This year we had 315 industry professionals respond to Contract Pharma’s Twelth Annual Outsourcing Survey, which was down from 375 last year. Forty-two percent of respondents were from pharmaceutical sponsor companies, and the remaining 58% represented service providers. Survey demographics are broken down further beginning on page 76.

When asked if there is an increasing demand for outsourcing this year, 73% of respondents answered yes. The number one reason for this, according to 41% of respondents, is to focus on core competencies (Figure 1). Pharmaceutical company sponsors say they are also outsourcing more because they are virtual (30%), while a significant number say they lack the capabilities in-house (14%).

Figure 2 highlights the top focus areas for sponsor companies’ outsourcing efforts. On page 73 we’ve also compared this to last year’s results to highlight where the focus of outsourcing has shifted.

Sponsors say they are also using contract service providers as secondary suppliers, with 46% saying they are using them for APIs, 39% for commercial supply, 37% for clinical materials. Twenty-three percent say they are not using providers for any secondary supplies (Figure 13).

Sponsor companies report they are continuing to take strategic (50%), as well as tactical (50%), or case-by-case, project-to-project approaches to outsourcing (Figure 3). Change is not likely in the wind as most (74%) are planning to continue this approach (Figure 4). In addition, 80% of sponsor company respondents this year say that they view contract relationships as partnerships (Figure 5). Preferred vendor lists have become less important for respondents this year; roughly 33% of sponsor company respondents say that more than half of their outsourcing budget currently goes to preferred vendors, which is down from 38% last year (Figure 14).

Mid-sized and big pharma companies were tied, leading the pack in terms of seeking service providers (17%) followed by generic pharma (13%); specialty pharma (11%); consumer/OTC (10%); and big biopharma (9%).

Despite growth in outsourcing, both sponsors and service providers point out ongoing challenges in outsourcing relationships. The top issue continues to be communication and culture (Figure 6). One respondent from the sponsor side said, “Only commit to what you can deliver with quality and integrity. Do a good due diligence of the scope of work, maintain transparency and communicate.”

Fifty-one percent of respondents this year cited this as the top challenge of the sponsor-contract services relationship, which was down from 46% last year. Hopefully this is not a sign that communication paths are getting cloudier. Documentation and vendor qualification/selection were tied for the next top challenge cited (34%) followed by quality assurance (25%), scale up and scale down (24%), and regulatory issues, quality control and technology (19%).

From the service providers’ perspective the top challenges cited when working with pharmaceutical companies (see box on page 73) are unrealistic deadlines (69%), insufficient information (67%), infrequent communication (41%), incomplete technology platforms (35%), and inadequate tech support (28%). CP