Pharma Outsourcing on the Rise, Says IMS

Source: ITBusiness Edge

May 27, 2008 at 12:08 pm

The pharmaceutical industry has been slower than other sectors to adopt outsourcing, largely due to concerns over protecting valuable intellectual property. But rising costs and shrinking margins are leading more pharma companies to do so, says IMS in a recent report.

Four of the 10 largest pharma companies announced major initiatives to outsource manufacturing activities last year, according to an Outsourcing-Pharma.com story about the report. IMS identifies the increase as one of the top 10 strategic issues currently facing the pharma industry. Not only that, but other functions will likely soon follow. Says Murray Aitken, senior vice president for its Healthcare Insight group:

This shift towards outsourcing of manufacturing is likely to be followed by other functions within pharmaceutical companies, including some elements of R&D.

Actually, movement of pharma R&D offshore already appears to be happening, as I wrote back in December.

According to an Investor’s Business Daily article I cited in that blog, 33 percent of pharma R&D spending is outsourced, and experts expect the number to grow to 41 percent by 2009. Pfizer announced it was closing two manufacturing facilities in the U.S. and one in Germany and offshoring much of that work to Asia. It also plans to increase R&D investments in South Korea, India, China and Japan. Rival Eli Lilly, which already outsources manufacturing, sales and IT functions, will outsource up to half of its R&D functions to third parties by 2010, according to an in-Pharma Technologist.com story I cited in another blog.



Read more: http://www.itbusinessedge.com/blogs/sts/?p=379

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Also:

Outsourcing of production gaining pace in big pharma

27-May-2008 - Pharmaceutical manufacturers are now withdrawing from manufacturing at an unprecedented rate, with four of the top 10 players announcing major new outsourcing programmes in 2007, says IMS in a new document which explores the implications of that trend.

The pace of change indicates that some beliefs that were once entrenched within the average industry executive have been rooted out: it's no longer necessary to join R&D to manufacturing; intellectual property no longer needs to be jealously guarded in-house; and the skills needed to make drugs can be found just as readily in emerging markets.

http://www.outsourcing-pharma.com/news/ng.asp?n=85511-ms

What happened to our country where we could manufacture here, people had jobs, and the companies made profits? Is that too much to ask? :grr:

Which is a process that has been going on, to some extent, for thousands of years.

unregulated parasitic corporations to force everyone to the lowest possible extreme. It is only possible when the corporations control the governments instead of the people controlling them.

Corporations will, like you said, go for the lowest possible extreme. The monopolistic power of government can allow those corporations to be kept in check. However, since corporations are now multi-national actors, and governments are not, there lies the problem. Governments are actually becoming, or remaining, more diverse in comparison to corporations. That's why the nation-state is losing more power as time flies by.

So until there is a single government that is able to check and regulate however many corporations there are, this corrupt form of global trade will continue.

LBN. This is a blog, citing another blog.

just for you. :)

Assholes.

...because he wanted to "protect" us? Wasn't this the excuse he used when the debate on whether or not Americans should get less-expensive drugs from Canada arose?

And wasn't legislation passed that actually bans Americans from importing cheaper drugs from Canada?

It seems that if Big Pharma can outsource to foreign countries in order to cut costs, then we Americans should be able to get less-expensive drugs from foreign sources.

:sarcasm:
Why are we so stupid we let this go on. I have to buy the $4 generics. I am terrified I'm going to be a statistic like those dogs and cats one of these days. I knew that was a bad idea when they did it, because nothing Walmart does is ever a good idea for the consumer. But it's tough to ignore $4 medicine.

Again, if companies played by the rules, and on a properly and completely level playing field (like this is a game of football!), this wouldn't be a problem.

I guess that means we can expect lower prices here, too, right? And we'll be permitted to buy prescriptions from Canada and other countries, too, right?

Wrong. This "global economy" stuff only works one way, dontcha know?

of my daily GERD (acid reflux) pills - MADE IN INDIA. imo, we should never outsource our medication, let alone other things!

that India had a big problem with countierfit meds. I hate that they are outsourcing this esp after the China dog food fiasco. Who is going to oversee the manufacturing process?

Found this on a quick search:

India is 2nd largest exporter of fake medicines to EU

May 20, 2008 at 2323 hrs IST

Mumbai, May 19 The following statistics may not give India much reason to cheer. The country is still the second largest counterfeit medicines exporter to the European Union in 2007, although it has forfeited the first position it held in 2006 to Switzerland.

