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OUTSOURCING
SURVEY
W ELCOME TO OUR 6th Annual CONTRACT PHARMA
Outsourcing Survey! More than 350 sponsor-side respon-
dents offered up their opinions on outsourcing trends for this
Signs of Improvement?
Last year, a whopping 62% of total respondents believed that
they’d spend the same or less on outsourcing spending in
year’s poll. the coming year; this year, that dipped to 55%. Happily, the 10%+
On the following pages, we’ve provided a sample of the find- less spending than previous year” respondents dropped from
ings, focusing mainly on the major outsourcing projections of our to 13%; from 23% last year, while no change increased from to
respondents, broken out by their business categories. Here’s a 29% of all correspondents, from 25% last year.
breakdown of the respondents: Along those lines, 35% of respondents said that they had
cancelled outsourcing projects in the previous year due to
Company Type Job Function
the economy; the same percentage as in our 2009 survey. We
Top 20 Pharma . . . . . . .23.4% R&D . . . . . . . . . . . . . . . .21.5%
added “to reduce company size” to our responses for “Why
Small/Mid-Tier Pharma .18.0% Corp. Mgmt. . . . . . . . . .13.0%
does your company outsource?”; 7% of respondents chose
Generic Pharma . . . . . .10.1% QA/QC/Validation . . . .12.3%
that answer, led by Top 20 Pharma, with 41% of those responses.
Virtual Pharma . . . . . . . .9.8% Project Manager . . . . . . .9.5%
Emerging Biopharma . . . .8.2% Contract Manager . . . . . .6.6%
—GYR
Specialty Pharma . . . . . . .7.0% Purchasing/Sourcing . . . .5.7%
Top 10 Biopharma . . . . . .6.3% Production/Mfg./Pkg. . . . .5.7% Photo courtesy of Fisher Clinical Services
Consumer/ . . . . . . . . . . .3.5% Business Development . .5.7%
OTC Healthcare Marketing/Sales . . . . . . . .5.4%
Other . . . . . . . . . . . . . . .13.6% Clinical Research . . . . . . .4.1%
Supply Chain Manager . . .3.5%
Regulatory Affairs . . . . . .2.5%
Engineering . . . . . . . . . . .1.3%
Other . . . . . . . . . . . . . . . .3.2%
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Past Imperfect
Respondents who report that their outsourcing spending Respondents who report that their outsourcing spending
GREW in the previous year: 43.9% SHRANK in the previous year: 33.9%
WHAT DO THEY DO? WHAT DO THEY DO?
R&D ................................................................................18.5% R&D ................................................................................25.0%
Corporate Management..................................................15.3% QA/QC/validation ............................................................14.6%
QA/QC/Validation ...........................................................10.5% Corporate Management..................................................14.6%
Project Manager .............................................................10.5% Project Manager ...............................................................9.4%
WHAT TYPES OF OUTSOURCING DO THEY MANAGE?* WHAT TYPES OF OUTSOURCING DO THEY MANAGE?*
Analytical & Testing Services .........................................50.0% Analytical & Testing Services .........................................47.9%
Manufacturing: Fill/Finish................................................37.1% Manufacturing: API .........................................................30.2%
Methods Development / Validation.................................37.1% QA/QC ............................................................................30.2%
Process Development / Scale-Up...................................37.1% Formulation Development...............................................29.2%
Stability Studies ..............................................................36.3% CMC................................................................................25.0%
Manufacturing: Solid Dosage .........................................34.7% Methods Development / Validation.................................25.0%
Formulation Development...............................................33.1% Stability Studies ..............................................................25.0%
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Future Shock
Respondents who project that their outsourcing spending Respondents who project that their outsourcing spending
will GROW in the next year: 44.9% will SHRINK in the next year: 26.1%
WHAT DO THEY DO? WHAT DO THEY DO?
R&D ................................................................................20.3% R&D ................................................................................20.3%
Corporate Management..................................................11.7% QA/QC/validation ............................................................14.9%
QA/QC Validation ...........................................................11.7% Corporate Management..................................................13.5%
Project Manager .............................................................10.2% Project Manager .............................................................10.8%
WHAT TYPES OF OUTSOURCING DO THEY MANAGE?* WHAT TYPES OF OUTSOURCING DO THEY MANAGE?*
Analytical & Testing Services .........................................49.2% Analytical & Testing Services .........................................41.9%
Manufacturing: Fill/Finish................................................32.0% Formulation Development...............................................28.4%
Methods Development / Validation.................................32.0% Manufacturing: API .........................................................27.0%
Stability Studies ..............................................................31.3% Process Development / Scale-Up...................................27.0%
Manufacturing: Clinical Trials Materials..........................28.9% Clinical Trials (Phase I-IV) ..............................................25.7%
CMC................................................................................28.1% Manufacturing: Fill/Finish................................................25.7%
Process Development / Scale-Up...................................28.1% Manufacturing: Solid Dosage .........................................25.7%
4 2010 CONTRACT PHARMA OUTSOURCING SURVEY www.contractpharma.com 2010 CONTRACT PHARMA OUTSOURCING SURVEY • Sponsored by Diteba Research Laboratories 5
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Commercial Interruption
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)
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The other 50% said they would describe their outsourcing model as
Tactical (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 year
describe 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.
