A Primer on Sourcing CROs and CDMOs in the Life Sciences Industry

The Role of CROs and CDMOs

In the life sciences industry, specialized external partners are essential for advancing therapies from discovery to market. Two of the most critical types of partners are Contract Research Organizations (CROs) and Contract Development and Manufacturing Organizations (CDMOs).

CROs primarily support early-stage research and clinical development. Their services include trial planning, regulatory affairs, clinical site selection, patient recruitment, monitoring, data management, biostatistics, medical writing, and overall project coordination. In short, CROs are experts in managing the complexity of clinical trials.

CDMOs, by contrast, focus more on later stages of development and manufacturing. They offer integrated services that cover formulation, analytical testing, clinical trial supply, commercial production, regulatory support, quality assurance, packaging, and logistics. Unlike traditional Contract Manufacturing Organizations (CMOs), which only handle manufacturing, modern CDMOs often combine both development and production capabilities under one roof.

The move toward integrated CRO/CDMO models helps reduce risks associated with transferring technologies between separate vendors and speeds up time-to-market. Choosing the right CDMO is essential to streamline operations, manage regulatory compliance, and reduce development risk across the product lifecycle.

Choosing the Right Partner: Effects on Timelines, Costs, Quality, and Regulatory Outcomes

Selecting a vendor or service provider isn’t just about procurement—it’s a strategic decision that directly affects project outcomes. The right partner can accelerate timelines, maintain high quality, control costs, and support regulatory success. On the other hand, poor vendor alignment can result in serious setbacks. Common issues include missed deadlines, budget overruns, quality failures, and regulatory non-compliance. Many of these problems stem from poor internal preparation or selecting vendors whose capabilities don’t fully align with project needs.

According to the Annual Outsourcing Survey by Contract Pharma, nearly half of biopharma companies have faced vendor-related quality problems, from unmet regulatory expectations to overpromising and underdelivering. In complex areas like Cell and Gene Therapy (CGT), replacing a CDMO mid-project can be costly and highly disruptive. That’s why careful vetting for experience, systems, capacity, and cultural fit is vital from the outset.

The Increasing Role of Outsourcing in Biotech and Pharma

Biotech and pharma companies are outsourcing more than ever. This shift is driven by the need for specialized expertise, cost management, faster development timelines, and the ability to meet growing regulatory demands. Outsourcing allows companies to focus on core areas like discovery and commercialization while relying on partners for development and manufacturing. The demand is supported by hard numbers: nearly 90% of biotech firms outsource manufacturing [source: BioPlan Report and Survey 2022], and the market for outsourced services continues to grow. The pharmaceutical outsourcing market is expected to reach $121.3 billion by 2034, while the CRO sector alone is forecasted to hit $127.3 billion by 2028.

This increased reliance is transforming service providers like CROs and CDMOs from transactional vendors into strategic partners. They’re now involved in collaborative planning, risk sharing, and problem solving. Selecting the right partner therefore requires a more comprehensive evaluation—one that looks beyond price and turnaround time to assess long-term fit, communication, and shared values.

Additionally, the outsourcing market is tightly linked to biotech funding. Emerging companies depend heavily on external investment. When funding slows, project timelines may shift or be paused, which in turn affects demand for services. This funding dynamic introduces another layer of complexity that life science companies must consider when building and managing vendor partnerships.

Phase 1: Defining Needs and Identifying Potential Partners

Step 1: Internal Assessment: Understanding Scope, Scale, Timelines, and Technical Requirements

A successful vendor selection process begins with a thorough internal assessment, well before reaching out to any external partners. This step is essential for clearly defining the project’s scope, objectives, and constraints. Start by outlining your overall project goals and the specific services you require (e.g., preclinical toxicology, Phase II clinical trial management, cGMP manufacturing, analytical method development). Identify technical specifications such as material quantities needed, factoring in patient population, dosing schedules, and quantities required for release and stability testing.

