Drug products used for clinical trials are referred to in Europe as investigatory medicinal products (IMPs) and are controlled by legislation requiring their manufacture in facilities that pass inspection by the appropriate regulators. The US FDA regulates the manufacture of drugs for clinical trials in their document entitled: Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients (ICH Topic Q7A) and requires that manufacturing companies have CGMP to produce active pharmaceutical ingredients (APIs). Such controls are necessary to ensure the same level of purity of drugs as is found when they are manufactured for widespread marketing, thus protecting the test subjects participating in clinical trials.
As a result, manufacturing facilities with CGMP are increasingly in demand. Small biotech startups with new discoveries entering clinical trials will likely not have the facilities money or time to produce APIs that comply with regulations for their trials. Thus, the CSO market is booming as contract manufacturing organizations (CMOs) obtain the credentials to fulfill this need.