Throughout the pharmaceutical and biopharmaceutical industry there are almost unlimited opportunities for outsourcing. Currently there is approximately $10 billion in analytical services being outsourced which is expected to grow by more than 20% per year¹. Due to this current trend there is a great deal of potential to be realized. The choice to outsource is a somewhat difficult decision, but it is one that can be both analytically and financially rewarding. By carefully considering all the services and choosing an appropriate outsourcing company, a laboratory can gain a great deal of freedom.

Types of Outsourcing
Wide arrays of analytical and pharmaceutical services are available through the practice of subcontracting analytical work. The service can be as simple as drug identification or as complex as method development with detailed consultation on FDA regulations. Outsourcing basically breaks down into two categories, tactical and strategic². The first step in the decision to outsource is determining in which category your needs fall. Tactical outsourcing is a short-term solution. The need for this type of outsourcing can result from a fluctuation in demand for products or services due to seasonal variation, one-time large orders or other factors. Tactical outsourcing can also give temporary relief of bottleneck situations when a lab is overwhelmed by large volume or slow output. Strategic outsourcing, on the other hand, involves a long-term partnership. By utilizing this type of outsourcing, a company/laboratory can reap many long-term benefits, including decreased overhead costs and the ability to advance projects of lower priority. When choosing an out-sourcing lab it is important to know what types of testing or consultation you require. Many laboratories specialize in certain techniques or analyses, whereas others provide a more general spectrum of testing. The list of analyses and testing available through external providers is long and covers every aspect and angle of analytical, pharmaceutical and microbiological testing. The list can range from method development/validation and drug product tests for identification and potency to microbiological testing for sterility, endotoxins or fungal agents. Due to the great diversity in analyses and testing available, identifying what services will best suit your needs is a critical step in the decision to outsource.

Why Should You Outsource?
The reasons laboratories outsource are as varied as the analytical processes currently being outsourced. There are many financial and analytical benefits to employing an outsourcing lab. One of the most prominent reasons companies outsource is to access expertise, experience and expensive analytical equipment not available in-house³. Outsourcing analyses that require a high degree of technical expertise or expensive instrumentation can save a company money by eliminating the need to employ an expert in the field or buy capital-intensive instrumentation for what would be limited use. Using a contract laboratory can also help in the management of special, extremely large, low priority, and new projects. Outsourcing analysis on projects in the very first stages can give labs an advantage by allowing for pretesting or trial runs before an investment of time or money is made⁴.

Also, projects low on the priority list due to lack of instruments or analyst time can be developed without neglecting higher priority projects. Contract laboratories can even help manage multiple projects or help alleviate bottleneck situations. By choosing to outsource specific analyses, a laboratory can benefit from the contract laboratories accreditations, quality control and quality assurance processes and protocols. Extensive accreditations, certificates, compliances and QA policies can be costly to develop and maintain. Another benefit to outsourcing can be the separation of the QC analyses from the in-house lab. Using an independent QC lab can help by providing an objective opinion about current procedures and analytical techniques. While there are many financial incentives to outsourcing, such as completing more projects in less time, the primary financial reason to outsource is to save money; outsourcing will allow a company to have fixed costs for analyses and even lower overhead based on the extent of its needs.

Drawbacks and Disadvantages
Although outsourcing can be an extremely rewarding analytical option, there are a few drawbacks. One issue laboratories encounter is selecting the outsourcing lab that will best meet their needs. It is estimated there are more than 50,000 laboratories currently offering analytical/pharmaceutical outsourcing with more options being added every year⁴. With such a great number and wide variety of choices, merely selecting a laboratory to meet your needs is a demanding task. Another drawback is that, despite the finest efforts of all parties involved, outsourcing does complicate the analytical process. No amount of communication or good intentions can compensate for the fact that adding people and steps makes the process more complicated. A third, and perhaps most difficult issue to deal with, is the conflict between in-house analysts and the outsourced laboratory⁴. Since testing and services are being outsourced, analysts may feel their job security is being threatened. Also, many analysts would rather see new technologies purchased and perform the outsourced analyses in-house instead of having analyses they feel they are capable of performing sent elsewhere. Even with these considerations, the financial and analytical advantages often supercede the obstacles that may need to be overcome.

How To Find a Laboratory
Despite the fact that there are thousands of laboratories willing to accept your work, it can be a challenge to find the one that meets the most of your criteria. Typical means of finding a laboratory includes sharing ideas with colleagues, using outsourcing directories, or researching options on the Internet. The Internet has also provided some unique options geared specifically to outsourcing in scientific fields.

One example is LabSeek, a Web-based company created in 1999 specifically to help people find laboratories for analytical outsourcing⁵. A visitor to the LabSeek website can use a tool called “Quick-Seek” to search for laboratories and submit requests for proposals (RFP) based on techniques, methods, instrumentation, certifications and specialty areas. QuickSeek immediately confirms if LabSeek has a laboratory that can meet the requirements and allows the visitor to submit information to request a proposal online. The information is then distributed to the LabSeek Member Laboratories that have the necessary capabilities, and they can then choose to provide a proposal. LabSeek continues to spark interest because of the company’s ability to provide virtually any type of scientific service, based on its proprietary database of member laboratory capabilities.

