While large-molecule therapeutics capture most headlines, small-molecule drugs face significant challenges, struggling with funding cuts, supply chain disruptions, and growing demand. At the same time, the small molecule market is projected to grow significantly over the next decade, fueled by a renewed focus on patient-centric drug discovery and innovation in areas like oncology, cardiology, and neurology.
The small molecule drug discovery market is on track to grow to $106 billion by 2031, up from $57.41 billion in 2023. This growth highlights the critical need for small-molecule-focused contract development and manufacturing organizations (CDMOs) to strategically navigate a rapidly evolving landscape so they can continue developing the medications many patients require to live healthy, fulfilling lives.
Pharmaceutical fallout: Shortage of essential drugs
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The United States is experiencing an unparalleled drug shortage, with more than 250 essential medications — including small-molecule drugs like Penicillin, Adderall, and Methotrexate — in short supply, and over half of those since October 2022. The demand for chronic condition treatments, including those targeting an aging population, continues to rise, yet the resources allocated to small-molecule development have dwindled.
Recent legislative shifts, such as the Inflation Reduction Act (IRA), have compounded these issues. The IRA has inadvertently penalized small-molecule manufacturers by reducing certain incentives and making production less profitable. While large-molecule drugs, such as those targeting diabetes and obesity, continue to attract investment, small molecules have seen a sharp decline in funding. This leaves drug developers and their partner contract development and manufacturing organizations (CDMOs) scrambling to adapt.
The role of small-molecule CDMOs
In the face of these challenges, small-molecule-focused CDMOs must adapt quickly to the changing landscape by embracing innovation, streamlining operations, and ensuring flexibility and scalability in their production processes. In particular, smaller, more agile CDMOs hold a strategic advantage in meeting this demand through a high-science, high-touch (HSHT) approach — a strategic model that balances scientific rigor with the personalized, adaptable, and scalable customer service needed to navigate industry pressures.
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By improving manufacturing techniques and integrating advanced technologies, small-molecule CDMOs can mitigate an uncertain funding environment, regulatory shifts, and the current drug shortages – while maintaining quality and ensuring speed to market for their developer partners. At the heart of this strategy is the focus on delivering customized solutions that address specific client needs, from complex drug formulations to streamlined production processes. This approach requires advanced technology, personalization, and investing in talent.
Innovating to improve the patient experience through personalization
For many patients, small-molecule drugs are a lifeline, and maintaining a healthy early-phase and pre-clinical development pipeline is essential, especially as the population ages and the prevalence of chronic conditions and cancer continue to rise. In 2023 alone, there were nearly two million new cancer cases in America. CDMOs are pivotal in ensuring that these drugs are available and optimized for patient use, offering faster-acting, more effective treatments. Further, new, previously “undruggable” molecules can now make it through the development cycle and land in clinics and pharmacies with the right strategy and technology in place. Technological improvements in molecule solubility and bioavailability enhancements enable CDMOs and their developer partners to unlock new potential medications, making treatments easier to absorb and more accessible to a broader patient base.
One key area of innovation is the development of more personalized and patient-friendly formulations, such as IV-to-oral drug conversions or formulation technology to reduce pill burden. CDMOs can help pharmaceutical developers provide more convenient, effective treatments by making medications easier to administer and reducing the pill burden. While patient-centric innovations are essential, they must be framed as part of a broader strategy for differentiation. By focusing on creating faster-acting, more effective treatments that cater to evolving patient demands, CDMOs can strengthen their market position and long-term viability.
Navigating legislative and economic pressures
While innovation and patient-centric solutions are essential, CDMOs must contend with the broader legislative and economic pressures reshaping the pharmaceutical industry. The IRA’s impact on small molecule research and manufacturing has left many CDMOs vulnerable. Supply chain disruptions and rising regulatory demands have further complicated operations, making it essential for CDMOs to adopt agile strategies to navigate difficult, and unpredictable economic, and regulatory influences.
By optimizing processes and integrating advanced technologies, CDMOs can offset rising production costs and navigate the challenges posed by regulatory changes. Sustainability initiatives, such as reducing solvent use in manufacturing, offer an additional avenue for improving cost-efficiency while meeting environmental goals, a critical factor in future-proofing operations against shifting industry demands.
The outlook for small molecule pharma
As the pharmaceutical landscape evolves, small-molecule CDMOs will be essential in balancing supply and demand, driving innovation, and improving patient outcomes. They must continue embracing innovation and strategic agility to survive and thrive in this complex environment. The key to overcoming drug shortages lies in scientific excellence and operational flexibility. By investing in advanced manufacturing technologies, leading with a high-touch, high-science approach, optimizing processes, and improving the patient experience, CDMOs can ensure that critical small-molecule drugs not only remain available, but new, more complex molecules are developed into new, life-changing medications.