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Why Is Pharmaceutical Outsourcing Skyrocketing?


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Over the past few years, the pharmaceutical industry has seen dynamic changes due to rapidly growing creative technology, and the introduction of automation and artificial intelligence. The rising costs and reduced investments over the last decade coupled with pressure from government and regulating bodies about drug pricing have led to the increasing trend of outsourcing to CROs (for drug discovery), CMOs (for large-scale manufacture), and CDMOs (for discovery, development and manufacture).

For example, a viral vector CDMO will ensure the development and manufacturing of appropriate viral vectors at a commercial scale. The global outsourcing market is expected to be worth 6.3 billion by 2030.

Let’s see the reasons why outsourcing is rapidly increasing in pharma.

1. Increased Operational Efficiency.

An increase in advanced diagnostic procedures and the rising prevalence of diseases has increased drug development and research work in the pharmaceutical industry. Outsourcing drug development and manufacturing increases efficiency by reducing workload and dividing the labour.

2. Cost Effectiveness.

In-house large-scale production units require a huge initial investment along with maintenance costs later. The training and hiring of staff for that purpose is yet another expense. All in all, drug development and manufacturing is a huge industry which has several complex management. It is far easier and cheaper to outsource drug manufacturing and development. It helps pharmaceutical companies to direct their finances toward marketing and other areas.

3. Quality Products.

With passing time there is a shift in motivation for outsourcing drug development and manufacturing. Many pharmaceutical industries are forming strategic partnerships with CDMOs and CMOs to obtain a better quality of finished products. Instead of being the service providers, CDMOs are now rising to be strategic partners in this shifting trend.

4. Expansion of Geographical Presence.

The less the budget spent on drug development and manufacturing, the more expansion opportunities. Outsourcing helps the pharmaceutical company to keep its major focus on bringing in new drugs, marketing the drugs and expanding their services and company. The reduced burden via partnerships with CDMOs can make this happen.

5. On-Demand Services.

Outsourcing helps a pharmaceutical company in tackling the diverse medication requirements of the patients. The CDMOs and CROs can manufacture drugs at large scales with maximum efficiency. So, for providing diverse services to patients outsourcing is becoming crucial.

6. Agility and Flexibility.

Outsourcing helps pharmaceutical to adjust according to market trends and industry flow. It helps the companies scale their services, recalibrate their priorities, direct sources to stay in the competitive market, and maintain a commercial edge.

7. Increase Compliance Requirements.

Outsourcing makes sit easy to stick with the regulations for drug development. Regulatory bodies such as US Food and Drug Administration (FDA) have implemented strict inspection rules over the past decade to ensure the best quality of drugs. Environmental monitoring, disinfection, cleaning, and equipment control are the most common challenges during the FDA inspection. To deal with this rigorous screening process, hiring a company that is  Health Insurance Portability and Accountability Act (HIPAA) and Payment Card Industry (PCI) Level 4 compliant makes it easy for the pharmaceutical company to pass the drug inspection because these CDMOS maintain the highest level of regulations.