Outsourcing Management in the Pharmaceutical Industry: The Early Stages at Four United States Companies
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Drug Information Journal,Vol. 31, pp. 111-118. 1997 Rinted in the USA. All rights reserved.
OUTSOURCING MANAGEMENT IN THE PHARMACEUTICAL INDUSTRY THE EARLY STAGES AT FOUR UNITED STATES COMPANIES DEBBIEA. DANIEL Assistant Manager, Central Contracts and Grants, Finance, Planning and Lab Services, The R. W. Johnson Pharmaceutical Research Institute, Raritan, New Jersey
NANETTENANJO-JONES Financial Coordinator, Department of Medical Affairs Finance, Genentech, Inc., South San Francisco, California
JAMESKIRWIN Clinical Contracts Negotiator, Clinical Medical Affairs, Zeneca Pharmaceuticals, Wilmington, Delaware
SUEA. STEMPIEN Contracts Manager, Department of Finance, Roche Bioscience, a division of Syntex (U.S.A.) Inc., Palo Alto, California
The authors have been involved with initial concept development and implementation of the outsourcing management process at their respective companies. Representing three large global pharmaceutical companies and one large biotechnology company, they will discuss outsourcing management at their companies, how it developed, and where it seems to be headed on the road to virtual drug development. Key Words: Outsourcing; Virtual drug development; Contract research organizations; Centralized negotiation; Contract
INTRODUCTION WHILE MANY INDUSTRIES have a long history of outsourcing management, the pharmaceutical industry did not outsource, thus there was no need for outsourcing management. Every aspect of every program was kept in-house except in dire circumstances Presented at the DIA 32nd Annual Meeting ‘The Challenge of Worldwide Pharmaceutical Development in an Era of Regulatory Change: Accelerated Approval with Quality and Contained Cost,” June 8-12. 1996. San Diego, California. Reprint address: Sue A. Stempien. Contracts Manager, Department of Finance, Roche Bioscience. a division of Syntex (U.S.A.) Inc., Palo Alto, CA 94306.
and then the least favored program was the one chosen to be sent to an outside vendor. Industry lore held that it was risky, expensive business to trust an outside company to perform any aspect of the drug development process. Times have changed. The rise of competent, competitive contract research organizations (CROs) during the last 10 years, combined with industry downsizing, cost containment practices, and drug development globalization, has created the critical mass required to make outsourcing the rule rather than the exception (1). Contracting with outside parties is big money. Some analysts predict that United States grant costs alone will top $250,000,000 in 1996 (2). The
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Debbie A. Daniel, Nanette Nanjo-Jones, James Kinvin, and Sue A. Stempien
ducted and contracts drafted across teams without standard payment terms. The legal review process was also poorly defined. Most clinical research projects were managed with internal resources. The utilization of services provided by contract research organizations was limited to narrow scope assistance with low priori
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