As per data released by the European Commission on Monday, India stands second after Switzerland in the list of top exporters of fake medicines to the EU in 2007 with 35% of the total fake drugs seized. In 2006, India was the leading source of fake drugs exported to the EU.

Next to Switzerland and India, the United Arab Emirates comes third with 15% of the total amount seized, according to the survey titled, '2007 customs seizure of counterfeit goods at EU's external border'. In 2006, India, together with the UAE and China, was responsible for more than 80% of all counterfeit medicines.

http://www.financialexpress.com/news/India-is-2nd-largest-exporter-of-fake-medicines-to-EU----/311834/

now i'm concerned that they might be placebos!

Fake heart and cancer drugs seized by Customs

MORE THAN half a million packets of fake medicines, many with potentially lethal consequences, were seized last year as customs authorities stepped up their fight against counterfeit goods entering Europe.

Fraudsters favoured Viagra and condoms, but also targeted a wide range of other items, including antibiotics, medicines to treat cancer, anti-cholesterol drugs, everyday products such as paracetamol and even those claiming to cure avian flu.

One fake, masquerading as a cardiovascular drug, was found to contain a mixture of brick dust. To resemble the genuine article it had been painted with yellow paint, normally used for roads, and covered with a coat of furniture polish to provide a glossy finish.

http://www.timesonline.co.uk/tol/news/world/europe/article633547.ece

i hadn't considered that!!!

If they will follow basic rules of decency and regulate, it wouldn't be as much of a problem.

Especially at the inflated prices people pay upfront for medications.

must meet the same standards as stuff made here. There is some really good science being done by SOME firms in India, and some really bad work. We need to fully FUND the FDA so we can keep an eye on the overseas manufacturers.

:(

You're right in that many firms in India and other countries do genuinely worthwhile work. But their economies allow the lower wages to be manna from heaven to build their middle classes (hence the increase in demand). A shame so much worthless work comes out of it, and there are many non-Americans who say they want America's "comeuppance". I hate to wear a tinfoil hat, but can some of the shoddy and toxic stuff really be deliberate?

:shrug:

but I don't think its anything more than simple greed and trying to cut costs in many cases. Alot of the manufacturing processes are so complex that its easy for one step to be contaminated and it won't be caught easily.
There is a very good reason why my lab is high security..we do testing on samples in human clinical trials. Even other employees in the company (even in the same department) have no access/limited access. I wonder sometimes how careful these companies are with control of their product..I feel thats the big problem over there.

because we can't be certain about their SAFETY!


:eyes:

...local companies in India for instance, they will stop these same companies from selling MUCH cheaper generics to the US. I have been buying all my RX's from Canada, India, and (yes)New Zealand for 8 yrs and I'm still alive & kicking. They don't want you buying overseas for the "rule" for most things in life; COST. I get 2 of my drugs from India now and both are probably 60-70% cheaper than if I bought them in the US. This is the US government openly protecting monopolies, plain & simple. The bullshit about free markets is exactly that, bullshit.

Just a few weeks ago I read that Merck was being grilled on capital hill for a drug (I forget which) they had manufactured in China. It was poisoned and they (Merck) believed it was intentional.

A few more incidents like that will give them second thoughts. After all -- *they* all take their own drugs, so will be as much at risk as the rest of us. x(

So technically, US made products are "overseas" made products for them.

Merck & Co., Inc. Global Headquarters

Merck & Co., Inc.
One Merck Drive
P.O. Box 100
Whitehouse Station, NJ 08889-0100 USA
Phone: 908-423-1000

And yet we can't get it imported from Canada, people citing concerns over medications being counterfeit...

under a special tax break. Pharma is one of the biggest industries down there.

True, it's a U.S. commonwealth, but wages are far lower than in the 50 states.

They're going farther offshore, is all.

as products made in the US. The problem is the FDA does not have the staff to inspect a lot of these facilities.
BUT a lot of this has been going on for awhile. 90% of the vaccines in this country are manufactured in Europe, because its cheaper to do biological manufacturing overseas.
As much as I dislike outsourcing, its not necessarily a bad thing although, yes, there is a possibility that my job could someday be outsourced to India or China. However, since my company depends quite heavily on tightly regulated products and a reputation as a leader in QCe, its still cheaper to do alot of R+D and production here.
But outsourcing to Europe has been going on for awhile

Greed feeds more Greed.