pharmaceutical companies, big and small, have been outsourcing work to contract
research organizations (CRO’s) and contract manufacturing organizations
(CMO’s). There are several advantages and disadvantages with this. In spite of
these numerous advantages, there are many challenges faced while working with
CRO’s and CMO’s.
Pharma industry in India is playing a vital role in the healthcare area of the nation. The pharmaceutical companies not only contribute to the health care of the people, but also contribute to the economy of the country by creating jobs, developing ancillary industries, export earnings, contributing to the Gross Domestic Product (GDP) etc. Hence, the growth of pharmaceutical sector of a country is important for the growth of the country’s economy.Apart from this there are various other difficulties faced by CMO and CRO. Some main issues faced by them are to bring new product to basket and technical issues and challenges faced for successful product launch into market. For the clearance of the multiple issues or to meet the gaps in the product development issues and for its launch preparations, extensive experience and expertise on new product development are required.
As per me, the pharmaceutical outsourcing industry is facing some significant challenges:
· Difficulties in establishing trust about quality and robustness of the product that gets manufacture at CMO’s.
· Visibility Issues: New product pipeline of marketing companies and product pipeline available with CMO’s
· Technical Data: Complete data non-availability on Day one at CMO’s. Data availability in fragments.
· In the early years of the relationship, it is difficult to understand the company value system of the CRO and CMO, which may generate conflicts (despite making a quality agreement). Once a quality issue is raised, an investigation and resolution can become time-consuming, expensive and a headache.
· If things are not done accordingly and fall through the cracks, it is easy to criticize personnel within the CMO. However, this might have long-term implications because the project manager has to continue to work with the CMO staff to ensure operational streamlining.
· One assumes limitless flexibility with CRO’s and CMO’s. It is assumed that the production schedule with the CMO can be modified, shifted, decreased or increased whereas the reality of the experience could be the total opposite.
· The CMO may be running a very lean operation and may not have staff to keep track of paperwork. This may pose complications when filing the product with the FDA.
· Being a small company, the CMO may not have well developed procurement and supply chain systems. This could put the corporation at a major disadvantage.
Thus I would like to conclude that though outsourcing in pharmaceutical industries plays an significant role in Cost Saving, focusing on drug discovery, Less Capital Investment, Geographic advantage and Flexibility however, there are other factors such as Quality Control, Flexibility, Loss of Intellectual Property, Change in Management, Visibility and Time Delays are also very important which are to be considered by client before they outsource their non-core business activities. If all these issues are sort out then there won’t be any of these gaps in outsourcing and certainly CMO’s can provide better solutions to their clients in many ways.