Establish realistic timelines, including target start and end dates, and identify key path activities that could impact progress. Budget limitations should also be defined early on. Consider any unique technical requirements tied to the drug candidate or therapeutic area. These may include specialized assays, formulation challenges (such as poorly soluble compounds), handling of highly potent APIs, or modality-specific needs like expertise in cell or gene therapies.

This internal clarity serves two purposes: First, it helps determine whether outsourcing is the right approach. In some cases, if the technology is highly specialized or core competencies are internal, a hybrid approach (e.g., internal manufacturing with outsourced testing) may be more appropriate. Second, a well-defined internal brief provides a solid basis for screening the best external partners.

Without this clarity, CROs or CDMOs may struggle to assess the opportunity accurately, leading to misaligned capabilities, vague proposals, or costly project missteps. Establishing internal acceptance criteria upfront also enables more objective comparisons during the evaluation phase.

Step 2: Surveying the Vendor Landscape: Using Professional Resources

Once your project requirements are defined, the next step is identifying potential CRO or CDMO partners. Rather than relying solely on broad online searches, it's best to use industry-specific sources.

Industry Media, Associations, and Conferences. Respected industry platforms like Contract Pharma, Outsourced Pharma, Fierce Biotech, and CPHI Online regularly publish updates, company insights, and expert commentary on the CRO/CDMO market. Professional organizations such as the Biotechnology Innovation Organization (BIO), the Pharmaceutical Research and Manufacturers of America (PhRMA), and the Parenteral Drug Association (PDA) also offer valuable resources, guidance, and events. Attending major conferences like the BIO International Convention or CPHI events provides a chance to meet vendors in person, gather insights, and build relationships.

Specialized Free Directories and Databases: Dedicated life science directories and databases offer searchable listings of CROs and CDMOs, often with filters for capabilities, geography, and therapeutic expertise. These tools streamline the initial identification process and can be a valuable starting point. Table 1 provides a selection of such free resources.

Note: This table is illustrative and not exhaustive. Availability and features of directories may change.

While free directories are a useful starting point, more in-depth databases provide extensive, high-value intelligence that goes far beyond basic listings. These platforms often require a subscription but deliver deep insights into drug development pipelines, regulatory pathways, company financials, and clinical trial data.

Step 3: Initial Screening – Applying High-Level Filters

With internal needs defined and a preliminary list of potential partners in hand, the next step is to apply strategic filters to narrow down the field. This early screening phase is intended to eliminate unsuitable vendors and create a focused shortlist for more in-depth evaluation. Here are several key filters to apply during the initial screening process:

Core Service Offering. Confirm that each vendor offers the specific service(s) your project requires—whether that’s cGMP biologics manufacturing, Phase III clinical trial management, or sterile fill-finish capabilities. Vendors who focus on unrelated service areas can be quickly excluded, streamlining the process and avoiding misaligned discussions.

Geographic Location. While global sourcing is increasingly common, location still matters. Consider regulatory alignment (e.g., FDA vs. EMA experience), the cost and complexity of logistics (especially for temperature-sensitive or time-critical materials), geopolitical risks, and the feasibility of conducting audits or maintaining close collaboration. For example, vendors based in the Asia-Pacific region may offer attractive pricing but require a more thorough evaluation of potential trade-offs in oversight, time zone coordination, and regulatory compatibility.

Scale and Capacity. Assess whether the vendor’s operational scale matches the scope of your project. A vendor that excels in early-phase development may lack the infrastructure for commercial-scale production, while a commercial-scale CDMO may not be agile or cost-effective for small preclinical runs. Consider facility size, batch capacity, and publicly stated expansion plans or bottlenecks that may affect timelines.

Technology Focus. Evaluate whether the vendor has demonstrable expertise in your drug’s modality or technological requirements. For example, a program focused on monoclonal antibodies or cell therapies should be paired with vendors experienced in handling biologics or advanced therapies, including the relevant analytical and manufacturing technologies (e.g., aseptic techniques, high-containment operations, or cell expansion platforms). These high-level filters can be applied through a combination of online research, directory reviews, and brief initial outreach (e.g., capability questionnaires or short calls). By narrowing the list early, your team can focus efforts and resources on the most relevant and qualified candidates for subsequent steps, including detailed due diligence, proposal requests, and site assessments.

