Outsourcing in the pharma industry – experience, expertise and enthusiasm
Key success factors in fostering and maintaining a long-term strategic partnership
2012 was regarded by many commentators as one of the most challenging years in the pharmaceutical industry’s history, due in no small part to numerous products facing patent expirations and increased global competition. It is now considered a sound strategic move by pharmaceutical companies, from Big Pharma to smaller players, to rely increasingly on outsourcing service providers to fulfil specific tasks, solve problems and improve efficiency and productivity.
One of the growing trends is the outsourcing of late-stage scale-up and commercial manufacturing activities, evidenced by the fact that in the last three years, more than 100 manufacturing facilities owned by pharmaceutical companies closed their doors for business in the US alone. The global pharma contract manufacturing market is expected to reach US$40.7bn by 2015, according to a recent report by Global Industry Analysts.
Strategic not tactical, partners not clients
While engaging in an outsourcing solution may make good commercial sense to a pharma company seeking efficiencies in their business, handing over an important step in the drug commercialisation process does not come without risk and should be carefully considered. In a recent outsourcing survey conducted by contractpharma.com, 75% of respondents said that they would use the word ‘partnership’ to describe their relationship with their contract service provider(s). Further evidence of the practice of selecting a few reliable partners was shown with the majority of survey respondents saying they engage in only a handful (one to five strategic vendor relationships) of partnership arrangements for their outsourcing needs.
With so much at stake, engaging in an outsourcing solution is no longer a tactical decision, but rather is considered a partner-driven strategic activity.