outsourcing survey - glp quality consultingglpqualityconsulting.com/yahoo_site_admin/assets/...14...

WELCOME TO OUR 6th Annual CONTRACT PHARMAOutsourcing Survey! More than 350 sponsor-side respon-

dents offered up their opinions on outsourcing trends for thisyear’s poll.On the following pages, we’ve provided a sample of the find-

ings, focusing mainly on the major outsourcing projections of ourrespondents, broken out by their business categories. Here’s abreakdown of the respondents:

Signs of Improvement?Last year, a whopping 62% of total respondents believed thatthey’d spend the same or less on outsourcing spending inthe coming year; this year, that dipped to 55%. Happily, the 10%+less spending than previous year” respondents dropped fromto 13%; from 23% last year, while no change increased from to29% of all correspondents, from 25% last year.Along those lines, 35% of respondents said that they had

cancelled outsourcing projects in the previous year due tothe economy; the same percentage as in our 2009 survey. Weadded “to reduce company size” to our responses for “Whydoes your company outsource?”; 7% of respondents chosethat answer, led by Top 20 Pharma,with 41% of those responses.

—GYR

Photo courtesy of Fisher Clinical Services

CompanyTypeTop 20 Pharma . . . . . . .23.4%Small/Mid-Tier Pharma .18.0%Generic Pharma . . . . . .10.1%Virtual Pharma . . . . . . . .9.8%Emerging Biopharma . . . .8.2%Specialty Pharma . . . . . . .7.0%Top 10 Biopharma . . . . . .6.3%Consumer/ . . . . . . . . . . .3.5%OTC Healthcare

Other . . . . . . . . . . . . . . .13.6%

Job FunctionR&D . . . . . . . . . . . . . . . .21.5%Corp. Mgmt. . . . . . . . . .13.0%QA/QC/Validation . . . .12.3%Project Manager . . . . . . .9.5%Contract Manager . . . . . .6.6%Purchasing/Sourcing . . . .5.7%Production/Mfg./Pkg. . . . .5.7%Business Development . .5.7%Marketing/Sales . . . . . . . .5.4%Clinical Research . . . . . . .4.1%Supply Chain Manager . . .3.5%Regulatory Affairs . . . . . .2.5%Engineering . . . . . . . . . . .1.3%Other . . . . . . . . . . . . . . . .3.2%

ANNUALOUTSOURCING

SURVEY

ANNUALOUTSOURCING

SURVEY

http://www.diteba.com/


2010 OUTSOURCING SURVEY

2010 CONTRACT PHARMA OUTSOURCING SURVEY • Sponsored by Diteba Research Laboratories 32 2010 CONTRACT PHARMA OUTSOURCING SURVEY www.contractpharma.com


Respondents who report that their outsourcing spendingGREW in the previous year: 43.9%

WHAT DO THEY DO?R&D ................................................................................18.5%Corporate Management..................................................15.3%QA/QC/Validation ...........................................................10.5%Project Manager .............................................................10.5%

WHERE DO THEY WORK?Top 20 Pharma...............................................................28.2%Small/Mid-Tier Pharma...................................................16.1%Virtual Pharma................................................................14.5%Generic Pharma................................................................8.9%

WHAT TYPES OF OUTSOURCING DO THEY MANAGE?*Analytical & Testing Services .........................................50.0%Manufacturing: Fill/Finish................................................37.1%Methods Development / Validation.................................37.1%Process Development / Scale-Up...................................37.1%Stability Studies ..............................................................36.3%Manufacturing: Solid Dosage .........................................34.7%Formulation Development...............................................33.1%

Respondents who report that their outsourcing spendingSHRANK in the previous year: 33.9%

WHAT DO THEY DO?R&D ................................................................................25.0%QA/QC/validation ............................................................14.6%Corporate Management..................................................14.6%Project Manager ...............................................................9.4%

WHERE DO THEY WORK?Small/Mid-Tier Pharma...................................................19.8%Top 20 Pharma...............................................................16.7%Generic Pharma..............................................................12.5%Top 10 Biopharma ............................................................9.4%

WHAT TYPES OF OUTSOURCING DO THEY MANAGE?*Analytical & Testing Services .........................................47.9%Manufacturing: API .........................................................30.2%QA/QC ............................................................................30.2%Formulation Development...............................................29.2%CMC................................................................................25.0%Methods Development / Validation.................................25.0%Stability Studies ..............................................................25.0%

