outsourcing

Senator demands Merck outsourcing info

Tracy Staton — Fri, 25 Jul 2008 10:53:45 -0400

Pfizer might have felt singled out a while back when Sen. Sherrod Brown demanded details of its outsourcing program. How much, the senator wanted to know, of the company's outsourcing went to countries with less stringent oversight? Well, now Pfizer isn't alone: The senator has sent Merck a letter asking for similar info. And as in Pfizer's case, the request follows a statement from a company exec about the growth of their companies' outsourcing activities.

Back in January, Merck SVP Richard Spoor said that the drugmaker was moving toward externally sourcing about 35 percent of its API ingredients, vaccines, drugs, and so on by 2010. So Brown now wants to know how Merck tracks each ingredient along its chain of custody and how it makes sure that everybody along that chain is doing the right thing. And he's asking for a breakdown of the company's outsourcing activities: how much in the U.S., how much in which other countries--even how much workers at its API suppliers are paid.

Merck says it's preparing a response to Brown's letter, and it emphasizes that it doesn't use materials that don't meet its "rigorous standards." Pfizer, for its part, replied to Brown earlier this month, saying that outsourcing doesn't compromise safety for American consumers, and that looser safety standards and lower costs don't motivate its decisions to farm out work.

- read the item at Pharmalot

Senator calls for outsourcing probe at FDA

Tracy Staton — Tue, 17 Jun 2008 09:54:45 -0400

A new senator is leaping into the pharma fray. Sen. Sherrod Brown, an Ohio Democrat, is calling on the FDA to evaluate its oversight of outsourcing practices. In a letter to the agency, Brown cites a statement by CDER Chief Janet Woodcock at a recent Congressional hearing, when she said some drugmakers outsource their operations because of "lower, less stringent standards in some parts of the world," in addition to lower labor costs. At the same hearing, a Pfizer exec said 17 percent of its active ingredient and drug manufacturing is outsourced--and Brown wants an explanation for that number, too. He wants to know not only how much Pfizer saves through outsourcing, but also what, exactly, has it outsourced to countries with "less stringent oversight?"

It had to happen: Outsourcing has been a hot-button issue, and a highly political one ever since Ross Perot's famous "giant sucking sound" quote when he was running for president. And this is an election year, after all.

- see Brown's release
- read the Pharmalot post

Should FDA outsource inspections?

Tracy Staton — Mon, 16 Jun 2008 08:41:30 -0400

Is what's good for pharma good for its regulators, too? As we all know, Big Pharma's outsourcing of active ingredients and manufacturing has caused a big bout of hand-wringing on the governmental side as FDA has struggled to keep up--and largely failed. Meanwhile, attempting to keep pace with a boom in overseas device manufacturing, FDA tried imitating its regulatees by outsourcing some foreign device-making inspections. Two years and 12 third-party inspections later, critics have declared the program a flop, and even FDA types are underwhelmed.

Despite those ignominious results, the Bush administration has been pushing a plan to expand private inspections to drugs and other imports. Bills are in various stages of draft in Congress. Whether inspection-outsourcing will ever make it past the draft phase remains to be seen, especially given the fact that in a few months, the Bush administration will be no more, and its zeal for privatization could very well exit the White House along with the boxed-up files. Stay tuned.

- see the Pharmalot post

Brazil poised for big pharma growth

Tracy Staton — Tue, 03 Jun 2008 10:42:39 -0400

Guess who's the new up-and-comer in pharma? Brazil. Despite a burdensome tax structure, foreign companies are investing heavily in the country, taking advantage of incentives to entry into its generics market. India's Ranbaxy, Germany's Hexal, and Canada's Apotex are among the players in manufacturing. Plus, with almost a quarter of manufacturing capacity unfilled, it's in a perfect position to ramp up for increasing demand. All told, Brazil is among seven "pharmerging" markets expected to grow 12-13 percent next year alone.

- read the story at Outsourcing Pharma

IMS: Pace of outsourcing accelerating

Tracy Staton — Tue, 27 May 2008 09:39:45 -0400

Drugmakers are pulling out of manufacturing at an unprecedented rate, according to a new report from IMS Health. Four of the top 10 pharma players announced big new outsourcing programs last year. That's evidence that pharma execs are thinking in vastly different ways from their predecessors, who believed R&D and manufacturing had to work hand-in-glove, and that the skills required to make drugs couldn't be found in emerging markets.

