Article

Do Strategic Partnerships Meet Outsourcers Expectations?

Source: ISR Reports

By Kate Hammeke, VP of Market Research, Industry Standard Research (ISR) @ISRreports

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In a recent study of outsourcing model usage, ISR asked companies that outsource commercial manufacturing to allocate the proportion of manufacturing that is conducted in-house, and to assign the proportion conducted tactically, through preferred providers, and via strategic partnerships. Among drug innovator companies that outsource commercial manufacturing (companies that conduct all manufacturing in-house were not included as participants in the survey), an average of 37% manufacture in-house. Interestingly, the proportion of commercial manufacturing outsourced is evenly split among the three outsourcing models studied in the research. One-fifth (20%) is sourced tactically, 21% is contracted via strategic partnerships, and 22% is allocated to preferred providers. Only slight changes in these rates are anticipated over the next three years, where the proportion allocated to preferred providers and strategic partnerships will increase to one-quarter of commercial manufacturing, while tactical outsourcing will remain steady, and a small decrease in in-house manufacturing is anticipated. This decrease in in-house manufacturing is likely tied to an increase in the number of commercial products without a corresponding increase in expanding in-house capacity.

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