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Market Update | European Pharmaceutical Manufacturing

As the summer holidays draw to a close, Allerton Bishop has been meeting and interviewing industry leaders to get a current view of market trends and expected investment decisions ahead of a busy Q4.

Four factors continue to influence manufacturing decisions:

Political environment | Cost | Talent | Commercial advantage

European pharmaceutical manufacturing isn't simply growing or declining. It is becoming more specialised.

1. Europe can't compete on cost alone

Asia continues to exert significant pressure across APIs, intermediates and high-volume small molecules. Supply-chain resilience and geopolitical risk have strengthened the case for European manufacturing — but not necessarily at any cost.

From our conversations, there is exceptional and currently under-utilised pharmaceutical talent across Europe. Can mature markets such as the UK and Germany combine this expertise with the right political and commercial environment to become more attractive destinations for future investment?

Private equity-backed CDMOs certainly appear to think so, with continued investment in European manufacturing capacity, specialist capabilities and consolidation as they position themselves to capture future outsourced volumes and market share.

2. Big Pharma is redefining its manufacturing strategy

Owning every manufacturing capability internally is increasingly difficult to justify.

Across established small-molecule and sterile portfolios, sophisticated CDMOs provide an attractive alternative, allowing Big Pharma to access specialist capability without significant upfront capital investment.

Meanwhile, internal investment is increasingly focused on strategically important, high-value assets — particularly within biopharma — where retaining process knowledge, expertise and security of supply can provide a significant commercial advantage.

Private equity investment has also accelerated the development of specialist CDMO platforms, with strong OSD, API and sterile fill-finish propositions competing for outsourced manufacturing.

3. Where is the next generation of talent?

Where will the next generation of manufacturing leaders develop?

Historically, major pharmaceutical companies operated elite graduate and leadership development programmes that became a recognised training ground for the industry. Some CDMOs developed similar programmes (Catalent Gold Programme) but consolidation and restructuring across the sector are changing this talent pipeline.

Interim and fractional leadership can bridge immediate capability gaps — but it isn't a long-term solution to developing the industry's future leaders.

What does this mean for Europe right now?

The manufacturing map is changing.

Cost matters, but so do political support, infrastructure, specialist clusters and — critically — access to experienced people.

Investment can also mean attracting talent into locations without established pharmaceutical manufacturing populations. Allerton Bishop has delivered both interim and permanent solutions in challenging locations, where success requires an established network and knowing which candidates are genuinely prepared to relocate.

Efficient | Valuable | Modern

The most forward-thinking organisations are adopting more flexible workforce models and combining internal talent acquisition with specialist external search.

In 2026, 90% of Allerton Bishop's search engagements have been confidential appointments, many involving business-critical leadership change.

For companies considering investment, expansion, outsourcing or changes to their manufacturing network, understanding the available talent should be part of the decision-making process from the beginning.