The state’s contract service providers, or CSPs, to the pharmaceutical industry, continued to grow over the last year but face increasing challenges, according to a new report by Indianapolis-based life sciences trade group BioCrossroads.

Indiana is one of only a few states with a concentration of companies that provide specialized and sophisticated drug-development services such as contract research, contract manufacturing and logistical services.  

Johnson

Pharmaceutical companies, including Indianapolis-based Eli Lilly and Co., have in recent years increasingly turned to CSPs as a way to reduce their own costs.

BioCrossroads has identified about 40 companies in the CSP sector here, employing more than 8,000 people.

“While pressure for outsourcing continues to increase, uncertainty over health care reform and tighter spending controls have created significant headwinds for a sector that had been growing revenues consistently in the double digits,” the BioCrossroads report said.

CSPs stand to get increasing business in areas such as the development of biomarkers to identify biological targets toward the development of more precise drug therapies.

Local successes last year include Indianapolis-based AIT Laboratories’ creation of a contract research division, AIT BioScience, and similar growth in manufacturing and research by Greenwood-based Elona Biotechnology.

“We believe the outlook for the biopharma-contract-service sector continues to be positive, particularly for Indiana’s pharmaceutical development and contract manufacturing companies,” said David Johnson, BioCrossroads’ CEO.