Consequently, big pharmaceutical companies are becoming more interested in the biologics arena, as evidenced by the continuing increase of mergers and acquisitions within the biopharmaceuticals industry.3 Pfizer, Wyeth, and Bristol-Meyers Squibb are just a few exemplifying this trend by announcing acquisitions of small biotech companies and heavy investments in biopharmaceutical manufacturing facilities.
Additionally, blockbuster biologics worth over $16.4 billion annually are facing patent expiration by 2011. The biogenerics drug market is expected to boom, inciting enormous pressures on biopharmaceutical companies to keep prices low to remain competitive. This pressure will drive companies to find methods to further lower the cost of goods (COGS) sold, something the traditionally not very important for biopharmaceutical manufacturers.In this context, biopharmaceutical companies can no longer afford to ignore the manufacturing savings that can result from achieving excellence in process development. Here, we examine why process development is a critical component of biotherapeutics manufacturing, the benefits of outsourcing process development, and the criteria used by companies when selecting a contractor.
WHY OUTSOURCE PROCESS DEVELOPMENT?
Recent pharmaceutical industry critiques reiterate the need for industry to reduce the COGS to remain viable. Profitability, productivity, and improved speed of development have been identified as primary targets for refinement. Although these concepts are nothing new, it is apparent an entire paradigm shift is now needed to address these issues adequately.
The key to any successful business stems from the fundamental economic principle: "The efficient use of limited resources for the purpose of attaining maximum satisfaction for the production of goods and services."4 This basic principle is applicable to both tangible and non-tangible resources. All resources are limited and must be rationalized.
It has long been conventional for organizations to outsource non-core business functions as a matter of workload management. However, increasing pressures on return on investment (ROI), resulting from the factors described above, means organizations today must be even more business savvy than ever and attain operational excellence across all functional units.
Organizations are becoming increasingly aware that they do not have all the specialized skill sets they need in-house and that often, outsourced contractors can do certain tasks better. As a result, biopharmaceutical companies are turning to outsourcing knowledge, instead of simply outsourcing tasks.5 A key example of outsourcing know-how is outsourcing process development.