Phase 2: Establishing Comprehensive Qualification Criteria

After narrowing down potential vendors, the next step is to conduct a deeper evaluation using clearly defined qualification criteria. These criteria should go beyond technical capabilities to assess overall suitability as a long-term partner, considering factors such as quality systems, regulatory history, scalability, financial health, and communication style. Sponsors should apply these criteria through a phase-appropriate lens—prioritizing speed and flexibility in early stages, while emphasizing compliance, scalability, and documentation in later phases. Table 2 provides a detailed list of criteria and evaluation prompts:

Note: This checklist is illustrative. Specific criteria and weighting must be tailored to each project.

Phase 3: Executing Rigorous Due Diligence

With a shortlist of promising vendors in place, the next step is executing rigorous due diligence. This process verifies vendor claims, assesses capabilities in detail, and identifies potential risks before making a final commitment. It's a key safeguard to ensure alignment and minimize surprises downstream.

Narrowing the Pool: RFI and Questionnaires

The process often begins with issuing a Request for Information (RFI) or targeted questionnaires to gather standardized data tied to pre-established criteria. Focusing on critical project-specific factors—like facility location, essential expertise, and regulatory standing—can help streamline assessment. While valuable, self-reported data should always be validated through subsequent steps.

Deep Dive: Request for Proposal (RFP)

Next, a formal RFP is shared with top candidates. This document defines the scope, deliverables, and evaluation criteria, enabling vendors to submit detailed proposals. Responses should be scored systematically to evaluate more than just cost, considering timelines, risk mitigation, technical approach, and team expertise.

Verification: On-Site Audits

On-site audits provide crucial visibility into the vendor’s actual capabilities. These visits assess both operational readiness and quality systems, helping validate earlier claims. Audits should be well-planned and include cross-functional representation from the sponsor’s side. Any hesitance from the vendor to support a full audit should raise concerns.

Validation: Reference Checks

Reference checks add another layer of validation, offering firsthand insights into vendor performance. Ideally, references should include organizations with similar projects. Interviews should probe into delivery quality, project management, communication, and cultural alignment. Consistent themes—positive or negative—can be strong indicators of future performance.

(Table 3 provides a list of evaluation questions.)

Note: Questions should be open-ended and tailored to the specific vendor and project context.

The Final Decision: Synthesizing Data and Assessing Cultural Alignment

The final stage brings together all insights from RFIs, RFPs, audits, and reference checks, evaluated against the previously established qualification criteria. Any unresolved concerns—technical, quality-related, or financial—must be flagged as potential deal-breakers.

Equally important is cultural alignment. Strategic partnerships thrive on shared values, strong communication, and collaborative problem-solving. Sponsors should assess whether the vendor can function as a true partner rather than a transactional provider. Observations from site visits, reference feedback, and informal interactions often reveal whether the partnership is likely to succeed long term.

The due diligence process is designed as a layered, cross-validating approach—each step strengthening the reliability of the final decision and reducing risk in vendor selection.

Optimizing Sourcing CROs and CDMOs

Selecting the right service provider, CRO, or CDMO, is a multi-phase process that requires strategic planning, thorough evaluation, and cross-functional alignment. While due diligence and final selection ultimately rest with the sponsor, the earlier stages, especially sourcing CROs and CDMOs aligned with specific project needs, can be time-consuming and complex. This is where Outbound Pharma can help.

Through our free Vendor Selecting Service, we support biotech and pharma companies during Phase 2, using your specific project criteria to research, vet, and shortlist qualified vendors—saving you time, reducing internal workload, and ensuring your next step begins with the right options.

No fees, no obligations — just value.

If you’re facing tight timelines or want a clearer view of your outsourcing landscape, let’s connect and see how we can assist.

Contact Outbound Pharma