Stall Out in R&D Outsourcing - Pharmaceutical Technology

Latest Issue
PharmTech

Latest Issue
PharmTech Europe

Stall Out in R&D Outsourcing
An industry survey finds that pharma's outsourcing practices keep the industry from reaping the full benefits of outsourcing.


Pharmaceutical Technology


Indeed, while the expenditures on contract services by major pharmaceutical companies continue to grow, companies have been slow to develop the infrastructure to support effective external sourcing. I was talking recently with a strategic sourcing director at a major pharmaceutical company. The role of his team is to support the sourcing activities in the company with "big-picture" analysis of issues like supply-and-demand conditions, development of the supplier base, and risk scenarios. He complained that the sourcing teams are very focused on managing transactions with existing suppliers and spend little time thinking about long-term strategic issues that could lead to more effective results from sourcing practices.

Pharmaceutical companies seem to be moving in the right direction, but it will take more time. True outsourcing, the relinquishing of control, as Hintze defines it, is most often embraced only as part of a desperate effort to turn around a company's performance. This was true in the automotive industry, and it is evident in the efforts of some major pharmaceutical companies to respond to major pipeline and market reversals. Executives at Pfizer (New York) and Merck (Whitehouse Station, NJ), for instance, have made public commitments to outsource more of their basic activities, and their efforts to flatten their organizations by culling out layers of management will lessen the resistance to developing effective outsourcing relationships. We also are seeing pharmaceutical companies and CROs experiment with models that incorporate more performance-based incentives, especially as more functional outsourcing relationships are developed (i.e., arrangements whereby companies outsource an entire functional process such as data management to an external service provider).

It's taking some time, but pharmaceutical companies are beginning to appreciate that giving up some control can lead to much better outcomes.

Jim Miller is president of PharmSource Information Services, Inc., and publisher of Bio/Pharmaceutical Outsourcing Report, tel. 703.383.4903, fax 703.383.4905,
http://www.pharmsource.com/.


ADVERTISEMENT

blog comments powered by Disqus
LCGC E-mail Newsletters

Subscribe: Click to learn more about the newsletter
| Weekly
| Monthly
|Monthly
| Weekly

Survey
FDASIA was signed into law two years ago. Where has the most progress been made in implementation?
Reducing drug shortages
Breakthrough designations
Protecting the supply chain
Expedited reviews of drug submissions
More stakeholder involvement
Reducing drug shortages
70%
Breakthrough designations
4%
Protecting the supply chain
17%
Expedited reviews of drug submissions
2%
More stakeholder involvement
7%
View Results
Eric Langerr Outsourcing Outlook Eric LangerTargeting Different Off-Shore Destinations
Cynthia Challener, PhD Ingredients Insider Cynthia ChallenerAsymmetric Synthesis Continues to Advance
Jill Wechsler Regulatory Watch Jill Wechsler Data Integrity Key to GMP Compliance
Sean Milmo European Regulatory WatchSean MilmoExtending the Scope of Pharmacovigilance Comes at a Price
New FDA Team to Spur Modern Drug Manufacturing
From Generics to Supergenerics
CMOs and the Track-and-Trace Race: Are You Engaged Yet?
Ebola Outbreak Raises Ethical Issues
Better Comms Means a Fitter Future for Pharma, Part 2: Realizing the Benefits of Unified Communications
Source: Pharmaceutical Technology,
Click here