Private equity (PE) firms are investing heavily in contract manufacturing organizations (CMOs) like PCI Pharma Services and Catalent, drawn by surging demand for fast, cost-efficient drug production, particularly for high-growth therapies such as Ozempic and Wegovy. According to the Wall Street Journal, investors view CMOs as a prime value play and a strategic growth opportunity in the healthcare supply chain.
This trend reflects a broader shift toward strengthening domestic manufacturing. Ongoing drug shortages and geopolitical pressures have underscored the need for more diversified and U.S.-based capacity, and PE investors are betting that both regulators and pharmaceutical companies will pay a premium for secure, resilient production partners.
Private equity’s role in healthcare delivery is complex. On one hand, it provides essential capital and operational know-how, but on the other, it raises concerns for policymakers, providers, and patients. The sector’s short-term, profit-driven approach can clash with healthcare’s long-term mission of patient care, sometimes resulting in reduced access or quality.
In contrast, CMOs present a different kind of opportunity for PE. With contract-based, steady revenue and strong demand in areas like biologics, they offer a more predictable investment profile. The industry’s fragmentation makes it ripe for consolidation, while ongoing supply chain volatility has increased the value of domestic and specialized manufacturing capacity.