Past Imperfect

* Respondents can select multiple answers for this category)

http://www.contractpharma.com





Respondents who project that their outsourcing spendingwill GROW in the next year: 44.9%

WHAT DO THEY DO?R&D ................................................................................20.3%Corporate Management..................................................11.7%QA/QC Validation ...........................................................11.7%Project Manager .............................................................10.2%

WHERE DO THEY WORK?Top 20 Pharma...............................................................29.7%Small/Mid-Tier Pharma...................................................16.4%Virtual Pharma................................................................12.5%Generic Pharma..............................................................10.9%

WHAT TYPES OF OUTSOURCING DO THEY MANAGE?*Analytical & Testing Services .........................................49.2%Manufacturing: Fill/Finish................................................32.0%Methods Development / Validation.................................32.0%Stability Studies ..............................................................31.3%Manufacturing: Clinical Trials Materials..........................28.9%CMC................................................................................28.1%Process Development / Scale-Up...................................28.1%

Respondents who project that their outsourcing spendingwill SHRINK in the next year: 26.1%

WHAT DO THEY DO?R&D ................................................................................20.3%QA/QC/validation ............................................................14.9%Corporate Management..................................................13.5%Project Manager .............................................................10.8%

WHERE DO THEY WORK?Top 20 Pharma...............................................................20.3%Small/Mid-Tier Pharma...................................................18.9%Generic Pharma..............................................................12.2%Emerging Biopharma......................................................10.8%

WHAT TYPES OF OUTSOURCING DO THEY MANAGE?*Analytical & Testing Services .........................................41.9%Formulation Development...............................................28.4%Manufacturing: API .........................................................27.0%Process Development / Scale-Up...................................27.0%Clinical Trials (Phase I-IV) ..............................................25.7%Manufacturing: Fill/Finish................................................25.7%Manufacturing: Solid Dosage .........................................25.7%

Future Shock







Of the respondents who say that their companies outsource at least 50% of their commercial manufacturing . . .

59.4% report that more than half of their outsourcing dollars go to preferred providers

78.1% report that their company have never received a warning letter due to an inspection at a CMO

51.6% either probably or definitely will not outsource a project to Asia in the next year

81.3% are would use the word “partnership” to describe their relations with a provider

31.7% report that they have canceled or delayed outsourcing projects in the past year, due to the economy

are most likely to work at a Virtual Pharma (32.8% of respondents), and also predominantly

outsource more than half of clinical materials (85.2% of respondents) and APIs (88.9% of respondents)

Commercial Interruption






Ups and Downs50% of all respondents said that they describe their outsourcing model as

Strategic (entire classes of functions performed out-of-house), down from 55% last year.

The other 50% said they would describe their outsourcing model asTactical (case-by-case, based on availability).

Virtual Pharma companies were most likely to call their relationship Strategic (70%),while Small/Mid-Tier Pharma was most likely to call their relationship Tactical (63%).

The largest group to say it will do 10+% more outsourcing next yeardescribe their companies as Top 20 Pharma, at 28%.

That was also the demographic that said it will do 10+% less outsourcing in the next year,with 19% of the responses to that question.

8% of respondents said that their companies hadreceived a regulatory warning letter because of an inspection at a CMO;

72% said they had not and 20% were not certain.






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14 2010 CONTRACT PHARMA OUTSOURCING SURVEY www.contractpharma.com


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How much did your outsourcing spendingchange in the past year?

(by outsourcing decision)Total

Analytical & Testing Services .........................................46.5%Formulation Development...............................................28.8%Stability Studies ..............................................................28.2%Manufacturing: Fill/Finish................................................27.8%Process Development / Scale-Up...................................27.8%Methods Development / Validation.................................27.8%Manufacturing: API .........................................................27.5%CMC................................................................................26.6%Manufacturing: Solid Dosage .........................................25.9%Clinical Trials (Phase I-IV) ..............................................25.9%R&D Services .................................................................25.3%QA/QC ............................................................................25.3%Manufacturing: Clinical Trials Materials..........................24.7%Chemistry........................................................................21.2%Manufacturing: Injectable Dosage ..................................21.2%Manufacturing: Biologics, Finished Dosage ...................20.3%Drug Delivery Systems ...................................................19.9%

