Survey: Look for strong growth in R&D outsourcing, shift to India and China

If there's one dominant theme in biotechnology these days, it's the relentless effort to cut costs and outsource work in an attempt to achieve an optimum level of efficiency. And a new survey conducted of Northern California biotech companies shows that there's a big move afoot to get cheaper outsourcing work done in India and China.

Many biopharma companies plan to start outsourcing some things that had once been considered core in-house functions, such as clinical trial monitoring and protocol development, says Booz & Co., which took the pulse of 32 industry executives for their survey. And the change-up is being facilitated by new technology that allows for real-time data processing and secure access to current clinical data.

"Outsourcing more of these critical activities along the entire R&D spectrum will transform the nature of outsourcing relationships," says Booz & Co.

"There is a sea change happening in the biopharmaceutical industry," says Matthew Le Merle, a partner at Booz & Co. "Companies first started to outsource to CROs to get R&D done faster and cheaper. However, this study clearly signals that biotech executives are now looking for more--more value, more expertise, and more innovation. This means we will see outsourcing relationships evolve from transactional to strategic, which will require new capabilities on both sides."

Two out of three of the executives surveyed said R&D outsourcing will continue to see strong growth, with about half saying a lack of internal expertise will drive the trend while almost as many see it growing as a result of exercising greater cost control over a project. And over the next three years they see a shift from a central U.S. focus to increased activity in India and China.

- here's the press release

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