CROs and CMOs Have Cause to Celebrate - Pharmaceutical Technology

Latest Issue
PharmTech

Latest Issue
PharmTech Europe

CROs and CMOs Have Cause to Celebrate
Annual survey shows strong growth for service providers and promises to continue into 2013. This article is part of a special issue on outsourcing.


Pharmaceutical Technology
Volume 36, Issue 8, pp. s8-s18

Rising expenditures drive outsourcing


Figure 4 What is the trend in your company regarding outsourcing in your service area?
The overall strength in the services market appears to be due to growth in total spending more so than to growth in the level of outsourcing. Among bio/pharma respondents to the survey, 39% said that spending on contract services is growing at the same pace as all spending, while 27% indicated that outsourced spend is growing faster than total spending (see Figure 4). However, that 27% is down from 37% in the 2011 survey and more in line with the years previous to 2011. An even higher share, 34%, indicated that spending on contract services is actually growing more slowly than total R&D and manufacturing budgets.


Figure 5 What is vendor competition like for your business?
Despite the improved market conditions, most CROs and CMOs aren't taking anything for granted and remain aggressive in seeking new business. Over half of bio/pharma company respondents reported that service providers are willing to cut price, the same as in the past 3 years (see Figure 5). However, 33% indicated that service providers were insisting on firmer pricing, which is up slightly from last year. We would expect to see firmer pricing in a strong market.


Figure 6 How have you managed the number of contractors you work with?
We did not see any major changes in the way that bio/pharma companies are managing their portfolios of service providers. Among bio/pharma company respondents, one-quarter indicated they have reduced the number of vendors they work with, while the same number indicated that they plan to work with even more vendors (see Figure 6). One-third (33%) plan no changes in the number of vendors, and only a small percentage are making plans for further supplier reductions.


Figure 7 Plans for sourcing in India and China
One area where bio/pharma companies continue to look for new supplier options is in emerging markets, especially India and China. Among bio/pharma company respondents, 46% indicated they are either actively sourcing services from India or China, or are actively looking for vendors from those countries (see Figure 7). That is up only slightly from 2011, but it continues a slow-but-steady trend toward getting Asian companies into their vendor mix. Only one-third of respondents indicated that they have no plans to source from emerging market vendors, but that is down from 50% just three years ago.


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
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
Better Comms Means a Fitter Future for Pharma, Part 1: Challenges and Changes
Source: Pharmaceutical Technology,
Click here