How pharmaceutical companies can benefit from outsourcing R&D

How pharmaceutical companies can benefit from outsourcing R&D

For the pharmaceutical industry, outsourcing anything more than basic business operations might seem like an intimidating and complicated task – particularly in regards to scientific research. Intellectual property rights are a major factor keeping drug companies from outsourcing their own research initiatives these days. However, such decisions often come at the price of decreased competitiveness in an industry dependent on continuous innovation.

According to a report from the Global Pharmaceuticals and Life Sciences Industry Group at PwC, outsourcing research and development is actually becoming a major trend in the drug industry. Whereas many companies have initially focused on outsourcing non-core functions such as IT to BPO companies, many more have shifted their mindsets in recent years to eventually outsource core operations such as research and manufacturing.

Why are companies finally starting to see the benefit of pharmaceutical companies outsourcing research initiatives? Here are some of the key reasons:

Lower risk
These days, many pharmaceutical companies are reluctant to spend as much as they need to on research and development. Much of the aversion has to do with high risk associated with new research. But when a business delegates its research operations to an outsourcing company, it spreads the risk so that in the event that research ultimately fails, the costs would still be significantly smaller than usual. By spreading the risk, companies can start being more competitive by investing more in the research of new drugs.

Access to new knowledge
According to The Wall Street Journal, pharmaceutical companies can benefit from seeking outside research services when they are in need of access to new knowledge. For example, if current scientific trends lean toward new and unfamiliar technologies, businesses can save money and time by hiring an outsourcing company with more advanced knowledge rather than waiting for their own employees to familiarize themselves and understand how to incorporate the technology into new products.

Lower time-to-market
Regulations from the U.S. Food and Drug Administration are notoriously cumbersome. As a result, many pharmaceutical companies wait years, or even decades, between the research and development phase and the point when the drug finally arrives on the market. Expanding research initiatives globally to an outsourcing company can substantially reduce the amount of time for a drug to arrive at the market.

Future business alliances
Businesses can benefit from outsourcing research and development by establishing long-term business partnerships that can continue through future drug developments, especially at times when intellectual property is loosely protected in the pharmaceutical industry.

Written by Al Pangan

Al Pangan

Al, having almost a decade of experience in the outsourcing industry, brings to the company an expertise in handling and implementing strategies for corporate and resource development. Al started his participation in the industry as a Customer Support agent for international BPO company in 2003 and continued to stay in the field of outsourcing, learning its ins and outs. Al’s extensive experience has a major contribution in paving the way for Infinit-O to offer Research services to its clients. Al was awarded a Department of Science and Technology (DOST) Scholarship, which is one of the prestigious scholarships in the Philippines, upon entering the University of the Philippines.

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