Packaging: Clinical .........................................................19.6%Manufacturing: Biologics, Bulk .......................................19.3%Regulatory Filing.............................................................18.7%Manufacturing: Parenterals.............................................18.7%Packaging: Commercial..................................................18.4%Validation Services .........................................................17.7%Labeling ..........................................................................17.1%Supply Chain Management ............................................16.1%Preclinical / Toxicology ...................................................14.6%Microbiology....................................................................13.6%Sterility Testing ...............................................................12.3%Manufacturing: Oral Liquid Dosage................................12.0%Logistics..........................................................................11.4%Manufacturing: High Potency .........................................11.4%Clinical Logistics ...............................................................9.2%Sales.................................................................................8.9%IT ....................................................................................5.4%

Outsourcing Decisions

WHAT TYPES OF OUTSOURCING DECISIONS ARE YOU INVOLVED IN?*

* Respondents can select multiple answers for this category






WHAT DO THEY DO?Marketing/Sales ..............................................................29.4%Project Manager .............................................................23.5%R&D ................................................................................11.8%Business Development ...................................................11.8%

WHERE DO THEY WORK?Top 20 Pharma...............................................................41.2%Top 10 Biopharma ..........................................................17.6%Small/Mid-Tier Pharma...................................................11.8%Specialty Pharma............................................................11.8%

WHAT TYPES OF OUTSOURCING DO THEY MANAGE?*Analytical & Testing Services .........................................29.4%Clinical Trials (Phase I-IV) ..............................................29.4%Sales...............................................................................29.4%CMC................................................................................23.5%Manufacturing: Biologics, Finished Dosage ...................23.5%Packaging: Clinical .........................................................23.5%Stability Studies ..............................................................23.5%

HOW MUCH DID THEIR OUTSOURCING SPENDINGCHANGE FROM THE PREVIOUS YEAR?

10%+ less than previous year ........................................17.6%6-10% less than previous year .........................................5.9%Did not change ...............................................................29.4%1-5% more than previous year .......................................11.8%6-10% more than previous year .......................................5.9%10%+ more than previous year ......................................29.4%

HOW MUCH DO THEY EXPECT THEIR OUTSOURCINGSPENDING TO CHANGE IN THE NEXT YEAR?

10%+ less than last year ................................................17.6%1-5% less than last year ...................................................5.9%1-5% more than last year ...............................................47.1%10%+ more than last year ..............................................29.4%

Reduce, Reuse, RecycleThis year, we added “To reduce company size” to our list of responses to the question, “Why do you outsource?”

Only 7.2% of that question’s respondents chose that answer, so the sample set isn’t much to go on.Still, here’s a little info about that group.







WHAT DO THEY DO?R&D ................................................................................23.5%QA/QC Validation ...........................................................15.1%Project Manager .............................................................11.8%Corporate Management..................................................10.1%

WHERE DO THEY WORK?Top 20 Pharma...............................................................24.4%Small/Mid-Tier Pharma...................................................17.6%Virtual Pharma................................................................13.4%Specialty Pharma..............................................................9.2%

WHAT TYPES OF OUTSOURCING DO THEY MANAGE?*Analytical & Testing Services .........................................59.7%Stability Studies ..............................................................37.0%Methods Development / Validation.................................36.1%QA/QC ............................................................................33.6%Process Development / Scale-Up...................................32.8%Manufacturing: Fill/Finish................................................31.9%R&D Services .................................................................31.9%


10%+ less than previous year ........................................16.8%6-10% less than previous year .........................................4.2%1-5% less than previous year ...........................................5.9%Did not change ...............................................................21.8%1-5% more than previous year .......................................14.3%6-10% more than previous year .....................................14.3%10%+ more than previous year ......................................22.7%


10%+ less than last year ..................................................8.4%6-10% less than last year .................................................5.9%1-5% less than last year ...................................................5.0%Will not change ...............................................................31.9%1-5% more than last year ...............................................17.6%5-10% more than last year .............................................12.6%10%+ more than last year ..............................................18.5%

I Would Prefer To

46.5% of respondents said that more than half of their outsourcing dollars go to preferred providers.







• Specific class of APIs• Tech transfer to CMO• Analytical services• Synthesis• Alternate clinical dosage forms• Analytical testing• Re-packaging and pre-clinical services• BE Studies• Phase I API manufacturing• Early phase• CMC devleopment• Contract synthesis delayed• Phase III trial and CMO production• Phase II clinical trials• Capital intensive• Clinical and IND-enabling studies• New product types or innovations• Intermediate and API synthesis• Clinical trials

• Late stage product• Delayed non-priority projects• Clinical manufacturing and packaging• Nutritional• API Manufacturing• Timelines shifted• Validation support• Clinical development programs• CMC• Development• Clinical trials• Small chemistry and pathology services• Preclinical and CMC• Analytics, clinical trials• Tox studies• Scale-up• Lower priority candidates• Manufacture of CTM• Clinical Trials

• Delayed start of API and CTM manufac-turing until toxicology or clinical resultsbecame available. Canceled API/CTMmanufacturing if toxicology or trialresults were not as expected.

