There are advantages both to keeping clinical supply manufacturing in-house and to outsourcing it. However, the decision is actually a default one for many companies, because they don't have the capacity to manufacture in-house. The decision is also driven by pressures to reduce costs and get to market faster.
Outsourcing helps to manage spending, avoids the need to procure expensive equipment, accesses expertise, and can improve pipeline efficiency. It also allows companies to focus on core development.
On the flip-side, the advantage of keeping development in-house is the level of control that the company is able to hold on to, including over scale-up and product, process and formulation patents. This is particularly true of biologics, which are more complex and where more things can go wrong. Though the trend has generally been to sell off manufacturing capabilities, some companies are actually expanding to bring biologics manufacturing in-house--as an example, in 2009, Genentech Singapore (Roche) opted to buy Lonza's cell-culture biologic manufacturing facility in Singapore, giving it bulk manufacturing capabilities for monoclonal antibodies.
The in-house versus outsourcing decision isn't one size fits all, though--even for companies that have manufacturing capabilities, choices still have to be made, as these capabilities are still finite, especially as the needs for clinical trial supplies increase in later stage and global clinical trials. The decision needs to be balanced according to the products in the pipeline and the development timelines, and CMOs may also be brought in to carry out part of the process, particularly specialist stages.