The New Clinical Packaging Paradigm: Differentiation And Decentralization

By Christopher Ohms, Ohms Consulting

The rapid evolution toward flexible, decentralized, and technology-enabled clinical supply models is placing unprecedented strain on traditional clinical packaging organizations (CPOs). These legacy providers — many of whom built their operations around centralized, high-volume, and labor-intensive processes — are increasingly misaligned with the needs of today’s agile clinical trial landscape. As Phase 1 and Phase 2 studies migrate toward lean-labeling approaches, country-specific customization, and distributed kitting models, CPOs face not only immediate risks of capacity underutilization but also longer-term threats to their strategic relevance. Historically, traditional packagers thrived under conditions of predictability: standardized protocols, fixed study geographies, and batch-based distribution planning. But today’s clinical operations demand a different kind of responsiveness — smaller, more frequent supply runs, adaptive trial designs, rolling site activations, and just-in-time relabeling — all of which reduce the utility of centralized packaging strategies. The question is no longer whether traditional models can adapt, but whether they can do so fast enough to stay viable in a future defined by speed, specificity, and global flexibility.

Today’s Landscape Seen Through The Eyes Of The Contract Packager

This operational misalignment carries real financial consequences. Traditional CPOs, originally optimized for scale, now face a growing fixed-cost burden. Their equipment-intensive infrastructures — designed for long-run production of thousands of kits, multilingual booklet label printing, and comprehensive QC processes — are poorly matched to today’s high-mix, low-volume, and fast-turnaround requirements. As demand fragments into smaller, more frequent batches, margins shrink on these variable, low-volume projects. Equipment often remains idle, capacity is underutilized, and per-unit costs increase — costs that are frequently hidden from sponsors within bundled CDMO pricing models.

The result is a fragile revenue model increasingly dependent on legacy contracts or overflow packaging work from larger, integrated CDMOs. In some cases, to meet country-specific timelines or adjust to protocol changes, sponsors may resort to hand-labeling of IMPs, particularly for small-volume Phase 1 or 2 studies. While large traditional packaging organizations can perform this work, their scale often makes them inefficient for such manual short-run tasks. Conversely, having the manufacturing CDMO perform labeling on-site or routing labeling through a specialized logistics provider in a controlled, dedicated space closer to the point of distribution can offer significant advantages. These include faster turnaround, lower transportation risk, streamlined chain of custody, and more agile alignment with site activations or enrollment fluctuations. For sponsors, this can translate to improved speed-to-site, reduced waste, and greater control over inventory — all without compromising quality or compliance.

These structural inefficiencies are not just financial – they are competitive. As sponsors increasingly prioritize speed, flexibility, and cost transparency, some traditional providers are losing early-phase business to CDMOs with integrated packaging capabilities or to regional logistics depots offering on-demand labeling closer to investigator sites. This erosion of market share can trigger a compounding effect: declining project volume leads to underutilized infrastructure, capacity write-downs, and reduced investment in process innovation, which further weakens a provider’s market position.

Today’s Landscape Seen Through The Eyes Of The Sponsor Company

In parallel, sponsors are becoming more cost-aware and strategic in procurement. When clinical packaging organizations operate multiple global facilities, it’s now common for sponsors to request internal competitive bids between sites. With labor rates, turnaround times, and quality systems varying widely by region, sponsors recognize that operational cost structures can differ significantly, even within the same organization. This adds internal pricing pressure and exposes inefficiencies that were once shielded by centralized volume.

As clinical trials grow more complex and fragmented, sponsors are reshaping how they source clinical packaging and supply services. The traditional model of awarding contracts based solely on historical ties or lowest cost is giving way to strategic sourcing frameworks that emphasize flexibility, transparency, and risk management.

Sponsors increasingly favor modular service models that allow them to split packaging functions across multiple providers — leveraging regional logistics hubs for just-in-time labeling near sites, while retaining centralized partners for complex kit assembly. This hybrid approach reduces inventory holding, accelerates site activation, and allows rapid response to protocol changes or enrollment variability. Digital supply chain visibility is now a baseline expectation, with sponsors requiring real-time tracking of inventory, batch status, and shipments to anticipate and resolve disruptions promptly.

