Contract Development and Maintenance of Pharmaceutical Industry Software

Outsourcing in the Pharmaceutical Industry: Current Trends

The pharmaceutical industry has a well-established history of collaborating with external parties and taking advantage of external expertise (such as software outsourcing). According to The Wall Street Journal, 30% of the medications developed by the top 10 pharmaceutical companies were discovered by researchers from other organisations. However, due to rising market pressures, the pharmaceutical sector is increasingly relying on external vendors for their services.

It is predicted by Nice Insight that the pharmaceutical industry will see a significant rise in expenditure on outsourced services over the next five years. Outsourcing has become increasingly popular amongst pharmaceutical and biotechnology companies; the proportion of those with an annual spend of more than US$50 million has tripled in recent years, rising from 23% in 2020 to 71% in 2023.

The IMS Institute has issued a warning to the seventeen most prominent pharmaceutical companies that, in order to maintain their current rate of research and development and operational margins, they will need to reduce their yearly operating costs by US$36 billion from the level they are at in 2023.

Pharmaceutical companies are increasingly aware of the risks they face if they do not promptly increase their reliance on external services and adapt their business practices to suit the ever-changing market. By doing so, they can ensure that they remain competitive and remain successful.

Outsourcing is becoming increasingly popular among pharmaceutical firms as a strategy for meeting the demands of the modern industry. There are a number of key benefits associated with this approach, some of which are outlined below.

  • Firstly, outsourcing can help to reduce operating costs by allowing firms to access cheaper labour and resources. This can be particularly beneficial when it comes to activities that do not require a great deal of expertise or investment, such as data entry or product assembly.
  • Secondly, outsourcing can help firms to gain access to new skills and technologies, which can be beneficial in certain areas. This can include the development of new products or processes, or the introduction of more efficient methods of operation.
  • Finally, outsourcing can help firms to focus on their core business activities, as they do not need to commit as many resources to peripheral tasks. This can enable them to concentrate on activities that are more likely to generate a return on investment.

In summary, outsourcing offers a range of benefits to pharmaceutical firms, from cost savings to the acquisition of new skills and technologies. As such, it is no surprise that this strategy is becoming increasingly popular.

The Benefits of Contract Manufacturing for the Pharmaceutical Industry

The pharmaceutical industry has been facing increased scrutiny from both customers and legislators due to the rising cost of medicine. As a consequence, they are required to accelerate their development of new medicines, while maintaining stringent protocols and secure procedures. This has posed a unique challenge, as the guidelines for testing and clinical trials are frequently changing. It is therefore essential that the pharmaceutical industry is able to keep up with these shifting regulations in order to continue to provide efficient and effective treatments.

In order to meet customer requirements, pharmaceutical companies are increasingly relying on outsourcing for numerous tasks, from research to software development. This practice is often associated with cost savings, however research indicates that the primary motivation for outsourcing in the pharmaceutical industry is to improve quality (54%), with increased speed to market (49%) and cost reduction (45%) being secondary considerations.

This research demonstrates that pharmaceutical companies prioritise quality when outsourcing, as well as saving time and money by outsourcing their medication development and production. This could enable pharmaceutical businesses to dedicate more of their resources and energy to marketing and sales. It is therefore worth exploring the potential benefits of outsourcing for pharmaceutical businesses.

Enhanced speed to market

The pharmaceutical sector is currently in a state of accelerated transformation, largely due to the increasing prominence of data. This has posed a challenge for many pharmaceutical businesses, as they must be agile and adept in their business processes in order to remain competitive in the digital age. As such, it is imperative that companies in this sector are able to keep up with the rapidly changing landscape.

Today, pharmaceutical companies are adopting a more flexible approach to getting their products to market. In order to reduce the time it takes for this process, numerous organisations have joined forces with outsourcing companies to combine their internal and external resources.

Savings on expenses

Pharmaceutical companies are still struggling to maintain their profit margins due to the high costs associated with supporting in-house research teams and advanced infrastructure. According to the Tufts Center for the Study of Drug Development, bringing a new medicine from discovery to pharmacy shelves can cost up to an eye-watering US$2.7 billion. This cost is proving to be a major challenge for pharmaceutical businesses.

Drug manufacturers often outsource certain tasks in order to reduce expenditure. Streamlining the process in this way can be more cost-effective and efficient in improving their chances of success. Pharmaceutical companies may be able to save money by avoiding having to invest in expensive infrastructure or employing a large team of in-house researchers to bring a new medicine to the market.

