Outsourcing R&D in Asia: A Case Study of Pfizer - Pharmaceutical Technology

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Outsourcing R&D in Asia: A Case Study of Pfizer
Gonghua Pan, associate director and head of the parallel medicinal chemistry sourcing operations at Pfizer, explains the evolution of the company's approach to outsourcing research and development from a line-or function-centric approach to an integrated sourcing model. This analysis includes the role that contract research organizations in Asia play in the company's outsourcing actvities.


Pharmaceutical Technology


Transactional chemistry in Asia

As the US marketplace changed, "there was a desire to redirect our PMC resources to complement our efforts in Asia," says Pan. Pfizer established an R&D center in Shanghai in 2005. In assessing the potential of CROs in India and China, Pan explains that certain services are more suited to outsourcing when working with CROs in Asia. "Although some activities lend themselves well to sourcing in Asia, they tend to be activities that tolerate longer lead times," says Pan. These activities include developing drug libraries for use in a corporate collection, creating custom monomers for future use, and producing and resupplying bulk intermediates.

As the process moves forward to include derivatization of lead compounds and further biological testing, cycle times increase and the distance and time involved in performing these functions become a consideration.

"In-line analog production requires cycles of synthetic chemistry and in vitro testing to advance matter to development," explains Pan. "Early stages such as 'explore, screen, and design' and 'screening, design, and synthesis' are more cycle-time forgiving." In this part of the drug-development continuum, more analog series are pursued in parallel. There is less information on which leads and analog series are preferred, and matter can be assessed (either determined to be valued or terminated) with two to five assays, explains Pan. "Later stages (e.g., lead development and candidate selection) are less suited to remote analog production," says Pan. At this stage, programs often are narrowed to one to two analog series. Additional and more specialized assays are used. And process development and fine tuning of the route are common, explains Pan.

"Initially, time was a big downside to sourcing R&D in Asia," says Pan. The company had to consider the time to ship material to a CRO's site; the time to move product from China to Pfizer's research sites in the United States and the United Kingdom; the time to receive the material back at the CRO's site; the time to process the material; the time to test; and the time to upload data. The emergence of screening capabilities in Asia, however, changed the outsourcing paradigm for contract R&D. "The prospects of localized screening allowed for a virtual pharma model by which Pfizer could design the drug-screening criteria, but the execution of this criteria could be made in Asia. The ultimate outcome of this process was validated lead matter," says Pan.

From line-centric to integrated sourcing

As the capabilities of its CROs improved, Pfizer evaluated three potential operating models for outsourcing R&D as outlined below:

  • An integrated model under which all activities (e.g., discovery chemistry, assays, screening, in vitro testing, and absorption, distribution, metabolism, and excretion [ADME] testing) are consolidated at a single CRO
  • A rationalized model under which multiple CROs provide chemistry and biology services
  • A diffused model under which three different CROs provide chemistry functions (e.g., discovery chemistry), biology (e.g., assays and screening), and ADME testing (e.g., ADME and in vitro testing).

Pan outlines the advantages and disadvantages of each approach. The integrated model offers logistical advantages, lower cycle times, and the ability to develop a relationship with an established CRO. The disadvantage of using an integrated model is possible leakage of intellectual property (IP) because more functions are consolidated with a single CRO. "There was organizational resistance to this model because we historically divided functions among CROs as a way to prevent IP leakage. We had concerns of limiting our choice to essentially one CRO," says Pan.

The rationalized model offers the advantage of enhancing Pfizer's ability to manage IP. By working with more than one CRO, this approach distributes the risk and is more competitive, says Pan. The disadvantages are that the rationalized model increases the complexity of the project because it involves working with more than one CRO. This approach also lacks a single point of accountability for logistical issues among CROs. Also, this approach would require upfront investment in screening and ADME capabilities by Pfizer, if pursued.

The last approach, the diffused model, requires the least investment to develop capabilities and provides Pfizer the ability to choose the "best-in-class" CRO for each task, explains Pan. The drawbacks, however, are higher complexity and longer cycle times resulting from working with multiple CROs. "This approach would also require increased internal management and decrease our ability to develop or shape a CRO," says Pan.


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