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Table of Contents

The Future of R&D Outsourcing

Challenges facing drug developers
Dynamics of outsourced R&D
R&D outsourcing in Asia
Strategies to optimize R&D outsourcing relationships
The future of R&D outsourcing

Chapter 1 Challenges facing drug developers

Summary
The drug approval process

US
Europe

The Mutual Recognition Procedure (MRP)

The National Competent Authorities

Rising financial pressure

Expiring patents on blockbusters

Decreasing market exclusivity

Healthcare cost containment

Rising usage of generics
Elimination of coverage
Step therapy
Utilization of OTCs Manufacturer rebates

Consumer skepticism of drug benefits

Drug development imperatives

Targeting large markets
Focus on efficacy
Expansion into biologicals
Decreasing time to market

Drug development hurdles

More complicated disease targets
Rapidly escalating costs
Reduced R&D staff
Heightened regulatory scrutiny
Declining drug approvals

Conclusion

Chapter 2 Dynamics of outsourced R&D

Summary
Contract research organizations

The role of CROs
Services offered by CROs

Discovery
Preclinical evaluation
Clinical trials
Repositioning

Expanding technological expertise

Reasons for outsourcing R&D
Types of relationships

Preferred vendors
Functional service providers
Risk sharing
Technology partnerships
Drug licensing

Benefits and limitations of using CROs

Long term cost savings vs. high short term expenses
Speed to market vs. potential project overruns
Access to expertise vs. CRO staff turnover
Flexibility vs. loss of control
Ability to customize research vs. CRO clutter

CRO usage

Usage estimates 2009 - 2014

Leading CROs
Conclusion

Chapter 3 R&D outsourcing in Asia

Summary
Introduction

Offshore outsourcing of clinical research
Offshore outsourcing of preclinical research

Contract research in India

Key outsourcing issues

Intellectual property
Regulatory issues
Business issues and infrastructure

Leading players

CRO usage and market size
CRO developments in India
Case study: GlaxoSmithKline

Contract research in China

Key outsourcing issues

Intellectual property
Regulatory issues
Business issues and infrastructure

Leading players

CRO usage and market size
CRO developments in China
Case study: Eli Lilly

Offshore outsourcing partnerships

Types of relationships

Early stage collaborations
Global networks

Conclusion

Chapter 4 Strategies to optimize R&D outsourcing relationships

Summary
Introduction
Key causes of and remedies for R&D outsourcing failures

Outsourcing strategy
Supplier evaluation and selection
Contracting

Renegotiation

Project organization and expectations
Supplier management
Culture

Corporate cultural differences
Ethnic divergence

Management changes and personnel turnover

Management changes
Personnel turnover

Intellectual property

R&D outsourcing best practices

Case study: Wyeth
Case study: AstraZeneca
Case study: Eisai

Conclusion

Chapter 5 The future of R&D outsourcing

Summary
Introduction
The drug development landscape in the US and EU

Near term: 2010 - 2011
Long term: 2012 - 2015

R&D outsourcing trends

Near term: 2010 - 2011
Long term: 2012 - 2015

Conclusion

Index

List of Figures
Figure 1.1: US and EU spending on generic drugs, 2009
Figure 1.2: US NME approvals vs. R&D spend ($bn), 1990-2009*
Figure 1.3: Average US R&D spend per NME approval ($m), 1990 - 2009*
Figure 2.4: Services offered by CROs
Figure 2.5: Potential benefits and limitations of using a CRO
Figure 2.6: Growth of outsourced R&D by segment ($m), 2009-14
Figure 2.7: Market analysis of major CROs, 2009
Figure 3.8: Advantages and disadvantages of leading Asian outsourcing venues
Figure 3.9: Clinical and preclinical test capabilities of India and China
Figure 3.10: Growth of outsourced R&D to India by segment, 2009-14
Figure 3.11: GlaxoSmithKline sales vs. R&D expense (?m), 2000-09
Figure 3.12: Growth of outsourced R&D to China by segment ($m), 2009-14
Figure 3.13: Eli Lilly sales vs. R&D expense ($m), 2000-09
Figure 3.14: Key characteristics of offshore partnering relationships
Figure 4.15: Risk factors when outsourcing R&D
Figure 5.16: Confidence level of drug development & outsourcing predictions, near vs. long term
Figure 5.17: Drug development trends, near vs. long term
Figure 5.18: Relative usage & growth of different types of R&D outsourcing relationships, near vs. long term
Figure 5.19: R&D outsourcing trends, near vs. long term

List of Tables
Table 1.1: CDER Drug Advisory Committees, December 2009
Table 1.2: Leading European National Competent Authorities, 2009
Table 1.3: Leading European National Competent Authorities, 2009 (ctd)
Table 1.4: Revenues and patent expirations for selected companies' blockbusters, 2009
Table 1.5: Leading medicinal research areas, 2009
Table 1.6: Significant R&D staff reductions, 2008-09
Table 1.7: US NME approvals, 2000-09
Table 1.8: US R&D spend for approved NMEs ($), 1990-2009
Table 2.9: Key characteristics of CRO partnering relationships
Table 4.10: Reasons for time and budget overruns
Table 4.11: Corporate cultural characteristics of sponsors and contractors
Table 5.12: Global growth of outsourced R&D by stage ($bn), 2009-14