Home » 2025 Global Drug Delivery System Trends Report » DDS Supply Chain Evolution and CDMO Integration Strategies
DDS Supply Chain Evolution and CDMO Integration Strategies
Chapter of the 2025 Global Drug Delivery System Trends Report
8 minute read
Pressures to reduce manufacturing costs, accelerate time-to-market, and improve productivity are reshaping the drug delivery system (DDS) value chain. Pharmaceutical companies are increasingly relying on device and drug product contract development and manufacturing organizations (CDMOs) not only to fill capability gaps but also to provide end-to-end solutions that span the entire drug–device continuum. CDMOs are pursuing upstream and downstream integration in response, positioning themselves as strategic partners that enable efficiency, innovation, and competitive differentiation.
This article explores how pressures to cut costs, speed up launches, and boost efficiency are driving pharma to rely on integrated CDMOs. It also discusses how these partners are expanding upstream and downstream to deliver end-to-end drug–device solutions and strengthen supply chain resilience.
Outsourcing Models Across Pharma Segments for DDS
Device and drug product CDMOs play a critical role in supporting pharmaceutical companies, particularly as the DDS market becomes more complex and innovation-driven. But outsourcing strategies differ significantly depending on company size and internal capabilities.
Large and mid-size pharma
These companies typically maintain broad in-house capabilities across the drug-device value chain. However, they are increasingly looking for end-to-end solutions that minimize stakeholder management and streamline collaboration. They seek single partners, rather than coordinating multiple vendors, who can address specific capability gaps, such as electronics integration, device design, or digital enablement, while ensuring seamless alignment with internal operations. These partners also need to provide flexible production capacity, ranging from small-scale batches for niche or personalized therapies to large-scale commercial volumes, depending on the therapy area and commercialization strategy. Importantly, large and mid-sized pharma are increasingly willing to pay a premium for integrated CDMO solutions that enhance agility, reduce legacy inefficiencies, and strengthen competitive positioning.
Small pharma and biotech
Smaller companies typically lack in-house capabilities across the full drug-device development continuum and therefore need fully integrated CDMO support. They look for providers with ready-to-deploy capabilities that can accelerate time to market, reduce development and COGS, and enable scalability from early clinical supply to large-scale commercialization. Devices are not a marginal cost for these players but a critical driver of differentiation and market access. They rely on CDMOs for regulatory expertise, risk management, and the ability to scale production seamlessly as programs advance.
Mid-sized pharma companies are increasingly seeking end-to-end partners that can complement their in-house capabilities with regulatory support, final assembly, labeling, and packaging. In contrast, smaller and niche players outsource nearly everything and depending on external expertise for regulatory and production scaling.
Markus Puusepp, Chief Growth Officer
The scope of integration differs between these groups, although both are turning to CDMOs for strategic support. Large and mid-sized pharma companies generally target specific gaps and value optionality, whereas small pharma and biotech companies need comprehensive, holistic partnerships that cover the entire development and commercialization lifecycle.
Expanding Upstream and Downstream Integration
Device and drug product CDMOs are no longer viewed only as execution partners, but as outsourcing models evolve, they are seen as strategic enablers of time-to-market, cost efficiency, and innovation. These CDMOs increasingly pursue upstream and downstream integration to meet diverse customer needs and sustain competitiveness, effectively extending their role across the entire drug–device value chain. These players are positioning themselves as true end-to-end service providers by moving beyond their traditional core of manufacturing. This strategic shift enables earlier engagement in the product lifecycle, tighter control of supply chains, and greater operational efficiency. It allows these CDMOs to capture more value and become indispensable partners to pharmaceutical clients.
Key strategic approaches include:
- Upstream integration of customized designing and manufacturing services
- Downstream integration to expansion into drug product capabilities
- Integration of connectivity
- Acquisitions and strategic partnerships with pharma and biotech
Upstream integration of customized designing and manufacturing services
Device and drug product CDMOs are accelerating upstream investments in vertical integration, including proprietary cell line development, media optimization, and standardized process platforms. They are embedding tailored design and manufacturing services in parallel, such as custom-built machinery, software, assembly and test benches. They are also deploying advanced digital tools, including AI-powered quality control systems, manufacturing execution systems, electronic batch records, and real-time release testing. Together, these capabilities enable earlier engagement with pharmaceutical clients, unlock large-scale manufacturing opportunities, and streamline supply chains for greater efficiency.
Example: Sanner Group’s acquisition of Gilero LLC expands its global medical device offering, strengthening design, development, and contract manufacturing capabilities, while adding global-scale injection molding and growing its presence across the US, Mexico, and Ireland.
The industry’s shift toward upstream and downstream integration underscores the need for partners who can seamlessly unite design, development, and manufacturing. We see how this evolution is driving a focus on more sustainable approaches that connect precision engineering with global manufacturing expertise to enhance combination product development.
Ted Mosler, President
Downstream integration to expansion into drug product capabilities
Device-focused CDMOs are expanding downstream by acquiring drug product specialists, moving beyond mechanical device manufacturing to offer a broader set of development and production capabilities. This integration is particularly relevant in specialty areas such as oral formulations and highly potent compounds, which are increasingly critical in oncology and rare disease markets.
Example: Terumo’s acquisition of WuXi Biologics’ drug product facility in Leverkusen, Germany, will mark its first CDMO site outside Japan, expanding regional fill–finish capabilities for vials and prefilled syringes and strengthening its position as an integrated CDMO offering end-to-end drug–device solutions.
The acquisition of the drug product plant in Leverkusen is a pivotal step in enhancing the competitiveness of our CDMO business.
Hikaru Samejima, Chief Executive Officer
Integration of connectivity
Device and drug product CDMOs are integrating digital health capabilities into their portfolios to remain competitive in a connected care ecosystem. This includes investments in electronics, software, cloud architecture, and data analytics to support connected drug delivery devices.
Example: Portal Instruments is collaborating with pharmaceutical partners to deploy PRIME NEXUS™, a reusable and connected injection platform that integrates electromechanical precision, AI-driven engagement, and real-time data capture. The system enables closed-loop feedback and reduces waste compared to single-use devices, positioning Portal as a key partner for companies seeking scalable, sustainable, and digitally enabled drug delivery solutions.
The real value is not just in the device, it’s in the data. By capturing usage and outcome data at the point of care, we can transform treatment, reimbursement, and adherence all at once.
Patrick Anquetil, CEO
Acquisitions and strategic partnerships with pharma and biotech
Device and drug product CDMO players are also advancing integration through direct partnerships with pharmaceutical and biotechnology companies to co-develop innovative treatments, including gene and cell therapies, supported by specialized delivery platforms.
Example: Stevanato Group partnered with Thermo Fisher Scientific to develop a fully integrated on-body delivery system for subcutaneous administration.
Supply chain integration has become critical. It started during COVID, when security of supply was a major concern, and as geopolitics evolve, robustness and security in supply chains are no longer optional but essential.
Adam Stops, Head of Drug Delivery Systems
