Using a hot topic issue—biosimilar outsourcing—I asked these decision makers to help me understand the basic thought process of a pharmaceutical company choosing to outsource a product, which could very well be the next blockbuster. As I was listening for the drivers which would be significant in shifting a pharmaceutical company’s opinion, I began to see a pattern of responses matching those from market research conducted earlier in the year.
The most common response I was given when considering the outsourcing drivers for biosimilar outsourcing was lower costs of manufacturing. In an infant market like that of biosimilars, manufacturing equipment is highly specialized, and expensive; difficult to locate; and costly to install. For these reasons many companies investigate the ROI on CMO partnerships and rarely look back.
Perhaps tied with manufacturing cost for the top reason pharmaceutical companies choose to outsource is to benefit from greater technical expertise. The core of CROs and CMOs existence comes from their ability to offer highly specialized solutions in the form of technical expertise. Thus, the emerging biosimilar market is ripe with opportunities for CROs and CMOs to imprint their brand.
I have paraphrased the third most common response as ‘opportunity cost.’ Opportunity cost exists when a company is faced with making a decision between two choices each with their own set of pros and cons. The opportunity costs are typically associated with the cons in these lists. There are some industries where opportunity cost isn’t a big factor in their strategic planning—the pharmaceutical industry is not one of them. This is because opportunity cost is most applicable when considering long-term actions.
At this point any statisticians reading may be thinking, “Ok, you’ve conducted a weak qualitative assessment at best, why is this significant?” The purpose of walking around and speaking with these professionals was to see if my real world experiences and interactions would match the data found by our online surveys. In this case, the micro-meetings confirmed previously collected data. But is that enough? As a final validation check, we should also ask ourselves if these responses make sense in context?
The two fundamentals to B2B agreements are:
1) Can you save your client time?
2) Can you save your client money?
If we take a look at our identified drivers in the scope of these fundamentals, we begin to see a very clear picture of drivers, which save time, money and sometimes both. So yes, these drivers do make sense within our context. Now what?
Well, if I were a CRO or CMO looking to get in on a piece of the biosimilar action I would make sure my marketing plan hits on all three of these ‘pain points.’ Make sure to communicate that your manufacturing processes not only help to reduce costs, but you have implemented process optimization, which also helps to save your client time. Talk about how your technical expertise can save time when issues may arise, but also how this expertise helps you to reduce their costs through unique innovations. When it comes to opportunity costs, show your clients how your partnership benefits them in the short and long run.
Cliff Echols is market research director at Bluebox Research. He is responsible for managing client relationships and client satisfaction with the firm’s custom research project deliveries and oversees the entire research process from identification of client needs, defining a research objectives, preparing research methodology, supervising panel member quality control, fielding supervision, data analysis, and innovative visual reporting. He can be reached at email@example.com, or visit the firm online at www.blueboxresearch.com