies to confidently navigate global uncertainties and maintain uninterrupted delivery of life-saving medications.
Saharsh Davuluri, Vice Chairman and Managing Director, Neuland Laboratories Limited
The key risk that we see at this point in time is the combination of geopolitical and economic volatility, especially the threat of a protectionist era in the global market leading to fragmentation. This could erode the CDMO industry’s value proposition, which leverages specialization and economies of scale by looking at expertise across the globe. Another potential fallout would be asset utilization at CDMOs and the hesitation to further invest because of the uncertainties. This could also lead to the rise of in-house manufacturing, especially at Big Pharma.
Apart from the obvious step of geographic diversification, CDMOs can try to mitigate the risk by clearly focusing on expertise and technologies which would ensure customers continue to stay and increase engagement. Becoming a more strategic partner beyond just being a service provider will also enable CDMOs to not just mitigate but also grow in spite of the risks.
Prasad Raje, Ph.D., Chief Executive Officer, LGM Pharma
The greatest challenge facing CDMOs in 2026 is the accelerating pace of change across regulatory policy, global trade, and emerging technologies. While not direct threats, these factors create an unpredictable environment that can disrupt long-term planning and disadvantage organizations that fail to adapt.
One area where this is especially evident is the growing complexity of global supply chains in the post-pandemic era. CDMOs must now operate in a sourcing environment marked by shifting lead times, unpredictable trade regulations, and rising geopolitical risks. Navigating these complexities calls for a more proactive approach that combines experienced sourcing teams with AI-based systems to manage disruptions and maintain supply continuity.
Rapid transformation across the industry favors CDMOs that are agile and forward-thinking. To remain competitive, organizations must embrace a culture of adaptability by investing in AI, automation, and flexible manufacturing infrastructure. With aging populations and rising global health needs, demand for pharmaceuticals will continue to grow. CDMOs that evolve alongside these shifts can mitigate risk while positioning themselves to capitalize on the next wave of innovation and funding.
Timothy Compton, Chief Strategy Officer, Alcami
While quality and compliance are longstanding considerations, they continue to be crucial in mitigating operational risks and ensuring timely approvals for commercial products. CDMOs may possess the necessary capacity, scale, and capabilities; however, without a proven track record in quality and compliance, both their programs and the CDMOs themselves are at risk of stagnation.
In the current landscape, maintaining stringent quality assurance processes and adhering to evolving regulatory standards are non-negotiable. This discipline not only safeguards product integrity but also fortifies the CDMO’s reputation and reliability. Additionally, the integration of advanced technologies and automation can enhance compliance monitoring, thereby reducing human error and increasing efficiency.
As the industry evolves, CDMOs must proactively address potential quality issues through comprehensive risk management strategies and continuous improvement initiatives. By doing so, they can mitigate operational disruptions, maintain customer trust, and uphold the rigorous standards required for successful product commercialization.
Tommy Duncan, Ph.D., Chief Business Officer, Touchlight
Continued political and economic volatility in 2026 and beyond, resulting in a sustained risk-averse investment environment, represents a threat to the CDMO industry and could result in market contraction.
In today’s market, the strategy of CDMOs positioning themselves as “one-stop shops” with extensive service portfolios has become a liability in some instances. Transitioning to a specialized model with clear differentiation from the competition could be a way to mitigate this risk. Creating a tailored infrastructure with industry-leading technologies for a specific modality, such as exclusively focusing on LVV or AAV vectors, can set up a CDMO to become the first choice for all clinical programs within the modality. Differences exist in the manufacturing and analytical testing required for each modality, and this focused approach would allow for operational excellence within a narrower field.
Bill Humphries, Chief Executive Officer, MedPharm
Biotech funding continues to be a significant challenge for all stakeholders and to me a significant risk to all involved with life sciences. The competitive landscape for CDMOs will intensify and to manage this risk, CDMOs will need to continue to demonstrate value-added services and the ability to be a seamless partner to life science companies, helping them do more with less and accelerate decision making and shorten timelines.
Yann D’Herve, Chief Executive Officer – CDMO, Cohance Lifesciences
The biggest threat to the CDMO industry is that pharma companies insource production. We are now seeing some large pharmaceutical companies begin to invest in API (drug substance) manufacturing capabilities in the U.S., which is a relatively new development. However, that insourcing is currently limited to the later stages of API production and still leaves room for CDMOs to produce starting materials and intermediates.
At the same time, much innovation, especially in advanced therapies, is being driven by biotech companies. Biotech companies typically outsource a higher percentage of their operations than do large pharmaceutical companies, so CDMOs focusing on the biotech customer segment, particularly for advanced therapies, is essential.
