“From managing large scale R&D projects – testing product safety, monitoring reports, clinical data management and clinical development activities – and from supply chain networks to even leading on customer service, outsourcing has become an integral part of the way large, multinational pharmaceutical companies are run,” says Sanjiv Gossain, Cognizant Senior Vice President and head of UK & Ireland.
Although figures released this week by TPI state that investment in Pharmaceutical Outsourcing is down % from $6.3 bn to $2.6 bn, this reinforces Everest Research’s comments earlier this year: “The spike we saw in 2010 was largely the result of pent up demand from the recessionary economy. However, the business drivers for outsourcing adoption remain and continue to evolve. Cost pressures, a changing pharma ecosystem, emerging markets and other market forces are continuing to drive the market. Moving forward, we expect to see an increase in sourcing of drug development and research, supply chain, data management and analytics functions.”
BPO, in other words. Outsourcing of non-core business processes sits well with the pharmaceutical industry, as it always desperate for any development that will speed up time to market. As Pharma has a long R&D cycle, outsourcing of things such as sales force automation and back-office functions – anything that will get the drug on the shelves quicker - is readily accepted.
As a result, says Duncan Aitchison of TPI: “Companies in the Drugs & Biotechnology sector tend to invest more heavily in BPO services, particularly industry-specific solutions. Take up of BPO outsourcing is led by Finance & Accounting (28% of companies), HRO (20%) and Procurement (20%). Other activities include specialist business processes such as Pharmacovigilance, Clinical Trials and Lab Automation.”
According to Everest, “firms have increasingly outsourced drug development process work as well as F&A, human resources and procurement.” This increase in R&D outsourcing has seen a rise in pharmaceutical-specific service providers such as Advinus, inVentive Health, PDI, Publicis Touchpoint Solutions and ZS Associates.
Not to be outdone, massive outsourcing players are finding innovative ways to enter the fray.
“AstraZeneca has taken an innovative approach to responding to the NHS’ changing needs and we’re delighted to be a part of that,” says Mark Brown, Managing Director, Contact Centres & Loyalty, arvato UK. Arvato will to design and manage a new support and information service for healthcare professionals. From the beginning of March, a team of ABPI (Association of British Pharmaceutical Industry) accredited Customer Service Agents - based on-site at AstraZeneca’s UK Marketing Company headquarters in Luton - will enable AstraZeneca to offer healthcare professionals the opportunity to engage in telephone dialogue about AZ’s medicines and value-added services. “We are looking forward to helping AstraZeneca retain, support and grow its existing relationships, as well as develop new relationships, with healthcare professionals,” said Mark Brown.
Arvato has long been involved in the pharma space. For the last 18 years, they have partnered with Beckman Coulter, one of the world’s leading manufacturers of systems and consumables in the field of clinical diagnostics and life sciences. Arvato provides Beckman Coulter with a customised distribution solution service. The in-vitro diagnostic industry has special needs regarding specific cold chain requirements and the handling of hazardous materials. To do this, Arvato faces the challenge of guaranteeing global export shipments comply with the latest regulations and strict packaging requirements for transporting sensitive medical products and hazardous materials.
This is a prime is example of how the healthcare industry is very different, and major outsourcing suppliers need both flexible structures and cross-industry expertise to succeed in a heavily regulated environment (and rules are often rewritten, don’t forget!).
Duncan Aitchsion says: “The costs associated with healthcare reform and expected revenue loss when patents expire have been strong motivating factors for companies to build up and speed up new product development pipelines.”
As we all know, when companies need it faster, slicker, cheaper – outsourcing is the answer. Investment in pharmaceutical outsourcing was so abundant in 2010, it comes as no surprise that there has been a drop off in 2011. sourcingfocus.com predicts that, as the most common outsourcing drivers are so prevalent in the pharma industry, the drop is a blip, and and investment in pharmaceutical outsourcing contract will bounce back with a vengeance over the next 12 months.