Availability of cutting-edge tech

The completion of the Human Genome Project has been incredibly beneficial to the pharmaceutical industry, uncovering an unprecedented amount of genetic information. Previously, only 500 gene-based pharmacological targets were known, but this has now increased to over 120,000 genes and 10,000 potential therapeutic targets. As a result, companies that are able to utilise this data to create effective treatments are highly sought after. However, the majority of pharmaceutical businesses do not possess the requisite in-house knowledge and technology to exploit the full potential of genomics.

The pharmaceutical industry would be prudent to consider outsourcing their research and development to highly specialised university institutes or Contract Research Organisations (CROs) in order to access the most cutting-edge technology available. This could potentially provide them with a competitive advantage when it comes to creating innovative products and services.

Mitigating Danger

An additional significant consideration for pharmaceutical companies when assessing the benefits of outsourcing is the comprehensive regulatory framework that must be adhered to. If any missteps occur during the research, testing or authorisation stages of medication production, the repercussions can be severe for both the manufacturer and the patient.

The pharmaceutical sector is creating a vast amount of data, and the processes for authorising novel drugs are becoming increasingly complex. Therefore, more companies are collaborating with Clinical Research Organisations (CROs) that possess extensive experience in assembling documents that meet regulatory guidelines.

What Organization Is Responsible for Outsourcing Drugs?

Outsourcing can be a powerful tool for pharmaceutical companies to reach their goals in the area of drug development. A variety of different service providers are typically engaged in such collaborations, including but not limited to contract research organisations (CROs), clinical research organisations (CROs), contract manufacturing organisations (CMOs), technology service providers, and regulatory consultants. By working closely with these partners, the pharmaceutical firm can leverage their expertise to progress the drug discovery and development process quickly and efficiently.

  • Institutions that do research on contract, sometimes known as contract research organisations (CROs) Clinical Research Organisations (CROs) provide an invaluable service to the pharmaceutical, biotechnology, and medical device sectors by undertaking a range of clinical studies. In addition, their services are also available to non-profit organisations and public and private educational institutions. When it comes to running clinical trials, certain CROs have the capability to manage the process from start to finish, from locating suitable study sites and recruiting participants to completing all the necessary paperwork for approval from the Food and Drug Administration.
  • Companies that take on the role of both developer and manufacturer under contract: Contract Development and Manufacturing Organisations (CDMOs) are organisations which can provide assistance with the final stages of pharmaceutical drug development. These may include materials from preclinical trials, Phase I clinical trials, later stages of clinical trials, formal stability, scaling up, and commercial manufacturing. There are numerous benefits to partnering with a CDMO, such as compliance with necessary regulations, manufacturing capacity, and timely delivery.
  • In the realm of CSOs, or contract sales organisations: Certified Sales Organisations (CSOs) provide supplementary services to those offered by pharmaceutical companies’ sales and marketing departments. These services can include additional sales coverage tailored to the particular needs of a certain territory or market segment, access to medical professionals that the company may not be able to reach directly and a variety of other benefits.

Over the past ten years, there has been an exponential growth in collaborations between pharmaceutical companies, Contract Research Organizations (CROs) and Contract Development and Manufacturing Organizations (CDMOs). This can largely be attributed to the more stringent regulations that have been implemented by the federal government to ensure the safety and effectiveness of new medications. As the body of pharmaceutical knowledge and technology continues to develop rapidly, businesses are turning to outsourcing as a way to maintain their adaptability and competitive edge.

In recent years, numerous outsourcing companies in the pharmaceutical industry have taken steps to meet the increasing demand for IT support when utilising advanced technologies. These technologies include analytical chemistry, high-throughput screens, data mining, and the identification of genes and proteins. There is now a vast selection of services that can be outsourced, from the initial laboratory work, right through to the completion of medication production and manufacture.

The Outsourcing Tasks Performed by the Pharmaceutical Industry

It is commonplace for companies in the pharmaceutical industry to adopt a hybrid approach to outsourcing, whereby certain operations are managed externally while others are handled in-house. This approach is often more cost-effective and efficient than taking a one-size-fits-all stance when it comes to outsourcing.

Computer Systems and Administrative Procedures

It is essential that the procedures for bringing a new medicine to market are carefully managed and organised by highly proficient administrative staff. However, for pharmaceutical companies that offer a wide array of prescription medication, it is not uncommon to find that their administrative and support resources are stretched to the limit.