Andreas Raabe, Ph.D., Chief Executive Officer, Adragos Pharma
The greatest threat facing the CDMO industry in 2026 and beyond is the convergence of economic nationalism with persistent inflation. While potential tariffs create headlines, the real story is one of strategic realignment, not alarm.
For the astute CDMO, these pressures are a powerful catalyst, accelerating a “flight to quality.” Pharmaceutical clients are actively pivoting to “safe harbors,” prioritizing regulatory stability and supply chain security. Hence, CDMOs with a strong foothold in mature markets, such as Europe, Japan and North America, are best positioned for the future to navigate these risks. Facilities that have a strong focus on a culture of quality and operational excellence further improve risk resilience.
This shift also coincides with the coming wave of off-patent drugs. As major drugs lose their patent protection, the demand for dependable, high-volume production is set to grow.
Ultimately, the CDMOs best positioned to thrive are those fortified by an operational presence in stable geographies and an unwavering culture of quality. They are not merely mitigating risk; they are harnessing these global shifts to capture a predictable wave of growth.
John Lee, Global Head of Cell & Gene Therapy, SK pharmteco
The biggest threat to the CDMO industry in 2026 and beyond is the dual risk of biotech funding volatility and supply chain instability. A downturn in venture capital funding directly affects the project pipelines of small and mid-sized biotech companies, which are key clients for CDMOs. Meanwhile, geopolitical tensions and economic instability disrupt the global supply chain, threatening the flow of critical raw materials and equipment. To mitigate these risks, CDMOs should:
- Expand their client base by building relationships with bigger, more financially stable pharmaceutical companies.
- Focus on late-stage and commercial projects for more reliable revenue streams.
- Enhance supply chain resilience by diversifying the supplier base geographically and forming strategic partnerships.
- Invest in strategic technologies such as AI, automation, and end-to-end solutions to enhance operational efficiency and deliver a more indispensable service to clients.
Steven Facer, Senior Vice President, Global Sales and Marketing, Adare Pharma Solutions
One of the biggest threats facing the CDMO industry in 2026 and beyond is continued instability in global supply chains. The past several years have shown how pandemics, tariffs, inflation, and transportation bottlenecks can disrupt the flow of raw materials and finished goods. Such disruptions place enormous pressure on sponsors and outsourcing partners alike, often leading to project delays and increased costs.
To mitigate this risk, CDMOs must strengthen their infrastructure through regional diversification, integrated supply chain networks, and flexible operations that can pivot quickly in response to external changes. Building resilient supply chains with multiple sourcing options and localized manufacturing hubs will be essential to maintaining business continuity and safeguarding client programs.
Another looming challenge is the escalating complexity of the molecules and dosage forms entering development pipelines. More complex compounds demand advanced laboratories, specialized equipment, and deep formulation expertise. CDMOs that fail to invest in these capabilities risk being left behind as sponsors increasingly seek partners with the technology and flexibility to handle such projects.
At the same time, regulatory scrutiny is intensifying. Any lapse in compliance can quickly erode trust and damage long-term competitiveness. CDMOs will need to embrace robust, harmonized quality systems across their global networks and ensure that teams are continuously trained and aligned.
In 2026 and beyond, CDMOs that compete primarily on price will face margin pressure, while CDMOs that differentiate through innovation, a customer-based culture, and integrated end-to-end services will be better positioned. Ultimately, the strongest safeguard a CDMO has against industry threats is building long-term, trust-based partnerships that prioritize shared success.
Christian Seufert, Executive Committee Member and Head of Advanced Synthesis, Lonza
As CDMOs aim to meet the intensifying demand for complex modalities, such as HPAPIs, and adhere to accelerated timelines, they must be conscious of the risk of clinical failure due to improper molecule design or immunogenicity.
Efforts to mitigate the risk of clinical failure must start in preclinical development. One of the biggest challenges during this stage is choosing the right strategy and architecture to balance potency, safety, and manufacturability. Missteps at this stage can lead to suboptimal drug properties or costly delays later in development. To address these challenges, we work with drug developers in the earliest stages and offer tailored solutions for technology selection, development, and manufacturing of bioconjugates. Through our Synaffix® offering, we are bringing new technologies into the fold, including payload and site-specific linker technologies, specifically designed to support developers in early-phase development and beyond.
Furthermore, regardless of developmental stage, CDMOs must stay current on diverse and evolving regulatory requirements across local markets. Vigilant compliance with local and market-wide regulations can thus help CDMOs reduce the risks of potential delays and increased manufacturing costs.