• Any project that went down in the list ontime to market or future values

• Tech transfers from one CMO to anoth-er to consolidate our outsourced base

• Discovery programs• Basic chemistry was normally out-

sourced, but a low level of projects ledto doing the work in house

• Preclinical• Bulk biologics manufacturing optimiza-

tion• Difficult synthetic projects• Specialty formulation development• Phase I & II

Why Not Outsource?More than a third of our respondents said that they’d cancelled outsourcing projects in past year,

due to the economic climate. We asked them to describe the projects they delayed.






• API• Eary stage raw material only -

Pre-Starting material• Chemistry services (<1 kg) or advanced

intermediate (>5 kg, non-cGMP)• Clinical trials• Bulk drug intermediates and APIs• API• Solid dosage chemical• Pilot clinical study and possibly

API sourcing• Bioanalytical method transfer &

validation as a feasibility exercise• All projects• Manufacturing• Molding parts• Preclinical PK studies• Non-GLP• CMO and release testing• Currently we are already outsourcing

API and manufacturing• Custom raw materials and intermediates

• IT• Formulation development• Manufacturing for market access in Asia• Intermediates development• Very competitive generic

manufacturing requirements• API raw material synthesis• stability• Formulations from India• Pharmacovigilance• Established product• API and API intermediates to Asia –

no drug product!• Second line• Formulation and analytical development• Biologic manufacture• Phase I• Analytical chemistry• Ones where cost is a driver• Basic stability and formulation work• CNS• Simple, early stage only

• Commercial manufacturing• Lower risk projects where the cost

savings are big enough to justify the risk• Low IP, commodity product• Medicinal chemistry• Clinical trials & CMC• Small Molecules• Criteria has not been defined as yet• Follow-on biologic• Toxicology• Fill/Finish• Project without proprietary know-how• Exploratory work• Low IP risks• Non-GxP, discovery support• Development projects a few steps away

from the API• Only as a test• Clinical trial management and discovery

work• Clinical supply or testing for local market• Less quality critical projects

What sort of project would you becomfortable with outsourcing to Asia?

Note: Some respondents who said they were likely to outsource projects to Asia declined to provide an example.“API” or some variety thereof was the most common response.




2010 CONTRACT PHARMA OUTSOURCING SURVEY • Sponsored by Diteba Research Laboratories 33

0 25 50 75 100



0.00% 0.25% 0.50% 0.75% 1.00%

0.00% 0.25% 0.50% 0.75% 1.00%






35% of respondents said that theyHAVE cancelledan outsourcingproject

in thepast year duetotheeconomy

WHAT DO THEY DO?R&D ................................................................................27.8%Corporate Management..................................................20.3%Purchasing/Sourcing.......................................................11.4%QA/QC Validation .............................................................7.6%

WHERE DO THEY WORK?Small/Mid-Tier Pharma...................................................22.8%Top 20 Pharma...............................................................19.0%Specialty Pharma............................................................11.4%Generic Pharma..............................................................10.1%

WHAT TYPES OF OUTSOURCING DO THEY MANAGE?*Analytical & Testing Services .........................................54.4%CMC................................................................................39.2%Process Development / Scale-Up...................................38.0%R&D Services .................................................................36.7%Methods Development / Validation.................................35.4%Stability Studies ..............................................................35.4%Packaging: Clinical .........................................................34.2%

65% of respondents said that theyHAVE NOT cancelledan outsourcingproject

in thepast year duetotheeconomy

WHAT DO THEY DO?R&D ................................................................................19.0%QA/QC/validation ............................................................16.3%Project Manager .............................................................12.9%Corporate Management..................................................12.2%

WHERE DO THEY WORK?Top 20 Pharma...............................................................23.1%Small/Mid-Tier Pharma...................................................16.3%Virtual Pharma................................................................12.9%Generic Pharma..............................................................10.2%

WHAT TYPES OF OUTSOURCING DO THEY MANAGE?*Analytical & Testing Services .........................................51.0%Manufacturing: Fill/Finish................................................32.0%Methods Development / Validation.................................32.0%Manufacturing: API .........................................................30.6%Stability Studies ..............................................................30.6%Formulation Development...............................................29.9%Process Development / Scale-Up...................................27.9%

