Pharmaceutical industry outsourcing

With respect to the pharmaceutical industry, outsourcing and contract manufacture probably got its start with APIs, final and key intermediates, and other steps... 

Contain cost—since only one in three drugs recovers its cost of development, the pharmaceutical industry needs to find ways to increase the supply of drug candidates while at the same time reduce development costs. Outsourcing to top-tier CROs can accomplish both of these objectives. 

Taaffe, R 1996. Outsourcing in the pharmaceutical industry, Financial Times Management Report. 

In performing their role, scientists working in an R D area of the Chemical and Pharmaceutical Industries, need the support of a large number of other professional people. Some of these support services are shown in Figure BIO. In big companies this support was provided traditionally in house but a majority companies now outsource at least some of these activities to external agencies (see Section B, 1.4). When a service, which previously has been provided internally, is outsourced it is an obvious concern that the support provided may not be of the same quality. To this end it... 

Examples of this are the late nineties phenomenon of divestments, mergers and of take-overs in the oil, chemical and pharmaceutical industries the focus on core competencies and the extensive use of subcontracting/outsourcing. 

Since the availability of manufacturing/ fermentation capacity at present remains a major challenge for the pharmaceutical industry, the third section of the chapter relates to the management of outsourcing processes. 

Globalization in the modem era has led to worldwide outsourcing. Two chapters were dedicated to the changes in the pharmaceutical industry in terms of outsourcing. In Chapter 28, Lu and Shinkai (Beta Chem, Japan), formerly from Merck, discuss the trends. Robins and Hannon (Davos), in Chapter 29, outline the importance of sourcing pharmaceutical products to China and India. 

Higgins M J, Rodriguez D (2005). The outsourcing of R D through acquisitions in the pharmaceutical industry. /. Einancial Econ., In Press, Corrected Proof, Available online 2 November. 

Pharmaceutical companies usually have to provide capacity for the new product before the new product is approved. Sometimes, this initial production capacity may be outsourced to a custom manufacturer. In fact, outsourcing has become more important to the pharmaceutical industry as pharmaceutical companies focus internal resources on developing new products, and take advantage of the manufacturing capacity of external sources for both initial and also long-term production capacity. 

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