Outsourcing is becoming increasingly widespread and essential in the biopharmaceutical industry. Its imprint on biotech world business and on the development of biopharmaceutical drugs is becoming ever more pronounced. It is estimated that almost one-half of biopharmaceutical companies contract out at least part of the production of their products.1 On the other hand, those companies that do not outsource production often contract out some of their development activities.
The biotech contract-manufacturing market has more than doubled in the last three years, from $1 billion in 2000 to almost $3 billion in 2003. Of this outsourcing, approximately 46% is microbial fermentation, 30% mammalian cell culture, 4% transgenic, 12% fill and finish, and 8% services support.1, 2
Michele Antonelli, Ph.D.
The need for outsourcing has intensified during recent years, for three main reasons:
- There is clearly an increased number of biotechnology products. One of the main causes for this increase is the deeper engagement of biotech companies in therapeutic indications — such as oncology and inflammatory diseases — to respond to the changing needs of the world market. Today there are more than 60 products in phase II/III to treat cancer indications.
- There is also a surge in the number of biopharmaceutical companies, which makes the market even more competitive. For the many new actors in the field with limited manufacturing experience, the need for out-sourcing is obvious.
- The advent of biogenerics, the short life span of the current molecules, and the necessity to get early return on investment, have combined to put strong pressure on drug development groups to accelerate speed to market.
WHAT CAN BE OUTSOURCED?
In principle, every step from pre-clinical lead discovery to marketing can be outsourced. This could include each of the activities shown in Table 1, and most long-established biotech companies are likely to have outsourced nearly every single step at least once in their history.
Table 1. Outsourcing Candidates
DO IN-HOUSE OR OUTSOURCE?
Keeping in mind that the main goal of the biotech industry is to ensure product availability at the desired quality to meet worldwide patient demand, each biotech company must eventually answer the following question: "Should our biotech company build our own process development and manufacturing capabilities, which is expensive and lengthy but achievable, or should we rely on external professionals and outsource these activities?" The same question, with a slight bias, can be reformulated as: "Should our company take the chance of transferring a lab-scale process to a multi-product industrial facility, with high risks of initial poor process control or product changes?" or "Should our company outsource only specific activities, i.e., those where the scientific and technical know-how is missing and difficult to build?" These questions underline the fact that outsourcing, like any other major activity, has advantages and drawbacks. These pros and cons are summarized in Table 2.
Table 2. The Pros and Cons of Outsourcing