27 May 2014
Drug discovery and production have always been notoriously difficult, with the odds stacked against any chance of success. It costs on average £550 million to get a new pharmaceutical product to market, and the process can take 10 to 15 years. Only two out of every ten marketed drugs will ever recoup the money initially spent on R & D. In addition, many large pharmaceutical firms are facing the dual difficulties of patent expiries and weak pipelines, so, regardless of the global economic situation, cost-saving measures are a key driver for change.
This has led to more companies reducing their direct involvement in the initial stages of the drug life cycle, and playing to their strengths in the later stages of the process, including financing, late-stage development, marketing and distribution. In order to make this shift, Contract Research Organisations (CROs) are increasingly engaged, which can result in reduced costs. The whole process can be quicker due to the option to conduct parallel development. Other benefits of outsourcing include an increase in flexibility, and an expansion in capabilities due to the access to immediate increased expertise and facilities.
There has been a huge change in the way outsourcing has been viewed, managed and utilised recently, with relationships between clients and service-providers changing, especially in light of the recent global recession. Over 40% of the discovery and development processes of pharmaceutical and biotechnology companies are now carried out by CROs.
Currently, temporary contracts are the norm, but there is an ongoing evolution to partnerships that are conducted in a more long-term fashion. The latter relationship can be of more benefit to larger clients, as smaller companies can lack the volume of business required. The partnership model can in turn provide increased stability to the CRO.
CROs can choose to offer a wide range of services, or to retain a niche specialism which they can provide unparalleled expertise in. At the moment, CROs are split into those who provide skills in early stage drug discovery, formulation, scale-up or clinical trials.
Of course, as with anything, there can be pitfalls in this new business model, which need to be risk assessed. Care should be taken in negotiating intellectual property rights. Communication, particularly in respect to expectations, needs to be carefully conducted, and if the CRO is in another country, this can further be complicated by language, culture and time zone complexities. Due to the fast-developing nature of the use of CROs, there can be unknown risks inherent in the approach, as it is not fully tried and tested.
A one day event covering these issues and more, entitled 'The Secrets of Success: CRO views of successful outsourcing', will take place at the newly-refurbished SCI headquarters in Belgrave Square, London on Tuesday 30 September 2014. The particular focus will be on outsourcing in the pharmaceutical industry from the perspective of the suppliers, incorporating drug discovery through to development.
The topics covered will give an insight into how contract relationships have worked in the past, and will provide an opportunity to learn from experts in the field, including advice on how to avoid common pitfalls. Speakers from JD International Consulting, Axxam, Galapagos, Pharmidex, AMRI and P1Vital will share their expertise. In the morning session, there will also be an insight into funding from the Wellcome Trust.
The day will be rounded off with a wine reception, which will provide an ideal opportunity to network with all those with an interest in outsourcing, including representatives from CROs themselves.
This event is organised by SCI's Fine Chemicals Group and the RSC's Biological and Medicinal Chemistry Sector, and supported by the SCI's Science and Enterprise Group. The event sponsors include some of the main CROs in the UK and Europe - Almac Discovery, Evotec, Peakdale Molecular, Takeda, Key Organics, Syncom, P1vital, Sygnature Discovery, Clauson-Kaas Chemical Research Laboratory, Argenta, BioFocus, Fidelta, AXXAM, Tocris Bioscience, Domainex and Reach Separations.
Dr Susan Brittain