Pharmaceutical companies turn to R and D outsourcing

An increasing number of drug firms are outsourcing research and development to cut costs, according to analysts Frost & Sullivan.

The firm estimates that drug development typically costs pharmaceutical companies around $800 million (?465 million), with failures and complex clinical drug trial regulations adding to the strain on firms. As a result, many are looking to outsourcing drug development.

Firms are now happy to form alliances with contract research organisations (CROs), university research centres, biotech companies and other entities which can facilitate the drug development process.

Frost and Sullivan said that outsourcing could “complement” expertise already honed internally.

“Outsourcing may be one strategy to adopt, which allows companies to control and utilise their R&D expenditure more effectively,” said Dr Amarpreet Dhiman, analysts at Frost & Sullivan.

“Outsourcing can complement the in-house level of expertise and experience… thus leading to reduced complexities within R&D, providing rapid access to greater R&D resources, therapeutic expertise, and bring about alignment with diagnostic testing for safer and more effective therapies,” he added.

The drug outsourcing market is expected to be valued at $5.1 billion (?3 billion) by 2011, up from $3.2 billion (?1.9 billion) in 2004.

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