Partnering with external suppliers who can provide scalable and efficient back-office support is a popular approach for pharmaceutical companies to supplement their internal resources. For instance, burgeoning pharmaceutic companies may need more advanced business intelligence tools and analytics as well as improved methods of data reporting and management to secure their market position. By engaging with Works, you can avoid the burden of making rushed recruitment decisions and the strain associated with hastily constructing an internal team.

Science and Engineering

In recent times, pharmaceutical companies have historically favoured keeping their research and development activities in-house, only outsourcing certain tasks such as clinical trials. However, the pharmaceutical sector is facing increasing pressure to bring innovative medicines to the public. Despite the lengthy and complex medication approval processes, investors expect pharmaceutical companies to deliver a large number of new drugs each year. Additionally, due to the growing availability of potential targets based on genetic knowledge, there is a heightened urgency for more expedited drug development.

Consequently, organisations are increasingly turning to outsourcing as a viable option from the early stages of drug development. In many instances, businesses are opting to engage with Contract Research Organisations (CROs) to undertake clinical trials, as they possess the necessary infrastructure and specialist knowledge required to carry out such tests. Additionally, R&D services can be outsourced, enabling pharmaceutical companies to reduce costs and accelerate the development of new pharmaceuticals.


Testing is a significant challenge that must be addressed during the production of pharmaceuticals. Recent studies have indicated that by 2023, contract research organisations (CROs) will be responsible for conducting a large proportion (72%) of all clinical trials, up from 23% in 2017. This is a considerable increase, and it is clear that CROs will continue to play a key role in the pharmaceutical development process.

Pharmaceutical companies may choose to conduct testing on-site; however, this may require a large investment of both time and money. The need for comprehensive documentation and the ever-evolving complexity of trial processes are leading to an increase in the outsourcing of such tasks. Furthermore, the varying regulations between markets are also a significant factor in the rise of outsourcing in this sector. By engaging the services of Contract Research Organisations (CROs), pharmaceutical firms have the potential to save time and money, as well as increasing their compliance with regulations and improving the quality of data collected during trials, if the correct collaborations are established.

Pharmaceutical Outsourcing: Where Things Are Headed in the Future

Advances in genomics and other cutting-edge technologies are transforming the way drugs are developed, leading to huge changes in the pharmaceutical industry. For established firms to remain competitive and remain relevant in the future, they must incorporate data-driven processes and form strategic partnerships. In the coming years, we can expect to see a number of developments that will have a significant impact on the pharmaceutical sector.

Automation of procedures by robots

Robotic Process Automation (RPA) is a rapidly growing technology that is being used by businesses to automate large volumes of repetitive tasks. This allows employees to focus their time and energy on more meaningful tasks. The pharmaceutical industry is quickly adopting this practice to provide greater efficiency and productivity.

As an example, Contract Research Organisations (CROs) and Contract Development and Manufacturing Organisations (CDMOs) can benefit significantly from the implementation of Robotic Process Automation (RPA). By automating the collection of data, such as the results of clinical trials for new pharmaceuticals and responses from end users, researchers can save time and effort. The use of RPA simplifies the evaluation of test outcomes in real time, and enables the efficient and auditable completion of repetitive work for pharmaceutical businesses and their business partners. In addition, RPA assists in both the quality monitoring of data and regulatory compliance.

Addition of service packages

As we move into the future, we are likely to see an increased trend of pharmaceutical companies choosing to package their services, rather than outsourcing them as individual elements. This approach opens up a range of opportunities for improved collaboration between firms and their outsourcing partners, enabling companies to take a much more comprehensive approach to their growth. Moreover, this approach can result in significant cost savings and a streamlining of processes, while maintaining the ability to repeat them in an efficient manner.

Strategic alliances

The pharmaceutical industry is increasingly transitioning from transactional to strategic, long-term partnerships. Through collaboration, pharmaceutical companies and universities, for example, are bridging the divide between academic and industrial research. Pharmaceutical organisations may also take advantage of forming alliances with public or government-run entities to gain access to emerging markets. An additional trend in the pharmaceutical sector is the outsourcing of IT and back-office services to offshore development organisations.

The Future of Automation

Companies that proactively look for ways to automate their drug development processes will not only take advantage of the increasing trend towards automation in the industry, but they will also have a competitive edge in the market. The pharmaceutical outsourcing sector does not provide a universal solution; however, it is essential to collaborate with partners who can meet the technological demands of the contemporary pharmaceutical market.

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