When selecting packaging partners, sponsors prioritize a range of attributes beyond operational capacity. They seek regulatory expertise to ensure that labeling and packaging meet all applicable global requirements, thereby minimizing compliance risks. Agility matters greatly, as sponsors look for partners that can handle rapid-turnaround, low-volume projects without sacrificing quality. Additionally, a collaborative mindset is valued, with openness to co-develop supply strategies alongside sponsors, CDMOs, and logistics providers.

Success metrics for sponsors have evolved accordingly. They now emphasize first-time-right packaging that minimizes errors, deviations, and rework to protect study timelines and data integrity. Supply chain responsiveness is another key measure, reflecting a partner’s capacity to quickly adapt to protocol amendments and site activations. Sponsors also demand transparent, itemized costing that clearly outlines pricing without bundled fees or hidden charges. Inspection readiness is important, with a focus on strong GMP compliance supported by thorough documentation. By understanding and aligning with these priorities, clinical packaging providers can differentiate themselves and strengthen strategic partnerships. Providers that fail to adapt risk losing ground to more integrated, nimble service providers who better anticipate sponsors’ needs.

To remain relevant in this shifting landscape, traditional clinical packagers must evolve beyond commodity services and reposition themselves higher up the value chain. While decentralized and on-demand labeling models are gaining traction, not all studies lend themselves to simplified supply strategies. In fact, many trials — particularly in rare diseases, oncology, or gene therapy — require complex kit configurations that demand the precision, quality systems, and engineering expertise that traditional packagers are well-equipped to provide. And if they do not require complex kitting operations, they do require a nimbleness to support global sites with minimal frictional loss due to operational inefficiencies between their own entities. These include multicomponent regimens involving both oral and injectable products, patient self-administration kits with integrated devices and instructional materials, or dose titration kits that must follow strict time-based schedules and calendar labeling. In such scenarios, the ability to design, assemble, and qualify highly customized, protocol-specific kits in a GMP-compliant environment remains a critical differentiator. For traditional CPOs, this represents a defensible niche — one where scale is less important than control, accuracy, and configurability and where sponsors are willing to invest for the assurance of executional excellence.

Strategic Differentiation: End-To-End Support For Materials

In parallel with growing trial complexity, sponsors are also seeking greater end-to-end support for sourcing and managing ancillary materials, especially comparators, rescue medications, and auxiliary supplies. This presents another opportunity for traditional clinical packaging organizations to redefine their role by specializing in high-value services that protect study integrity. One promising path is to evolve into blinding and masking specialists. By leveraging their quality systems and GMP infrastructure, traditional providers can take on critical tasks such as applying matching over-labels, color masking to obscure dosage forms, or customized secondary packaging that ensures the indistinguishability of active versus placebo treatments. These capabilities are particularly important in studies involving marketed comparators, biosimilars, or open-label-to-blinded conversions, where preserving the blind is essential for trial validity.

Some forward-leaning packaging firms are already expanding into this space, establishing preferred networks of comparator suppliers and investing in dedicated blinding suites equipped for both manual and automated processes. For example, Catalent has enhanced its comparator sourcing and clinical blinding capabilities through strategic expansions at key facilities in the U.S. and U.K., offering customized over-encapsulation, matching placebo development, and secondary packaging services tailored to double-blind protocols. PCI Pharma Services also has emerged as a leader in this niche, with purpose-built blinding suites and a global sourcing network that supports active comparators, rescue medications, and biosimilars. Meanwhile, Sharp Clinical Services continues to expand its integrated supply model, combining comparator sourcing with GMP blinding, packaging, and distribution under one umbrella. These investments position organizations as strategic partners capable of managing the sensitive interface between clinical supply logistics and study design, particularly for trials requiring masking precision and tight turnaround times.

Decentralized Ownership Of Labeling Compliance

As clinical packaging becomes increasingly specialized, regulatory and labeling expertise has emerged as a key area where traditional providers can differentiate themselves, particularly as global trial footprints expand and country-specific labeling requirements grow more complex. Today’s sponsors need partners with deep regulatory acumen and technical fluency to navigate evolving frameworks such as the EU Clinical Trial Regulation (EU CTR), Annex VI, and local health authority expectations.

