Almost 30% of biopharma CEOs insourced work in ’11; survey
PricewaterhouseCoopers (PwC) found that 28 per cent of surveyed pharmaceutical and life sciences CEOs had insourced a previously outsourced business process or function in the past year. The shift comes as biopharma companies continue to assess the benefits of their outsourcing relationships.
“Pharma and life sciences CEOs are increasingly challenging their companies’ cost bases, especially as pricing and margins come under greater pressure”, PwC wrote in its 15th annual CEO survey, which gathered responses from 82 leaders of pharmaceutical and life sciences companies.
A willingness to reconsider outsourcing to get the best deal was also shown by one in four biopharma CEOs telling PwC they had ended a strategic alliance in the past year. Biopharma CEOs ended more alliances and insourced more previously outsourced work than the average across all industries.
The PwC finding follows insourcing actions by GlaxoSmithKline (GSK) and Eli Lilly. Earlier this month GSK outlined how it is working more efficiently by bringing work in-house. In a different approach to insourcing, Lilly contracted AMRI to provide 40 full-time chemists to work at its Indianapolis site.
Reconsidering the mix
However, the PwC report shows biopharma is still outsourcing. As well as ending more strategic deals than other industries, biopharma CEOs also began more partnerships. PwC reported that two-fifths of surveyed biopharma CEOs said they had formed new alliances in the past year.
Biopharma CEOs also showed a greater willingness to outsource business processes, with 43 per cent taking this action in the past year. This compares to 35 per cent of their peers in other industries.
