STRATEGIC OUTSOURCING IN PHARMACEUTICAL INDUSTRY
Journal
KNOWLEDGE – International Journal
Date Issued
2022-02-18
Author(s)
Abstract
The pharmaceutical industry is facing a tremendous challenge from the current global economic crisis.
Enormous earnings from new “blockbuster” drugs are perishing and old drug targets are leading to limited profits.
Despite substantial investment in research and development of new drugs, the return thereof is disappointing. New
targets including biologic, biomarker, as well as studies of the genome, as well of drugs for treatment of chronic
diseases, have much longer duration of the development phase. Therefore, companies are focused on shortening
duration, lowering costs, enhancing efficiency and minimizing usage of resources. All these challenges are forcing
the pharmaceutical industry to change its drug development model from a model relying on internal capacities to an
open model that embodies aid from a Contract Research Organization (CRO) experienced in understanding
regulatory standards, equipped with adequate infrastructure, qualified and competent staff in pharmacy, and
experienced in dealing with regional issues. Outsourcing has great importance for pharmaceutical companies.
Manufacturers of original pharmaceuticals may opt for outsourcing of different phases of drug development, while
generic companies confide the clinical trial – the last phase of drug development – to selected CROs which meet
high standards of expertise in performing the studies, using highly reliable analytical methods, located in attractive
geographic locations and have competitive pricing.
This paper is inspired by the challenges with which the pharmaceutical industry has to cope in the new globalized
world. At the beginning the authors provide short introduction to the significance of outsourcing in the case of the
pharmaceutical industry; than differentiate Big Pharma from generic pharmaceutical companies; define benefits and
risks from outsourcing in the pharmaceutical industry; stress the significance of project management as a key
prerequisite of planned and executed outsourced activities; and finally present concluding remarks.
Enormous earnings from new “blockbuster” drugs are perishing and old drug targets are leading to limited profits.
Despite substantial investment in research and development of new drugs, the return thereof is disappointing. New
targets including biologic, biomarker, as well as studies of the genome, as well of drugs for treatment of chronic
diseases, have much longer duration of the development phase. Therefore, companies are focused on shortening
duration, lowering costs, enhancing efficiency and minimizing usage of resources. All these challenges are forcing
the pharmaceutical industry to change its drug development model from a model relying on internal capacities to an
open model that embodies aid from a Contract Research Organization (CRO) experienced in understanding
regulatory standards, equipped with adequate infrastructure, qualified and competent staff in pharmacy, and
experienced in dealing with regional issues. Outsourcing has great importance for pharmaceutical companies.
Manufacturers of original pharmaceuticals may opt for outsourcing of different phases of drug development, while
generic companies confide the clinical trial – the last phase of drug development – to selected CROs which meet
high standards of expertise in performing the studies, using highly reliable analytical methods, located in attractive
geographic locations and have competitive pricing.
This paper is inspired by the challenges with which the pharmaceutical industry has to cope in the new globalized
world. At the beginning the authors provide short introduction to the significance of outsourcing in the case of the
pharmaceutical industry; than differentiate Big Pharma from generic pharmaceutical companies; define benefits and
risks from outsourcing in the pharmaceutical industry; stress the significance of project management as a key
prerequisite of planned and executed outsourced activities; and finally present concluding remarks.
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