Outsourcing on the rise, says CHA report

Related tags Pharmacology

More than half of pharmaceuticals outsourced at least 20 per cent
of their ADMET (absorption, distribution, metabolism, excretion and
toxicology) studies in 2003, according to a new market research
report looking at outsourcing in the sector.

Moreover, the trend is for this proportion to increase to a startling 94 per cent of companies outsourcing ADMET studies by 2008.

Driving the take-up of outsourcing in drug discovery and development is a large, unmet need exists for improved R&D productivity, in the face of declining New Chemical Entity (NCE) introduction and increasing R&D expenses.

"While pharma companies have generally responded by restructuring the R&D organisation, investing in technology tools and platforms, and entering into mergers and deals, an alternative and highly effective approach to the innovation deficit - outsourcing - has been gaining momentum,"​ according to the study, entitled Successful Outsourcing of Pharmaceutical R&D: Trends and Strategies.

The publisher, Cambridge Healthtech Advisors, bases its conclusions on primary interviews with R&D outsourcing managers, public data sources, and a proprietary survey of the outsourcing practices of 72 pharmaceutical and biotech companies.

For pharmaceutical firms, outsourcing enables them to pursue potential new revenue streams outside of their core focus areas, and to benefit from improved productivity, emerging technologies, in-license opportunities, and increased growth, according to CHA.

In contrast, most biotech companies have no choice but to outsource given their financial and human resource constraints the high capital expenditures required for equipment and facilities.

Half of the biotech companies surveyed have a centralised procurement/outsourcing department for discovery research operations.Risk management and performance measurement practices are increasing inline with the growth in outsourcing. ADMET, drug discovery research, and contract formulation manufacturing are experiencing a sharp growth in demand.

"Outsourcing of discovery research, clinical trials and formulation manufacturing provides pharmaceutical companies with a highly effective approach to declining productivity and the pressure for consistent, high-growth financial returns,"​ according to the report.

For more information on the report, visit the CHA's website​ or contact Cindy Ohlman​.

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