SOURCE: Kalorama Information

June 30, 2008 16:50 ET

Outsourcing Is Ailing Pharma's $5 Billion Remedy to Costly Drug Discovery Process

NEW YORK, NY--(Marketwire - June 30, 2008) - Enhancing the productivity of the drug discovery process, while also reducing costs, is imperative if the pharmaceutical industry is to resolve the dilemma of rising R&D expenses and slowing pipelines. Towards this end, companies are turning to outsourcing to access new technologies and expertise. According to a new report from Kalorama Information, 'Outsourcing in Drug Discovery, 3rd Edition,' the global drug discovery outsourcing market reached $5.4 billion in 2007 and should continue to grow 16% annually through 2013.

The pharmaceutical industry has a long history of outsourcing non-core functions and has outsourced a number of core functions, such as clinical trial management and manufacturing, for the past two decades.

More recently, outsourcing has expanded into the drug discovery process, an area that has become increasingly complex since the 1990s, following advances in molecular biology and the emergence of new generation biological therapies. These advances, plus the emergence of new technologies used to accelerate the discovery of new drugs through enhanced data reliability and analysis, have made it unsustainable for companies to undertake all drug discovery functions in-house, as most do not have the expertise or programs to fully utilize these novel technologies.

"Outsourcing isn't a new idea, but in recent years it's become essential in widening the bottlenecks in the drug discovery process," said Bruce Carlson, Publisher of Kalorama Information. "Double-digit growth will be seen in a wide range of advanced processes -- including genomics, proteomics, and integrated crystallographic data collection and computation techniques."

However, issues over loss of control, intellectual property and confidentiality remain a concern for some companies. To this are added worries about regulatory compliance, political stability and contractor's reliability when dealing with offshore CROs. Nonetheless, the benefits outweigh concerns, and since 2001, growth in spending on contract drug discovery has outpaced that of global R&D spending.

Kalorama Information's report 'Outsourcing in Drug Discovery, 3rd Edition' discusses the increasing trend for pharmaceutical companies to outsource various functions of the drug discovery phase and details the current and future global market, technology developments and offshoring in China, India and Eastern Europe. The report can be purchased directly from Kalorama Information by visiting

About Kalorama Information

Kalorama Information supplies the latest in independent market research in the life sciences, as well as a full range of custom research services. Kalorama routinely assists media with healthcare topics, and can provide experts to speak about markets in the life sciences industry.

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