Labeling is no longer a static or uniform task; it has evolved into a dynamic, highly variable function that requires rapid country-specific customization, multilingual compliance, and efficient management of artwork life cycles under tight timelines. Despite this growing complexity, many clinical packaging organizations remain hesitant to take full responsibility for interpreting local labeling regulations or maintaining up-to-date guidance. As a result, the burden of regulatory accuracy typically falls to the sponsor, which must validate and approve country-specific label text elements, even when supported by an external packaging partner.

This fragmented ownership model introduces real operational risk. Delays, regulatory inconsistencies, and last-minute relabeling are common in multi-country studies, particularly those with compressed startup timelines. In some cases, the risk is compounded by inexperienced sponsor project managers or within the CPO, who may make overly confident or incorrect assertions regarding label text, layout, or compliance requirements. Sponsors should remain vigilant, ensuring that internal clinical, quality, and regulatory teams are engaged early and that vendor input is critically reviewed, especially when the labeling strategy spans multiple regions or regulatory jurisdictions.

Given the complexities and risks associated with decentralized ownership of labeling compliance, sponsors increasingly seek partners that can assume greater responsibility and provide end-to-end solutions. Packaging firms with robust documentation practices and proven regulatory track records are uniquely positioned to meet this demand by offering "labeling as a service." Such providers help sponsors and CDMOs streamline compliance processes, reduce relabeling risks, and accelerate site readiness. This value proposition becomes even more critical as investigational products transition toward commercialization. At this stage, labeling requirements intensify, encompassing commercial-grade standards that often include serialization, aggregation, and specialized features such as child-resistant or tamper-evident packaging, as well as senior-friendly designs tailored to specific patient populations. Providers capable of managing this seamless clinical-to-commercial handoff — while ensuring regulatory compliance and operational agility — deliver meaningful strategic advantages to sponsors navigating complex product life cycle milestones.

Additional Trends We May See Gain Traction In The Near Future

Building on their capabilities in regulatory labeling and life cycle management, traditional clinical packagers can further extend their value by supporting later-phase and commercial launch activities. As trials advance to Phase 3 and products approach market entry, these providers can repurpose existing packaging lines to deliver critical services such as process validation, stability packaging, and bridging solutions that ensure continuity between clinical and commercial supply chains.

Moreover, with environmental regulations becoming more stringent and corporate ESG commitments gaining prominence, packaging organizations have a growing opportunity to lead in sustainability. For instance, companies like Smurfit WestRock and Amcor are pioneering recyclable packaging formats, while others are adopting green printing technologies, such as water-based inks and low-emission adhesives, to minimize environmental impact. By integrating sustainable materials and processes into their service offerings, traditional packagers not only meet regulatory expectations but also align with sponsors’ broader environmental goals. By differentiating on eco-conscious design, traditional packagers can attract sponsors looking to align clinical operations with sustainability goals, especially publicly traded biotech and pharma firms.

Conclusion

Traditional clinical packaging providers stand at a pivotal crossroads. While macro trends such as decentralization, digitization, and increased customization undeniably challenge legacy operating models, they also create significant opportunities for those willing to innovate and strategically pivot. Future sustainability will hinge on transforming infrastructure to focus on high-value, complex services; embracing digital tools that enhance supply chain visibility; and evolving into true strategic partners rather than mere execution vendors. Providers that successfully adapt will secure continued relevance and growth amid an increasingly fragmented and sophisticated clinical development environment. Conversely, those that resist change risk being confined to a shrinking segment of commoditized, low-margin work within a contracting legacy space. The question remains: Are traditional clinical packaging organizations ready to transform fast enough to meet the demands of tomorrow’s global clinical trials?

About The Author:

Christopher Ohms is a consultant at Ohms Consulting and is a San Francisco Bay Area native. He has held positions at Gilead Sciences, Patheon, Stanford School of Medicine, Pain Therapeutics, and ALZA.