Outsourcing: Good for what ails pharma

What can save Big Pharma? Outsourcing, says AVOS Life Sciences consultant Neil MacAllister. But that outsourcing has to be well managed to deliver the kind of streamlined, effective operations drugmakers need these days, he says. And therein lies the rub, because pharma always has been a fully integrated kind of business: R&D to marketing and beyond--and everything in between. Execs have mostly been specialists. They'll have to become string-pulling outsourcing managers instead, and that's a tough shift to make.

But some companies are making progress. Consider the recent R&D deal between Eli Lilly and Covance: the drugmaker essentially hired Covance to take over a big chunk of its research operations. And Lilly has outsourced other ops to Quintiles. Drugmakers are farming out computer modeling because they don't want to invest in the necessary technology, MacAllister says.

And, he says, there's still a lot of fat in Big Pharma--even after the thousands of layoffs. He predicts more downsizing to come as drugmakers learn how to contract out more and more of their operations.

- read the interview at Pharmalot

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