Outsourcing pharma development is on the rise – 75% of the new drugs pipeline is currently outsourced, consuming two-thirds of annual development spending.
The global pandemic accelerated commitments to invest in outsourcing, as new product launches, and demand surges rose. Amidst the turbulence, many companies developed a trigger event approach to development and manufacturing, where M&As, capacity constraints, new product launches or even regulatory changes drove a reactive, rather than proactive and holistic strategy.
Today, weakened by the knock-on effects of this reactionary approach, the pharmaceutical supply chain needs a renewed strategy to bolster resilience.
Many pharmaceutical organisations have been left with a dispersed global network of subscale manufacturing sites, and contract research organisation relationships in dire need of optimisation.
In a climate of resilience and optimisation, is outsourcing still the right approach?
Read on to find out:
- Why pharma companies use third-party services
- 5 questions to ask before outsourcing pharma
- What other options are available?
Why do pharma companies use third-party services?
Mounting price pressures, changing regulatory requirements, and the need for agility and innovation are all factors driving more pharmaceutical organisations to turn to third-party services.
Choosing the right external service provider is one of the defining actions behind the success of your development and manufacturing strategy.
The right support from an external provider can offer companies an opportunity to forge strategic relationships that returns time back to core competencies and unlocks access to specialised expertise, all while reducing burn rates and costs.
While outsourcing is one of the most well-known models for third-party support, it does have its limitations, some of which include:
- Delays in recruitment
- Risk and compliance complexity
- Increases to capital budgets
In the next section, I’ll explore some of the key questions to consider before you initiate or expand your outsourcing network.
5 questions to ask before outsourcing pharma
1. Is outsourcing strategically appropriate for your company?
Take the time to consider how outsourcing will slot into your wider manufacturing strategy. Consider what risks, and benefits outsourcing will bring to suppliers, your customers and market, other external service providers, and how they counterbalance with ROI.
Is maximising external capabilities essential, or would a mix of both external and third-party internal support help to enable more core processes and key performance indicator (KPI) achievement?
2. Are your prospective partners reliably flexible and agile?
An agile, and flexible manufacturing process is one that allows prompt response to change while adhering to regulatory guidelines.
If your organisation is undergoing a period of change where new tests, instructions or standard operating procedures are being introduced, traditional outsourcing providers may add another layer of complexity, as all new information will need to undergo validation across both your own internal teams, and the additional outsourced location. Traditional models can contribute to time delays, and add to the risk of liability and communication issues.
Valuable external service providers have a proven track record of agile and flexible manufacturing support where KPIs are still met – even across times of rapid change.
Synergy accomplish this by providing trained teams of scientists on-site, while providing the leadership and management support to ensure their development, without adding to your internal workload. This bespoke model means you can flex the scale of production, and introduce new procedures in a more gradual, and powerful way onto existing methods of working – removing communication barriers and enabling a more direct validation process.
3. Do you have the capacity to manage the outsourcing transition and maintenance?
Companies can unlock the most value from outsourced teams with dedicated capabilities and governance.
It’s important that someone from within your organisation (or a team of people), is on hand to:
- Co-ordinate and manage due diligence site visits
- Provide management support for organisational change management
- Perform periodic risk and compliance audits
- Benchmark operations and identify potential areas for optimisation
- Ensure incentives are aligned and that KPIs are met
- Report progress to executive teams
- Establish a clear decision-making process to help align micro-decisions and ongoing governance with wider business strategy.
4. Can you preserve end-to-end supply chain transparency?
25% of pharma executives say that a lack of visibility into supplier risks is a significant reason behind organisational disruption.
While supply chain risks can be unavoidable, pharmaceutical companies can minimise the potential of disruption by optimising their network of external partners.
Leaders can do this by mapping their suppliers across each tier for a clear, end-to-end view of the entire supply chain, before noting vulnerabilities.
Next, leaders should seek out extra resilience metrics around:
- Data security
- Organisational maturity
Notably, details around exposures beyond supply, including information about regions and climate change, product delivery, and storage are imperative in pharmaceutical manufacture. Small disruptions to transportation can jeopardise the utility of medication; these disruptions are more likely in areas that are prone to climate change and its effects.
5. How will you maintain executive focus?
An effective manufacturing strategy is one that combines all external, and internal aspects of the manufacturing network in the most efficient and appropriate way, while accommodating the needs and requirements of strategic partners.
Executive focus is key across not only planning and approval of outsourcing strategy but implementation. Executive involvement drives the holistic strategic vision behind the outsourcing initiative and adds a crucial layer of value to decision making to accelerate progress.
Establishing a clear structure to ensure that executive buy-in and attention are maintained across the course of the project can help speed up project progress and bolster the success of your external sourcing strategy.
What other options are available?
Resilient pharmaceutical development and manufacturing strategies are customised and optimised to maximise ROI and KPI achievement. This often means combining outsourcing with support from other third-party providers to strengthen efficiencies across the business.
While outsourcing can deliver niche technical expertise and technology to accelerate drug development, hybrid insourcing models combine the benefits of cost efficiency, and resourcing strength to return time to critical internal functions.
At Synergy, our scientific services model equips our clients with a team of trained scientists who work on-site, while being managed and developed by us, to help clients optimise and improve their processes.
We’ve helped some of the largest pharmaceutical organisations in the world strengthen their agility and internal capabilities, by providing comprehensive support models including technical lab operation support, baseline lab operation support, and analytical services all while supporting quality control functions.
Find out how Synergy could help you
At Synergy, we equip global scientific organisations with the expert talent required to drive success, from within.
Our Synergy team are on hand to discuss your resourcing requirements.