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Outsourcing Offers Flexibility and Potential Cost Savings

Maria Thompson on February 27, 2013
Outsourcing in pharma offers flexibility and potential cost savings

By some estimates, the pharmaceutical outsourcing market could grow to $65 billion by 2018, fueled by a compound annual growth rate of nearly 15%.1 These are big numbers. What is driving sustained growth in this sector?

There is no single answer to that question, but there are a few top contenders. One is that pharmaceutical companies are looking to reduce the financial risks they take, and one way to do that is to spend less on research and development. Using pharmaceutical outsourcing, experiments can be carried out on a contract basis in addition to, or in place of, in-house operations. It is possible to outsource the researching of disease targets through genomics and proteomics approaches, along with gene silencing target validation. This sort of work gets outsourced to academic labs, specialty biotech companies, or CROs.

Pharmaceutical outsourcing is also attractive because of the flexibility it provides. Depending on where drugs fall in the pipeline, pharmaceutical companies can ramp up specific departments through outsourcing on an as-needed basis. Need more hands involved in clinical trials? Need to push the marketing? Outsourcing can bulk up a pharma company’s productivity in specific areas exactly when the demand is highest.

The outsourcing pharma marketplace includes companies specializing in drug discovery and manufacturing, preclinical studies and all phases of clinical trials, including post-marketing surveillance. Also on the clinical trials end, CROs and CMOs can be contracted to do clinical data management, regulatory services, and medical writing. Currently, most of what is outsourced is lab work and clinical trials work. Most of the companies doing that work are located in North America and Europe, but the number of CROs in Asia is rapidly expanding.

Ideally, the outsourcing resources available should enable an integrated research approach that covers all aspects of drug discovery. For companies doing tactical outsourcing, which will be discussed in a later post, the challenge can be piecing together a hodgepodge of services to maximize productivity and streamline drug development. Scientist is designed to help customers efficiently integrate these resources by creating a centralized database of outsourcing providers for every aspect of drug development.

  1. Global Healthcare Contract Research Outsourcing Market is expected to reach USD 65.03 billion by 2018, Transparency Market Research.