Challenges In The Changing Outsourcing Landscape

Oriol Prat, Marketing Manager, and Marga Viñes Senior Product Manager, from Grifols give us a quick rundown of how business is changing and what challenges the company faces.
Oct 01, 2011

How have outsourcing partnerships altered in light of newer market trends?

In the past, pharma companies participated in the global R&D process from initial development right through to final product commercialisation. Today, however, those same companies focus on added value and tend to outsource certain, nonstrategic areas to be faster and more competitive. This could be research areas, manufacturing areas or regulatory issues — anything that enables companies to focus more of their own, internal resources on core activities.


Oriol Prat
There is also a growing trend for pharma companies to outsource to only one 'preferred' service provider. When embarking on an outsourcing partnership, trust and communication are essential between all parties for successful long-term orientation agreements. Becoming a preferred partner is not something that is usually planned; it comes about gradually as you earn a customer's trust and they see you as an extension of their own organisation. This is profitable and beneficial for both parties.

Have you seen an increase in particular services?


Marga Viñes
At our company, we specialise in sterile solutions, lipid emulsions and medical devices. There are few companies involved in the manufacture of lipid emulsions because of the need for complex procedures. For us, the keys to success in this area have been to be flexible in terms of customs requirements, adapting manufacturing process, sharing investments and giving a daily support through project leaders; in short, being a true partner from the initial manufacturing an ad-hoc product.

Parenteral solutions and lipid emulsions are a rapidly growing area of the market, mainly because of the high number of patent expiries. In particular, the ready-to-use mixtures will be in demand because of the advantages this form offers, as well as their widespread use in hospitals. Such mixtures offer advantages because they can reduce medication errors, require less manipulation, are user friendly and, consequently, safer for partients. Patient safety is something that can not be forgotten in any stage of a pharma company's business. However, the manufacture of these mixtures requires significant manufacturing capacities; many pharma companies decide not to invest in the expensive facilities themselves and instead turn to outsourcing.

How has the growth of emerging markets affected business?

Emerging markets are powerful growth drivers and have placed many western companies in a weaker position; cost structures in India and China are lower compared with European manufacturing companies. There is huge pressure on us and other western service providers to reduce costs, as well as to maintain quality while reducing risks and time to market. Fortunately, many of these pressures have been in place in the market for a long time and companies with experience are well placed to deal with them.

However, the emerging markets can also provide an opportunity for western companies to expand. In the last few years, lack of experience and technology in these markets has led to a particular demand for complete turnkey projects for parenterals, including the construction of pharmaceutical plants and everything necessary to make it run, such as machinery, documentation and training for example. Only companies with long-term excellence experience can lead such projects, and so we can see an opportunity in the threats presented by the emerging markets.