Outsourcing has increasingly become synonymous with cost-cutting, even more so as the economic crunch has forced biopharmaceutical
companies to evaluate virtually every budget line item. Despite improvements in the economy and corporate profitability, the
preliminary data from BioPlan Associates 8th Annual Report and Survey of Biopharmaceutical Manufacturing indicate that companies are continuing to focus on how to reduce costs (1). The shift in outsourcing of crucial functions
may affect manufacturers' competitiveness in the long run.
For 2011, the BioPlan study finds that 1 in 10 biopharmaceutical companies has outsourced jobs in both process development
and in biomanufacturing to reduce costs (see Figure 1). This outsourcing occurred at nearly twice the rate of research and
development (R&D) job migration (i.e., outsourced by biomanufacturers at a rate of 7.2% and 4.6% to domestic and offshore
vendors, respectively). All of these activities are considered core strengths for biologics companies, and when such jobs
are outsourced, they tend to stay outsourced as institutional knowledge as infrastructure and experience migrate.
Figure 1: Percentage of respondents deciding to outsource select biomanufacturing functions due to cost-reduction efforts
Outsourcing data from the BioPlan Associates' report are among the crucial manufacturing issues probed through the annual
study of more than 300 global biomanufacturers and contract manufacturing organizations (CMOs). To put the data in context,
this report provides a composite view and trend analysis from biomanufacturers in 35 countries. It covers capacity constraints,
expansions, use of disposables, emerging trends and budgets, disposables, downstream purification, quality management and
control, hiring issues, employment and training (1).
Current industry service suppliers are recognizing this shift and have begun adding capabilities to their offerings. "A number
of CMOs are adding fill–finish capabilities as well as assay and product-characterization services to their offerings, and
several are providing additional flexibility by offering clinical production in disposable bioreactor systems," said Don Durham,
president of Durham Consulting in a recent interview with BioPlan Associates. Durham believes this reflects a continuing trend,
and service suppliers are responding by adding business capacity in these support services.
Outsourcing crucial operations
For the 2011 study, BioPlan Associates also evaluated the top 23 types of biomanufacturing operations currently being outsourced
(see Figure 2). The survey showed, not surprisingly, that respondents outsourced an estimated average of 35% of their fill–finish
operations. This level is consistent with last year's results. Approximately 26% of toxicity testing is being outsourced in
2011. In addition, outsourcing of both upstream and downstream operations (10.0% and 10.4% respectively), were up about two
percentage points in 2011 compared with 2010.
Figure 2: Estimated average percentage of outsourced activities by biomanufacturing facility (1).