By Kate Hammeke, VP of Market Research, Industry Standard Research (ISR)
By Kate Hammeke, Contributing Editor
AT THE TIME, THE FOCUS WAS controlling capacity fluctuations that impacted overall profitability, the work assigned to contractors was commoditized and not directly involved with the generation of intellectual property, and the majority of contracts went to businesses in the U.S. and EU. Ultimately, the opportunity for savings didn’t pan out as desired because hiring out mass production of unspecialized products didn’t provide much of an advantage — the expense of subcontracting was comparable to doing the work in-house.
The true opportunity for savings through outsourcing started to take shape in the early part of the 21st century. Developing countries with strong education systems relaxed their trade borders around the same time that China and India started to strengthen patent laws. While some pharmaceutical companies opted to open their own research facilities overseas, others sought out CROs in these emerging markets. Within a few years, the amount of work and the complexity of the projects increased. The tipping point in the shift of the dynamic between sponsor and CRO from a client/vendor relationship to a partnership — with shared goals, transparent strategies, and mutual trust — occurred when some CROs started to expand their service offering to include discovery programs.