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CONTRACTING &
OUTSOURCING 2010
CONFERENCE & TABLETOP EXHIBITION
SEPTEMBER 23-24, 2010 • HYATT REGENCY NEW BRUNSWICK
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ONLINE
WWW.CONTRACTPHARMA.COM
IN PRINT
WEEKLY E-NEWSLETTER
CPDIRECT
Outsourcing Decisions
How much did your outsourcing spending WHAT TYPES OF OUTSOURCING DECISIONS ARE YOU INVOLVED IN?*
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I Would Prefer To
46.5% of respondents said that more than half of their outsourcing dollars go to preferred providers.
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• Specific class of APIs • Late stage product • Delayed start of API and CTM manufac-
• Tech transfer to CMO • Delayed non-priority projects turing until toxicology or clinical results
• Analytical services • Clinical manufacturing and packaging became available. Canceled API/CTM
• Synthesis • Nutritional manufacturing if toxicology or trial
• Alternate clinical dosage forms • API Manufacturing results were not as expected.
• Analytical testing • Timelines shifted • Any project that went down in the list on
• Re-packaging and pre-clinical services • Validation support time to market or future values
• BE Studies • Clinical development programs • Tech transfers from one CMO to anoth-
• Phase I API manufacturing • CMC er to consolidate our outsourced base
• Early phase • Development • Discovery programs
• CMC devleopment • Clinical trials • Basic chemistry was normally out-
• Contract synthesis delayed • Small chemistry and pathology services sourced, but a low level of projects led
• Phase III trial and CMO production • Preclinical and CMC to doing the work in house
• Phase II clinical trials • Analytics, clinical trials • Preclinical
• Capital intensive • Tox studies • Bulk biologics manufacturing optimiza-
• Clinical and IND-enabling studies • Scale-up tion
• New product types or innovations • Lower priority candidates • Difficult synthetic projects
• Intermediate and API synthesis • Manufacture of CTM • Specialty formulation development
• Clinical trials • Clinical Trials • Phase I & II
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Cancellation Policy
35% of respondents said that they 65% of respondents said that they
HAVE cancelled an outsourcingproject HAVE NOT cancelled an outsourcingproject
in thepast year duetotheeconomy in thepast year duetotheeconomy
WHAT DO THEY DO? WHAT DO THEY DO?
R&D ................................................................................27.8% R&D ................................................................................19.0%
Corporate Management..................................................20.3% QA/QC/validation ............................................................16.3%
Purchasing/Sourcing.......................................................11.4% Project Manager .............................................................12.9%
QA/QC Validation .............................................................7.6% Corporate Management..................................................12.2%
WHAT TYPES OF OUTSOURCING DO THEY MANAGE?* WHAT TYPES OF OUTSOURCING DO THEY MANAGE?*
Analytical & Testing Services .........................................54.4% Analytical & Testing Services .........................................51.0%
CMC................................................................................39.2% Manufacturing: Fill/Finish................................................32.0%
Process Development / Scale-Up...................................38.0% Methods Development / Validation.................................32.0%
R&D Services .................................................................36.7% Manufacturing: API .........................................................30.6%
Methods Development / Validation.................................35.4% Stability Studies ..............................................................30.6%
Stability Studies ..............................................................35.4% Formulation Development...............................................29.9%
Packaging: Clinical .........................................................34.2% Process Development / Scale-Up...................................27.9%
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More on Cancellations
About those 35% who said they have cancelled outsourcing projects in the past year:
HOW MUCH DID THEIR OUTSOURCING SPENDING HOW MUCH DO THEY EXPECT THEIR OUTSOURCING
CHANGE FROM THE PREVIOUS YEAR? SPENDING TO CHANGE IN THE NEXT YEAR?
10%+ less than previous year ........................................31.6% 10%+ less than last year ................................................15.2%
6-10% less than previous year .........................................8.9% 6-10% less than last year .................................................6.3%
1-5% less than previous year ...........................................6.3% 1-5% less than last year ...................................................3.8%
Did not change ...............................................................13.9% Will not change ...............................................................20.3%
1-5% more than previous year .........................................8.9% 1-5% more than last year ...............................................20.3%
6-10% more than previous year .......................................8.9% 6-10% more than last year .............................................10.1%
10%+ more than previous year ......................................21.5% 10%+ more than last year ..............................................24.1%
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0 1 2 3 4 5 0 1 2 3 4 5
0 1 2 3 4 5 0 1 2 3 4 5
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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
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