To increase expression levels, they go through a process of codon optimization. Several firms offer the specialized service
of codon optimization based on the selected host cell line. Although it is possible to perform this work in-house, many firms
outsource this function to an outside provider. This is an example of KPO; rather than developing this narrow but highly specialized
skill in-house, the company in question works with an outside group that has invested the resources to add knowledge value.
To create value, both in the short and long terms, pharmaceutical companies need to see the big picture and build an integrated
strategy that balances the advantages against the potential risks from offshoring. KPO entails shifting from simple execution
of standardized processes to carrying out processes that demand advanced analytical and technical skills as well as decisive
judgment. KPO projects are typically marked by a higher level of control, confidentiality, and enhanced risk management. Laxity
in any of these parameters can jeopardize or nullify the expected strategic value.
Current outsourcing practices of many pharmaceutical companies are overly conservative, and project management practices are
sub-optimal. As the Boston Consulting Group concluded in a recent report, Looking Eastward: Tapping China and India to Reinvigorate the Global Biopharmaceutical Industry, companies that carefully implement an integrated and deliberate strategy will have the greatest advantage in the future.9
Hazel Aranha, PhD, is president of GAEA Resources, Inc., Northport, NY, 631.261.4665, firstname.lastname@example.org
. Scott M. Wheelwright, PhD, is founder and CEO of Strategic Manufacturing Worldwide, Saratoga, CA, 408.420.5352, email@example.com
1. Pandey A, Aggarwal A, Devane R, Kuznetsov Y. India's transformation to knowledge-based economy—Evolving role of the diaspora.
Gurgaon, India: Evalueserve; 2004.
2. Knowledge process outsourcing—An emerging opportunity. Gurgaon, India: Kelly Services; 2006.
3. McCaughan M. The approval drought. In Vivo. 2006 Feb 1;63.
4. Owens J. 2006 drug approvals: Finding the niche. Nature Reviews Drug Discovery. 2007 Feb;99–101.
5. DiMasi JA, Hansen RW, Grabowski HG. The price of innovation: new estimates of drug development costs. J Health Econ. 2003
6. Morris K, Venugopal S, Eckstut M. Making the most of drug development data. PharmaManufacturing. 2005 November 30;4(10):16–23.
7. Innovation 2006. Boston: Boston Consulting Group; 2006.
8. Expression Optimization. DNA 2.0 Inc.; 2004 [cited 2007 Mar 3]. Available from:
9. Looking eastward: Tapping China and India to reinvigorate the global biopharmaceutical industry. Boston MA: Boston Consulting