Biopharmaceuticals is the most upcoming
segment of the pharmaceutical industry due to the evolution of biotechnology.
This has resulted in highly efficacious products that aim at providing
cures for life-threatening, difficult ailments, which have been difficult
(well nigh impossible!) to treat. This industry is keeping its nose to
the grindstone to reach the pinnacle. Certain factors, like increasing
costs, complex regulatory issues, high prices, tremendous competition,
etc., are forcing companies to improve their operational efficiency and
productivity. Outsourcing has become a strategic imperative for companies
in their quest to improve their efficiency and productivity.
Figure 1: Outsourcing in Biopharmaceutical Market
(USD billion) - (2000-2008)
According to Figure 1 the biopharmaceutical market is forecasted to growth
at a CAGR of 10 percent reaching USD 58.6 billion in 2008 from USD 36.5
billion in 2003. Outsourcing in this sector, however, has been increasing
at a rate of 20 percent per annum. The coming years will witness an increasing
proportion of biopharmaceutical activities being outsourced.
Outsourcing or Offshoring - Does It Really Matter?
The conventional idea of offshoring processes to low-cost Asian countries
is not the only way out for biopharmaceutical outsourcing. Outsourcing
in biopharmaceuticals has crossed the Rubicon as far as cost reduction
is concerned. Companies now have a vision that goes beyond cost cutting.
In fact, the majority of the top service providers, like Boehringer Ingelheim,
Lonza Custom Manufacturing, etc., are based in the United States. However,
there are emerging opportunities in Asian countries, which is driving
offshoring of biopharmaceuticals to these destinations. Biocon in Bangalore,
India, has announced that it will manufacture Bristol-Myers Squibb's (New
York, NY, USA) recombinant insulin product. In the area of clinical trials,
the Biopharmaceutical Manufacturing Technology Center (Singapore), a part
of the Bio processing Technology Institute, has opened a pilot-scale facility
to produce materials through Phase II clinical trials.