Choosing a Lab and Making Sure It’s the Right One
When choosing to outsource, it is of paramount importance to choose a company wisely. There are several factors to be considered when choosing a lab: qualifications of the lab and its personnel, customer service, data and time management, and financial stability. Each of these factors can help determine which lab is right for you.

The primary factor in choosing a lab is the consideration of its qualifications. The best way to assess a laboratory’s qualifications is to perform an on-site audit, before any contract is signed or samples are sent. Information that should be reviewed and confirmed during an audit includes: an organizational chart of the company, personnel training and qualifications, Standard Operating Procedures and policies, and calibration and maintenance of instrumentation. Additional information one should acquire are the accreditations and guidelines set by the controlling bodies in your area of testing to ensure that the outsourcing lab follows those guidelines. For example, laboratories testing pharmaceutical samples should follow the good laboratory practices (21 CFR Part 58) and current good manufacturing practices (21CFR Part 210 and 211) defined by the FDA. Each part of the audit can provide valuable information about how the outsourcing company is run, how samples are handled, and how analyses are performed.

Sponsors should request a quality packet from potential providers, perhaps offering a statement of quality from the quality assurance director, GLP and cGMP compliances, a description of laboratory services, a copy of the most recent pre-FDA audit, and a copy of FDA registration. The qualifications of the particular analyst(s) who will be performing your analyses is another important consideration. You should ensure that the analyst performing your testing is competent and qualified to perform that type of analysis. You may even want to consider an on-site meeting with the analyst.

The most important factor is the quality of work produced and the level of integrity evident in the lab. You might consider talking to other companies in your field that employ outsourcing labs to find out if they are satisfied with the quality of work being performed. Also, find out if your testing will be subcontracted. If so, be sure to find out enough information about the subcontracted laboratory to feel confident you are receiving the quality of testing you require.

The second consideration when choosing a lab is customer service. Look for companies with knowledgeable customer service representatives who are willing to work with you. Good customer service begins with good communication by both parties. Be sure they have answered your questions and you feel confident about working with them in the future. Also, they should return your phone calls in a timely manner. The customer service department will most likely be your first point of contact in the company; be sure you feel comfortable working with them.

Data and time management are important in determining whether a certain lab can meet your needs and demands. Time management for outsourcing translates into turnaround time. No matter the quality of the data produced, if it takes too long, it is of little use. When looking at outsourcing labs, it is important to find out how long it will take to receive data on the particular testing you are interested in. For example, some companies have a standard turnaround time of 10 business days, excluding long-term projects and special projects. Data management is also an important factor. You should consider how the data will be presented to you, how long samples are retained post analysis, how long data is kept on file, and how data is handled when it is out of expected range. Another factor in data management concerns documentation of contracts, confidentiality and financial documents. You should understand and feel comfortable with how all of these documents are maintained before contracting a laboratory.

The last major factor to consider when choosing a lab is the financial aspect of the company, including its stability. The best way to determine a company’s financial stability is to look into its history. Most companies, upon request, will provide general financial information such as trade references, how long they have been in business, name of their banking institution, and Dun & Bradstreet (D&B) number. Many outsourcing companies will require the same information in return, to help ensure the sponsor lab’s stability and ability to pay. Another financial factor is the pricing of testing and services. It is important to remember; cheaper is not always better.
You should look for a lab with economical and competitive prices, but beware of hidden cost. Fees vary greatly between institutions, as well as between analyses. Additionally, some companies charge on a per-hour basis while other charge per analysis. Be sure you are familiar with the outsourcing company’s prices and billing system before testing begins. Overall, choosing the right lab for your needs is a critical step in the outsourcing process. It is important to ensure the company is not only viable in the scientific realm but also in the financial one. Above all, find a lab you are confident in and feel you can work with successfully.

Outsourcing is a scientifically viable and financially valuable tool for pharmaceutical and biopharmaceutical companies. By determining what type of outsourcing is required and choosing the most appropriate laboratory, companies can reap a great deal of benefits, which far outweigh the drawbacks. Whether your need to outsource is temporary or you’re looking for a long-term option, there are an abundance of testing options, so choose wisely. Make sure the laboratory you choose not only meets your scientific needs but your financial, information management and customer service needs as well.

References

1)	Outsourcing Analytical Testing (2002). www.isourceonline.com
2)	Assessing Bioanalytical Services (2001). T. Halls. Contract Pharma. September 2001.
3)	Making the leap from Tactical to Strategic Outsourcing (1999). L. Macdougall. Contract Pharma. December 1999.
4)	Outsourcing Analytical Services (2002). A. Wood and G. Deborski. Contract Pharma. October 2002.
5)	www.labseek.com