The Matryoshka Model: The New Face Of Contract Packaging In Pharma
By Bernardo Estupiñán, Drug Biologics Consulting
At first glance, the pharmaceutical supply chain can seem like a finished product with its sleek packaging, regulatory seals, and a finality that implies certainty. But just like a Matryoshka, the iconic Russian nesting doll, what you see on the outside belies the intricate structure within. Chairing the Contract Packaging Organization (CPO) and Contract Development and Manufacturing Organization (CDMO) track at Pharmapack 2025 only deepened this metaphor for me. The conference reaffirmed that to truly understand our industry’s transformation, we must unpack the layers — component by component — and examine how innovation is fundamentally reshaping how products reach the market.
A New Era Of Convergence
Over the past two decades, the services sector in pharma has undergone a dramatic change. We’ve moved from fragmented, stand-alone contract service providers to fully integrated service ecosystems. Today, acronyms such as CRO, CMO, CDMO, and the increasingly complex C(x)DMO dominate our conversations, with each signifying a node in a tightly connected web. Among these, CPOs are emerging as pivotal actors. Too often overlooked, they are the final piece of the product that reaches clinicians and patients.
In many ways, CPOs are the outer layer of the pharmaceutical Matryoshka — the final form that contains within it a series of intricately crafted parts: the drug substance, vial, syringe, insert, box, and label. Products like Cimerli and Byooviz, biosimilar versions of ranibizumab, are emblematic of this concept. Though similar on the outside, each is a product of numerous intersecting supply chains and innovations.
C(x)DMO And CPO: A Symbiotic Relationship
The alignment between C(x)DMOs and CPOs is no longer optional — it’s essential. These service providers must operate not only in parallel but in harmony. If development delays occur upstream, they cascade into packaging timelines downstream, creating cost overruns and product launch delays. This has pushed many sponsors to ask: Should we pursue vertical integration? Can a one-stop CDMO-CPO solution accelerate our speed to market?
The answer is nuanced. While vertical integration can optimize coordination, it often comes with fine print — assumptions that must be met, timelines that are conditional. A better approach may be strategic alignment over structural consolidation, where independent but well-coordinated partners work in lockstep, bound by shared timelines and transparency.
Digital Labelling, Data, And The New Frontiers Of Compliance
As we move further into the digital age, labeling innovation is reshaping how we ensure product traceability and compliance. Unlike printed labels, which are prone to adhesion failures and limited in data, digital labeling offers a dynamic, data-rich interface that benefits end users. Doctors and clinics can verify product authenticity in real time, while regulators gain access to more comprehensive audit trails.
This digital evolution brings forward one critical theme: traceability must begin at the very start of the product journey. At CPHI Milan, a question posed to a speaker — "At what point should we worry about trackability?" — was met with the only viable answer: ASAP. Knowing where a component comes from and where it's going isn't just operationally helpful; it’s an ethical and regulatory imperative.
Cost, Scale, And The Orphan Drug Conundrum
Cost remains a constant friction point. Small batch manufacturing, particularly for orphan drugs and rare diseases, presents the challenge of high unit costs. Sponsors want speed to market, but not at the expense of runaway budgets. This paradox forces us to consider innovative automation for low-volume, high-throughput manufacturing — a costly but potentially revolutionary investment.
Who will shoulder this investment? That’s still an open question. The fee-for-service model dominating the contract sector complicates incentives. Margins are razor-thin, and few are willing to absorb lower revenues for the sake of process improvements. And yet, each fractional innovation — be it a more efficient fill/finish step or better inventory control — can unlock substantial downstream savings.
Lessons From Beyond Pharma
We’re not alone in our supply chain dilemmas. Industries from automotive to tech have long optimized around first in, first out (FIFO)/last in, first out (LIFO) inventory models, modular design, and lean production. In pharmaceutical manufacturing, the adaptation of enzymatic steps from chemical engineering has already demonstrated how cross-industry learnings can reduce waste and enhance efficiency. Why stop there?
Imagine applying AI-driven demand forecasting, used in retail, to predict packaging material needs. Or blockchain, pioneered in logistics, to enhance traceability in clinical trial material. Every borrowed innovation is a layer in the Matryoshka, making the whole system more responsive and robust.
The Final Product Is Not the Final Thought
What ends up on the pharmacy shelf or in a clinic is more than just a product. It is a framework of innovation, logistics, and collaboration. From CDMOs producing drug substances and drug products to CPOs assembling the final kit, the chain is only as strong as its weakest link. As we look forward, the pharmaceutical industry must continue to move away from siloed thinking toward systems thinking, where integration, transparency, and adaptability define success.
As with Matryoshkas, every product is a story within a story, and it is only by unpacking each layer that we can appreciate the complexity, creativity, and innovation that got us there.
Conclusion
The Matryoshka isn’t just a metaphor — it’s a mirror held up to the pharmaceutical supply chain. Each nested component, from early development to final packaging, represents a critical step that must align precisely with the next. As the roles of CDMOs and CPOs continue to converge, the industry must recognize that innovation isn’t always about grand reinvention — it’s often about precise orchestration. In a world where speed to market, cost control, and product integrity can’t be compromised, success will come to those who think holistically, partner strategically, and never lose sight of the whole while perfecting each part. The journey from the clinic to the market is no longer linear — it’s layered, interdependent, and dynamic. And just like opening a Matryoshka, understanding the full picture requires unpacking every layer.
About The Author:
Bernardo Estupiñán is principal at Drug Biologics Consulting LLC and managing director at CDMO Advisor LLC. He has global leadership experience in R&D, manufacturing, quality control, market research, and global marketing/business development. At Drug Biologics Consulting, he launched CDMO Advisor, a free platform helping users connect with the right C(x)DMO for their projects. He can be reached at bestupinan@drugbiologis.com.