Outsourcing partners to facilitate drug discovery

The European drug discovery outsourcing market is forecast to expand from $3.2 billion in 2004 to $5.1 billion by 2011.

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LONDON—The European drug discovery outsourcing market is forecast to expand from $3.2 billion in 2004 to $5.1 billion by 2011. This, according to a recent market report from Frost & Sullivan, "European Drug Discovery Outsourcing Market."
 
By 2010, more than 40 percent of R&D is projected to be outsourced to more specialized firms in order to efficiently maintain a strong and vital pipeline for new blockbuster drugs. As the European drug discovery outsourcing market expands, firms which are able to reach out to focussed, research-orientated speciality companies that complement their traditional processes, are poised to emerge as leaders.
 
The reasons behind the move to increased outsourcing are many. Lengthy drug discovery times and the soaring costs of drug development—currently estimated at approximately US$800 million—are putting pharmaceutical and biotechnology firms under immense pressure. Intensifying this strain are increasingly complex clinical trial requirements and high drug failure rates which currently translates to only 15 percent of new drugs entering development expected to reach the market. To control rising costs and generate new breakthroughs therefore, companies are looking to outsource their drug discovery processes.
 
 "Outsourcing may be one strategy to adopt, which allows companies to control and utilize their R&D expenditure more effectively," says Dr. Amarpreet Dhiman, research analyst at Frost & Sullivan. "Also, despite cost efficiency being a contributing factor to encourage outsourcing, the impact of genomics and proteomics in therapeutics has also resulted in an increasing awareness of the benefits of outsourcing."
 
As a result, pharma companies are increasingly eager to form alliances with biotechnology firms, university research centres, contract research organizations (CROs), specialized niche vendors and general service providers. Such partnerships are facilitating the drug discovery process.
 
For instance, CROs provide expert geographic coverage enabling companies to allow clinicians of different locations to simultaneously view and discuss data, resulting in improved testing and turn-around times, and ultimately enhanced data quality.
 
"Outsourcing can complement the in-house level of expertise and experience, giving access to technological innovations, thus leading to reduced complexities within R&D, providing rapid access to greater R&D resources, therapeutic expertise, and bring about alignment with diagnostic testing for safer and more effective therapies," remarks Dhiman. "This represents an important driver in addition to improvements in efficiency, cost and speed by removing conventional habits and processes."
 
Consequently, the scope of outsourcing has expanded with the trend to outsource processes such as finance/accounting, clinical trial data management, drug manufacturing, logistics and human resources and parts of IT gaining momentum.


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