The pharmaceutical industry has historically been one of the most profitable sectors. One analysis showed that the profit margin for this sector fluctuated between 15% and 20%.
However, the industry has not been without its challenges in recent years. More pharmaceutical companies are trying to find ways to boost profitability in light of new industry trends that could make the industry more complex.
In the past few years, the pharmaceutical industry has seen low return on investments and new product decline. Many pharmaceutical companies have turned to outsourcing as a common solution to profit reduction and low efficiency. Nowadays, clinical operations, manufacturing and product formulation processes are outsourced.
However, many pharma companies lack the basic blueprint for outsourcing key areas of operations to professionals. Some even consider outsourcing an unacceptable risk. They tend to incur more losses and miss out on new opportunities.
This article aims to explore how pharmaceuticals can reduce workload and improve efficiency by outsourcing key areas of the business. You’ll learn the merits of regulatory outsourcing and just how much it can transform your improve the pharmaceutical industry. This can even help pharmaceutical companies develop new innovations.
What is Outsourcing?
Outsourcing is a business technique where corporations contract a third-party organisation to execute activities, manage operations, or offer services. The outside organization, handles its own personnel and systems, to conduct such activities either at the employing company’s own facilities, or at favourable remote locations.
Several companies in various industries today outsource numerous secondary tasks or services. The most commonly outsourced services include IT services such as programming, technical support and application development. Customer service and contact center tasks are also routinely outsourced.
Manufacturing processes, human resources tasks and financial functions such as bookkeeping and payroll processing are also on the outsourcing menu. Companies may outsource auxiliary departments or entire divisions like IT or human resources depending on business merits.
When properly handled, outsourcing slowly fosters improved compliance, greater transparency, higher productivity, increased cost-effectiveness, and desired strategic outcomes.
Outsourcing is often attractive to big pharma companies because:
- Investors and stakeholders usually put pressure on developers to cut development timelines. Outsourcing helps to speed thing up.
- Global approval and post-approval requirements are becoming more challenging.
- There is a growing need to enhance productivity and efficiency across the value chain.
- It makes it less difficult to comply with different drug regulations worldwide.
Outsourcing solves the problems above by providing a flexible workforce, which iron out the unsavory aspects of regulatory workloads marked by periods of intense activity. These could range from marketing applications, to clinical trials, and compliance crises as well as quiet periods involving crucial maintenance filings.
Smaller firms face difficulties in keeping underutilized resources operational during slow periods, whereas larger firms that can afford to hire compliance teams are hesitant to do so. This is all because alternative expenditure in areas like R&D through outsourcing may provide an even greater ROI.
How Can Pharmaceuticals Effectively Outsource Their Activities?
Pharmaceutical companies can outsource their activities to boost efficiency by using the right outsourcing solutions and selecting compatible outsourcing partners. Several factors should be considered while evaluating a possible outsourcing partner. The aim should be to build a partnership that is well-structured, productive, and mutually profitable.
They must first consider the abilities, experience, speed and expertise of their outsourcing partners. The next step, is the evaluation of their current capabilities. Do they have the necessary equipment and personnel to manage your activities? And can they adapt swiftly to shifting conditions? Once this is done, they also examine their procedures for quality control and the regulatory adherence to different rules and specifications.
Finally you have the economic considerations like financial security, long-term viability and service cost. Then also the capability to develop long-term, mutually beneficial partnerships with sponsoring firms. When these checklists provide favourable evidence of outsourcing outcomes, pharma companies then choose their outsourcing partners.
Pharmaceuticals can effectively outsource their activities to reduce workload and boost efficiency by doing the following.
- Using right-sized outsourcing solutions
A pharma business must first establish its requirements before jumping at outsourcing solutions. Is it necessary for the company to increase efficiency, add experience, refocus roles for key internal regulatory employees,, and adopt technology?
Once these questions are sufficiently answered, it should design a partnership that suits its deliverables and expenses. Large transformative undertakings may necessitate a strategic cooperation, while small, transactional initiatives may concentrate on compliance and cost reduction.
- Easing the transition
Even for modest, targeted initiatives, regulatory outsourcing is a change-management difficulty. Employees may be concerned about losing responsibilities. New methods and systems may face opposition. To overcome disorganization, all key business divisions must understand what the third-party is delivering, with roles and duties clearly defined.
The third-party can plan and deliver targeted seminars to ensure that the client’s current regulatory staff understands and supports the outsourcing process. A shadowing procedure may be used to introduce third-party teams to internal teams and other stakeholders around the firm. The work transfer may then be mapped and a hurried transfer should be avoided at all costs.
Pharmaceuticals can outsource by employing pharmaceutical courier services to handle distributions, marketing teams to handle sales and customer needs, contract laboratory testing to reduce lab workloads and so on.
Bottom Line
Regulatory outsourcing may supplement a pharmaceutical company with new technology, operational knowledge, global and local regulatory information, and process innovation. Success necessitates tailored solutions backed by management and nourished by effective communication and governance. Choosing the correct outsourcing method is also critical for reducing needless expenditures, preserving productivity and boosting efficiency.