Cancellation Policy








10%+ less than previous year ........................................31.6%6-10% less than previous year .........................................8.9%1-5% less than previous year ...........................................6.3%Did not change ...............................................................13.9%1-5% more than previous year .........................................8.9%6-10% more than previous year .......................................8.9%10%+ more than previous year ......................................21.5%


10%+ less than last year ................................................15.2%6-10% less than last year .................................................6.3%1-5% less than last year ...................................................3.8%Will not change ...............................................................20.3%1-5% more than last year ...............................................20.3%6-10% more than last year .............................................10.1%10%+ more than last year ..............................................24.1%

More on CancellationsAbout those 35% who said they have cancelled outsourcing projects in the past year:

48.1% of them said that they outsource to focus on core competencies.

Only 8.9% said that they outsource to reduce company size.





0 1 2 3 4 5 0 1 2 3 4 5

0 1 2 3 4 5 0 1 2 3 4 5







0 1 2 3 4 5 0 1 2 3 4 5

0 1 2 3 4 5 0 1 2 3 4 5



0 1 2 3 4 5 0 1 2 3 4 5

0 1 2 3 4 5 0 1 2 3 4 5





What is your biggest complaint aboutContract Service Providers you’ve worked with in the past?

Here’s an edited selection of what our respondents had to say.“Timeliness / On-Time delivery”was the #1 complaint, with “Quality issues” running a close second.

• Misrepresentation of capabilities• Asian CSPs not adhering to timelines• Timeline commitments and GMP complaince on shop floor,

both with manufacturing and QA/QC• Audit scheduling• Don't stick to timelines agreed upon up front• Unreliable supply• Late with reports• Missed protocol activities• Keeping projects on schedule• Reliability• Failure to deliver in a timely manner• Timeliness• Staff turnover• Prompt communication of problems• Over-promising• For some CSPs, GMP concepts and practices not "current"

with industry and regulatory trends• Faster communication and feedback.• Lack of stability of employees at a CRO• Cost• The cost and time at time of bid is markedly different from

the final outcome• Lack of responsiveness• Ease of doing business• Attrition and retraining• Poor quality• Do not take ownership of projects• Product quality• Communication issues• Lack of effective communication about a project’s progress• Poor project management• On-time delivery• Not reliable• Needs too much hand-holding and management• Quality and yield• Overcommitment• The committment• Cost increases• Big gaps between claims and actual capabilities

during initial discussions• Conformance to tech transfer schedules and late deliveries• Over budget and longer than promised timelines• Priorities driven by the almighty $ rather than relationship• Poor quality and CGMP adherence• Mis-communication.• Data transfer• Not meeting timelines• Flexibility• Lack of commitment to the sponsor's needs• Not dedicating seasoned personnel to our project• Lack of information sharing.• Understanding flexibility needed for clinical work

• Poor contingency planning• Lack of open-book pricing• Time to release results• Increasing costs of services• Start-up is always great but close-down is always

a tough time• Poor communication• Internal vs. external focus• Contamination issues• Ability to turn work over quickly• Unresponsive or minimal response to suggestions• Lack of experience in a key area that was originally stated

to be a competency• Changes in project scope• Not service oriented• Expectations not consistent with actual results• Not being able to talk to the person doing the work• Insufficent technical resources• Lack of ownership of the project• Their inability to view the alliance as a partnership• Communication gaps• Increasing study budgets; CRO was not willing to take

responsibility for its own feasibilities.• Delay of the API delivery• Billed for work not in the protocol• Incremental charges• Schedules• Quality• On-time delivery• Inability to understand customer needs fully• We don’t have too many complaints, but with those

providers that we decided not to use again, there wasan inability to meet timelines, a lack of understandingof what it takes to get a NCE into Phase III, and weakanalytical know-how

• Failure to be transparent about issues• Inability to translate provided study designs into appropriate

time and cost proposals• Under-resourced• Lack of awareness of cGMP• Lack of established and reproducibile business systems• Contract / agreement negotiations too long• Lack of communication• Incomplete quotes• Rarely take an owner's perspective• Making changes without providing notification• Too hard to set up and work with each one individually• Inability to say NO• Slow response to inquiries (poor communication).• Maintaining attention to small customer.• Higher cost / lower quality than the hype for outsourcing in

India/China




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