Knowledge outsourcing

A dimension of the increasing disintegration of pharmaceutical R D is the growing use of contract research organizations (CROs) to conduct clinical trials of new drugs. By 1999, 23% of trials were outsourced to CROs (Azoulay 2004, pp. 1593,1600). In general, the more data-intensive projects are outsourced, while knowledge-intensive projects are more frequently undertaken within pharmaceutical companies (p. 1592). 

Whether to develop in-house or outsource the project, the development team must have strong technical skills combined with strong business knowledge and must interact with users on a regular basis (Chapters 1 and 5). Try to embed a user in the development team if possible. The idea of handing off a requirement document to an outsourcer and expecting a product in 6 months or 1 year that meets user expectations and gets delivered to the users on time simply does not work. 

The outsourcing of C and D customers, for example, allows producers to save sales, logistics, and administration costs. Furthermore, a focus on their core customers allows them to reduce their cost of complexity significantly and at the same time enhance the profitability of their overall customer portfolio. Further important added value arises from the distributor s in-depth knowledge of regional markets and ability to design tailor-made packages. As a result of their broader market access, distributors are often able to increase the sales of dedicated product lines outsourced by suppliers. New customers may be attracted and switch to products... 

Which areas, then, should be outsourced Efficiency gains and reduction of capital employed have to be balanced against higher transaction costs and a considerable risk of losing internal knowledge. Services that can be clearly specified and planned would typically be purchased externally if this allows a cost reduction. Detailed engineering is one example, while breakdown maintenance clearly would not fall into this group. 

The number of person-hours required for the identification and selection process depends on the size of the research program to be contracted. Normally, a minimum of 1 to 2 person-weeks is necessary to effectively evaluate three to four CSOs for each research study to be outsourced. Many clients use consultants to assist in the CSO selection process. However, these clients need to ensure that the consultant has the necessary expertise and knowledge of how CSOs operate. A common mistake is to hire a consultant with expertise in a disease area but not in the research process, such as toxicology or drug metabolism, or in regulatory compliance but not in the science necessary to characterize a drug candidate successfully. 

The R D process is benefitting from the expanding knowledge base, and from the increasing contributions from robotics and automation, informatics and bioinformatics, equipment development, and tire outsourcing of key processes and consolidation of the regulatory environment. 

Figure 13 Technology transfer in the outsourcing environment— the worst scenario, shown on the basis of a virtual company that licenses a compound that does not bring a sufficient process body of knowledge.

---