Speaking during a panel at the AAPS Annual Meeting, which took place in November, Gregory Kupp, VP and chief operating officer at Pace Analytical Life Sciences – a contract analytical testing laboratory – noted that the industry has changed dramatically over the past 25 years. Namely, it has become more efficient and productive.
“Companies are able to do more by leveraging certain skillsets of specialized companies,” said Kupp.
Additionally, Kupp said the industry is seeing an infusion of talent into the contract research organization (CRO) business, some of which is due to downsizing at large pharma companies.
Outsourcing also enables companies to run multiple projects simultaneously, he explained. “Of Course, cost is always a factor in discussions,” said Kupp, adding working with CROs limits investment in terms of capital and human resources.
The take-home message? Kupp, who has worked in the outsourcing business for nearly 25 years, said if he could relay one message to the community, it would be the importance of aligning outsourcing strategies.
“It’s very important for pharma companies to share their strategy on outsourcing throughout their organization,” he explained.
Kupp said the most successful outsourcing relationships occur when the top level decision makers who decide to outsource, share their vision and goal with “the functional level people who make the outsourcing happen.”
“When the functional level people are not aligned with the strategy to outsource, sometimes they tend to undermine the outsourcing activities in the hopes of bringing [activities] back in house,” he explained.
The conundrum of outsourcing
Kenneth Cassidy, Ph.D., senior research advisor at Eli Lilly and Company explained, “It’s very easy to outsource.” Some say too easy, he said, during his presentation of "the conundrum."
As such, Cassidy stated that outsourced assays specifically are often treated as a commodity, and with any purchase, it’s easy to buy more than is needed.
“It’s easy to get the meal deal when I probably don’t need it,” he said, adding that having direction when outsourcing is difficult, if not impossible – and while a company may think it is in control, it may not be.
Cassidy also contested that outsourcing is not always cheaper, though it provides a “flexible economic model,” and one that he said is disruptive.
“We need communication, transparency, knowing that the CRO has plenty of other phones to answer, but we need that reliable, immediate back and forth,” Cassidy added.
“We need to be able to partner with contract labs, we don’t want to just buy data,” he said. “We want to buy answers. And to do that, that’s on both of us.”