This shift toward contract manufacturing has risks, IMS concludes. First, there are safety concerns. Just think of Baxter's heparin supplier Scientific Protein, which made crude heparin in partnership with a Chinese manufacturer whose plant was riddled with problems when the FDA finally inspected it after millions of doses of the blood thinner had to be recalled. Then there's Sanofi-Aventis, whose contract manufacturer went bankrupt, leaving Sanofi to deal with its manufacturing breaches. Secondly, in other industries, contract manufacturers have found ways to enter the market as competitors. Finally, there's economic implications of shipping work to emerging markets. Europe, for instance, counts 640,000 pharma jobs. If they are perceived to be under threat from outsourcing, politicians might intervene.

- read the story at Outsourcing Pharma

Pharma outsourcing continues to swell

Mon, 05 May 2008 06:59:57 -0400

Outsourcing is still on roll--it's just not rolling quite as fast as it did last year. Such is the conclusion of Contract Pharma's 2008 outsourcing survey, which found that 52 percent of companies plan to boost their outsourcing spend by 6 percent or more, compared with 62 percent last year.

At the same time, fewer companies expected spending the same or less on outsourcing this year--16 percent versus 22 percent last year. So while more pharma firms plan to farm out more work, they're not expecting their outsourcing growth to be quite as brisk this year as last.

Another interesting group of stats in the survey dealt with Asian contracts. Only 30 percent of respondents said they would probably or definitely send work to Asia this year; 46 percent said they probably or definitely wouldn't. But the breakdown by company showed that Big Pharma and generics makers were most likely to ink an Asian deal in 2008: 33 percent and 36 percent, respectively, said they'd "definitely" outsource to Asia this year. Another 7 percent and 14 percent said "probably." To read up on preferred vendors and more, check out the full survey.

- see the brief in Contract Pharma

AZ reaffirms whole-hog API outsourcing

Wed, 30 Apr 2008 06:59:54 -0400

Remember last fall when AstraZeneca EVP David Smith said the company was looking to outsource most of its manufacturing? And the ensuing outcry had AstraZeneca's PR operation backpedaling like crazy?

Well, after AstraZeneca settled its differences with Ranbaxy Laboratories, Smith's boss affirmed a big chunk of those outsourcing plans. In a conference call about the Ranbaxy deal, CEO David Brennan (photo) said that AstraZeneca wants to outsource all API manufacturing within 10 years. AstraZeneca, remember, agreed to hand over manufacturing of Nexium's active ingredient to Ranbaxy as part of the settlement. "This move is absolutely consistent with our supply chain strategy," Brennan said. "We have long-term plans to exit all API production over the next five to 10 years."

While that's not exactly "most" of AstraZeneca's manufacturing, it is a sizable shift. Stay tuned.

- see the article in Contract Pharma

ALSO: India's Dr. Reddy's laboratories agreed to buy BASF's contract manufacturing plant in Shreveport, LA, which focuses on turning out finished prescription and OTC liquids, tablets, and creams for the U.S. market. Terms weren't disclosed, but the business brought in $43 million for BASF last year. Report

AstraZeneca sourcing ingredients in China

Mon, 22 Oct 2007 06:59:58 -0400

AstraZeneca brass got all huffy and defensive last month when news of their plans to outsource manufacturing hit the press. "Misquote" was the operative word. Now, though, the company has agreed to buy a key ingredient in Seroquel, its $3.4 billion schizophrenia drug, from contract manufacturers in China.

According to The Times of London, it's just the first of many active ingredients that will be farmed out to contractors. By restructuring manufacturing over the next three years, AstraZeneca hopes to save $900 million. The company has opened a new sourcing center in China to identify likely manufacturing partners and smooth the transition to outsourcing. AstraZeneca already has a sourcing office in Bangalore, India.

- see the report from The Times of London

Related Articles:
AstraZeneca: Just a bit of outsourcing. Report
AstraZeneca to outsource manufacturing. Report
Americans distrust drugs from China, India. Report
Research points to rapid growth of R&D outsourcing. Report
China pushes drug development as R&D soars. Report

SPOTLIGHT: FDA outsourcing jobs

Mon, 27 Aug 2007 06:59:52 -0400

The FDA may outsource some 300 jobs to private companies, including administrative jobs in some 20 cities; the National Treasury Employees Union, which represents half of the agency's workers, opposes the plan, citing the string of contaminated products that have found their way into the country recently. Originally the agency was considering outsourcing some lab techs and field office workers at safety inspection sites, too, but it reconsidered. Report