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Demand For cGMP Manufacturing Space Grows

Even as the demand for 3rd party logistics firms grows in the areas of general warehousing and distribution, the need for cGMP facilities is reaching critical mass.

New and novel drugs meant to battle diseases at the genetic level are being created at an unprecedented rate, as are other more traditional drug therapies. A lack of space can cause significant bottlenecks for hospitals and pharmacies.

Multiple Factors Driving cGMP Compliant Fulfillment Shortage

In many areas, FDA cGMP-compliant space is already at a premium because of the many requirements to pass the FDA inspections.

Even distribution centers have to meet very rigorous standards in order to be certified cGMP-compliant. Jumping through hoops isn’t new for industries related to the medical field, but when it comes to cGMP, the problem becomes even greater.

First, the company doing the drug and supplement fulfillment has to find a space large enough to house their various wares, or those of clients in the case of 3PLs. If that space happens to be a rented or leased building rather than one that’s outright purchased, landlords may not be willing to retrofit the space with all the equipment required to pass cGMP inspections.

That’s when the company has to make a choice: spend the money to fit specialized equipment into a rented space or buy something significantly smaller so they can make the changes they need to make and worry about expansion later. Neither is a good option, not really, because in one they’re at the whim of a landlord that could sell the building tomorrow and in the other they’re subject to the confines of a building that may be far from ideal.

Add this to the growing demand and shrinking supply of specialized industrial space and you get the situation that’s currently plaguing the cGMP manufacturing and fulfillment industry.

The Forecast is Cloudy

Recently, GlobeSt.com interviewed CBRE Senior VP Doug Lozier on the subject of cGMP-compliant spaces and their outlook.

He explained the ins and outs of the situation in both the San Diego area and nationally, since the shortage of this type of industrial space isn’t limited to California by any stretch of the imagination. When asked about the outlook for the next three years, he painted a gloomy picture.

“We are in the second inning of a nine-inning ball game,” Lozier explained. “In this new class of gene therapy drugs, there is so much happening with that science, and we are seeing more and more of these drugs hitting the market or getting into clinical trials. So, I really see a shortage of cGMP manufacturing space in the near and mid term and possibly in the long term. We are just beginning.”

Even if you only need a supplement fulfillment distribution center, this should be a wake-up call. You’re competing with the drugs that are driving a space shortage for a limited amount of 3PL square footage. Keep an ear to the ground, in case your company is just as pressured as drug manufacturers.

October 24, 2018
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