GLOBAL OUTSOURCING:COLLABORATIONS &PARTNERSHIPS WEI GAROFOLO & FABIO GAROFOLO

The issues and challenges the pharmaceuticalindustry is presently facing have forced

pharmaceuticalcompanies to change their drug-developmentmodel from the old ‘closed’ model, based on

development reliance on internal resources andcapabilities, to the new ‘open’ model that comprises

functional outsourcing, geographic outsourcing,licensing, co-development partnerships

and more.

Hence, outsourcing is rapidly growingand expanding from the traditional late development

stages only (manufacturing and clinicaltrials) to other stages, especially early stagessuch as R&D. Indeed, it is expected that R&D

outsourcing from pharmaceutical companies willincrease from US$14 billion in 2006 (28% R&D

outsourced) to US$20 billion by 2010 (morethan 40% of R&D might be outsourced).

There are many advantages for pharmaceuticalcompanies in outsourcing. First, outsourcing

helps pharmaceutical companies tolower the costs of drug development becauseestablishing state-of-the-art in-house facilitiesis considerably more expensive. Furthermore,through outsourcing, valuable in-house talent

can be redeployed towards the core competenciesof the pharmaceutical companies. Finally,

outsourcing helps to accelerate the developmentof effective drugs.

Apparently a product couldmake it to the market faster with the aid of a‘good’ contract research organization (CRO)because, first, CROs are usually experts in

understanding the strictest regulatory standards(e.g., GLP, GCP and GMP), and, second, CROs

have the necessary infrastructure up and runningwith qualified staff for specific issues and,

last, most CROs operate globally with experiencesin dealing with regional issues.

With the trend that the pharmaceutical industrywill continue to increase its widespread use of

outsourcing in the coming years, pharmaceuticalcompanies need to become more experienced

and sophisticated in managing portfolios ofoutsourcing contracts focused on establishing

global strategic partnerships with CROs. Inother words, outsourcing must be done strategically

rather than in an ‘ad hoc’ unplanned fashion.

Therefore, research and investigations arerequired when looking for CROs. Due diligenceon the potential CROs must be conducted to

evaluate its level of expertise in the required field.When R&D projects are outsourced, communications

from scientists to scientists should bepreferred. The CRO’s responsiveness and delivery

to timelines must also be considered [2]. Itis also useful to find out who the CROs’ clientswere and are; contacting some of their clients

and seeing whether they were or are satisfied willhelp to assess the CRO’s reputation in both science

and quality.

A site audit is also necessarybefore working with any CROs. In case of notbeing familiar with the outsourcing process, a

consultant should be used for the audit. Finally,it is important to understand that the selectionof the CROs should not be based only on cost,

but on quality, science, flexibility andcommunication,

because these are the key factors forsuccessful long-term relationships/partnerships.

For generic companies, there are extra criteriain selecting CROs. For instance, preferred provider

status is often awarded to CROs based ontheir expertise in the studies performed, availability

of highly reliable analytical methods,geographic locations and competitive pricing.

“…even if the market for generic drugs is huge,the competition among generic companiesthemselves has become tougher, which is

quickly reducing the prices, hence lowering theprofits for generic drug companies.”

There are four key principles in managing thepartnering relationship between the pharmaceutical

companies and CROs. First, trust andconfidence – the understanding of common

goals, objectives and processes between thepharmaceutical

companies and CROs are extremelyimportant. Second, responsiveness – the CROsmust respond fast to any possible changes fromthe pharmaceutical companies, such as changes

in timelines, formulations and protocols.

Third,science and innovations – the CROs should be

able to deliver specific solutions for very specificscientific problems from the pharmaceutical

companies. For example, the CRO’s expertiseand knowledge in certain therapeutic areas,

such as age-related disease have become essential,because they can offer pharmaceutical companies

the experience of drug development inthese areas where there is a strong unmet medicalneed and overwhelming number of drugs currently

in development [2,6].

Last, managementleadership – there must be capable executivesfrom bothpharmaceutical companies and CROswho are able of mutual understanding in dealing

with the projects, especially difficult projects.In short, the goal of any partnering relationshipshould be to build a win–win situation for both

pharmaceutical companies and CROs.

To read the entire publication, pleasevisit Wei Garofolo's website below:

https://sites.google.com/site/globalcrocouncil//weigarofolobio