Kayleigh Coxon, Business Analyst, Business Intelligence and Insights, FUJIFILM Biotechnologies
In 2026 and beyond, we may see a shift into overcapacity in mammalian DS manufacturing, which will open doors for diversification into high-growth areas like ADCs, bispecifics, and cell/gene therapies. With proprietary technologies and enhancing downstream processes and analytics, CDMOs such as FUJIFILM Biotechnologies can provide innovative value to their partners, along with manufacturing capacity.
In addition, policy and geopolitical uncertainties might influence outsourcing decisions, with a greater focus on dual sourcing. FUJIFILM Biotechnologies’ kojoX modular approach with cloned facilities in Denmark and the U.S. provides a benefit to its partners’ seeking a local-for-local supply model.
Overall, FUJIFILM Biotechnologies is ready to adapt to industry shifts and deliver innovative solutions that meet evolving market demands.
Michael Nonnenmacher, Ph.D., Director of Differentiating Technologies, Evonik
In 2026 and beyond, I think that the CDMO industry could face several significant challenges. These stem from the increasing vulnerability of the global healthcare supply chain. Geopolitical tensions, trade disputes, and regional instability will continue to pose risks to the timely and cost-effective delivery of APIs and intermediates. These disruptions can lead to delays, increased operational costs, and uncertainty for pharmaceutical companies relying on complex, interconnected supply networks.
To mitigate these risks, CDMOs are placing greater emphasis on supply chain diversification, localized production, and robust risk management strategies. Strategic partnerships and cost optimization initiatives are also becoming essential to maintain competitiveness and ensure continuity of supply.
CDMOs with a resilient and geographically diverse manufacturing footprint are better equipped to navigate uncertainty. Evonik has a global network of facilities in Europe and North America, which enable dual sourcing strategies, while localized capabilities help reduce dependency on single regions and enhance overall supply security.
By proactively addressing these challenges — both operational and strategic — CDMOs can continue to reinforce their role as a trusted partner in the pharmaceutical sector, committed to long-term collaboration and supply chain resilience.
Franco Negron, Chief Executive Officer, Simtra BioPharma Solutions
The CDMO industry faces several critical threats heading into 2026 and beyond:
- Regulatory Complexity: Evolving standards — especially for advanced therapies — require deep expertise and constant adaptation to avoid delays and compliance risks.
- Talent Shortages: Having enough people to meet operational demands in a fast-growing industry
- Geopolitical Uncertainty: Trade tensions, regional conflicts, and shifting policies can impact cross-border operations, sourcing, and investment decisions.
To mitigate these risks, CDMOs must invest in:
- Regulatory agility, supported by strong internal expertise and digital compliance tools.
- Workforce development, through training, partnerships with academic institutions, and competitive retention strategies.
- Geopolitical risk planning, with flexible global footprints and scenario-based contingency models.
Matthew Bio, Ph.D., Chief Scientific Officer, Cambrex
A significant threat to the CDMO industry in 2026 and beyond is a sustained reduction in drug development investment. If funding from private and public sources remains tight or tightens further, fewer new molecules will enter clinical trials, reducing the pipeline that ultimately feeds CDMO manufacturing demand. This dynamic could leave the industry with an oversupply of capacity and pressure on margins. While other risks, such as regulatory tightening and geopolitical supply chain disruptions, are significant, a contraction in innovation funding would have the broadest and most systemic impact on CDMOs.
To mitigate this risk, CDMOs need to ensure their manufacturing assets are flexible and cross-modality, rather than tied too narrowly to a single therapeutic class. Investments in technologies, such as liquid-phase peptide and oligonucleotide synthesis (LPPS/LPOS), illustrate how existing small molecule infrastructure can be repurposed for “tides” manufacturing, especially when paired with broadly applicable purification platforms like chromatography and nanofiltration. More broadly, designing facilities and processes for fungibility allows CDMOs to pivot capacity in response to shifts in pipeline composition, ensuring utilization even if demand in one modality slows. This adaptability will be critical to weathering fluctuations in global R&D investment.
Russell Miller, Vice President of Global Sales & Marketing, Enzene
If you look at the last 18 months, I believe it is uncertainty that has caused the most consternation amongst investors, and especially economic uncertainty. There are investors out there, but the risks presented by economic uncertainty are making them wary of investing, and instead they are putting more effort into risk analysis and mitigation. Consequently, that often results in conservate decisions. CDMOs have little control over how this instability impacts investors, so it’s important for CDMOs to get the basics right, and that means nurturing their funnels carefully, and focussing, as ever, on operational excellence.
