BIO 2012: Biopharma looks at pros and cons of CMOs when debating in-house versus outsourcing

To outsource or not to outsource--that is the question biotech and pharma companies are asking themselves. And with recent breaches in Asia top of mind, the security of intellectual property has jumped to the top of the list of considerations when companies decide, experts on a BIO 2012 panel indicated.

While all the signs and studies show that outsourcing will only grow for years to come, companies are putting more weight and consideration into whether to take it upon themselves to manufacture drugs, or to hand that responsibility over to contractors.

Representatives from Eli Lilly subsidiary Elanco, Merck ($MRK), Gilead and Takeda were panelists at BIO 2012 in Boston to discuss the pros and cons of outsourcing. When weighing the factors, they said companies look at what could go to CMOs, from the types of service needed and the capabilities contractors can offer, to IP security.

"When we seek external collaboration, we seek the right fit and security is paramount," said John Stubenrauch, of Merck.

Breaches in intellectual property security, notably in China, have been noticed by pharma companies and now they are taking a new approach to contract manufacturing. Location has begun to matter to the likes of Gilead, which has begun to have second thoughts about outsourcing to different regions. "For us, internal vs. outsource is really relied too much on IP consideration, but I would say that with the Asian market, we'd have some reluctance," Regan Shea, of Gilead, said, mentioning India in particular.

And it isn't just location that's worth considering; it's also what is being outsourced. As Gary Harpenau from Elanco explained, the manufacturing of active drugs and ingredients will likely stay in-house, given the value they have to their formulators. Other services, like filling and finishing, may wind up in the hands of contractors, which could factor into the boon the fill-finish work has experienced as of late.

"If it's a big platform, you want to keep in-house to protect IP," Harpenau said. "The further you get away from the active ingredient, the more you tend to outsource."

And what about resources? Everything from the number of technical experts there are at a CMO, to the facilities it could offer, need to be considered. And once a contractor is selected, communication will need to be established to ensure that the manufacturing relationship is a success, as Palani Palaniappan, of Takeda explained.

"It's about working together to get the product out there and having a clear scorecard of what the performance is," he said. "There is a process check. I'll tell you my view and you'll tell me your view."

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