NEW YORK, Feb. 18 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

The Future of R&D Outsourcing: Investigating development hurdles, key challenges & strategies to optimize CRO relationships

http://www.reportlinker.com/p0177864/The-Future-of-RD-Outsourcing-Investigating-development-hurdles-key-challenges--strategies-to-optimize-CRO-relationships.html

For several years, drug developers have been under intense pressure to introduce new products in an environment of escalating R&D costs, blockbuster patent expiration and resulting generic competition, increasingly complex science, heightened regulatory scrutiny, and other pressures. The global economic meltdown has exacerbated these challenges with new R&D staff and budget reductions. In order to remain competitive, drug makers must now do more with less. Outsourcing, particularly to low cost offshore venues like India and China, offers a means to maintain productivity within new cost parameters.

However, while some drug makers have optimized their R&D outsourcing methodologies and have developed sophisticated processes to select, monitor and manage a wide range of projects, many other R&D outsourcing projects fail due to poor planning on the part of sponsors. A large proportion of these failures could be averted as many of the most common reasons for failure are preventable problems relating to R&D outsourcing strategy, supplier evaluation & selection, contracting, project organization and expectations, supplier management, culture, staff turnover and intellectual property.

Key features of this report

• Discussion of the factors leading to current imperatives to increased outsourced R&D.
• Detailed descriptions of both effective and ineffective R&D outsourcing approaches.
• In depth analysis of the types of different R&D outsourcing relationships, their advantages and disadvantages.
• 5 case studies that illustrate R&D outsourcing best practices.
• Comprehensive discussion of offshore R&D outsourcing, particularly focusing on India and China.

Scope of this report

• Understand the driving forces behind R&D outsourcing.
• Save time and money with the report's succinct compilation and analysis of current R&D outsourcing trends.
• Learn how R&D outsourcing will evolve over the next several years and why.
• Assess your competitive position vis-a-vis other drug makers and learn about R&D outsourcing best practices via detailed case studies.

Key Market Issues

(1) Although cost cutting has previously not been a concern for R&D departments, the current economic environment has brought expense reduction programs into research labs. Most of the leading drug makers have recently undertaken and/or are currently in the midst of broad R&D cost cutting programs

(2) Because drug makers must continue to introduce new products, maintaining high productivity is key. R&D outsourcing offers a means to achieve this, particularly via low cost offshore outsourcing.

(3) Most R&D outsourcing programs do not focus on a single approach but include several different types of relationships with contractors. The savviest drug makers combine these approaches in a well thought-out, synergistic manner while many others will implement them in a slipshod, ineffective fashion that results in high project failure rates.

Key findings from this report

(1) Usage of CROs will rise by 9.9% annually through 2014 with the greatest growth in Phase IIIb and IV testing at 13.8% per year.

(2) While the top 10 CROs account for more than half of all R&D outsourcing, more than 1,000 others comprise the remaining 44%.

(3) Offshore outsourcing, particularly to India and China, offers cost savings of 30% to 60% compared to the US and Western Europe.

(4) The 100 Indian CROs tend to be larger and more focused on clinical trials while the 300 Chinese CROs are smaller and many are building strong pre-clinical capabilities.

Key questions answered

• Why is R&D outsourcing rising?
• Which types of R&D outsourcing approaches are currently most common?
• Which forms of R&D cost cutting will increase most in the future?

Table of Contents

The Future of R&D Outsourcing

Challenges facing drug developers 10

Dynamics of outsourced R&D 11

R&D outsourcing in Asia 12

Strategies to optimize R&D outsourcing relationships 13

The future of R&D outsourcing 14

Chapter 1 Challenges facing drug developers 16

Summary 16

The drug approval process 17

US 17

Europe 21

The Mutual Recognition Procedure (MRP) 21

The National Competent Authorities 23

Rising financial pressure 24

Expiring patents on blockbusters 24

Decreasing market exclusivity 27

Healthcare cost containment 28

Rising usage of generics 28

Elimination of coverage 30

Step therapy 31

Utilization of OTCs 31

Manufacturer rebates 32

Consumer skepticism of drug benefits 32

Drug development imperatives 33

Targeting large markets 34

Focus on efficacy 34

Expansion into biologicals 36

Decreasing time to market 36

Drug development hurdles 37

More complicated disease targets 38

Rapidly escalating costs 38

Reduced R&D staff 40

Heightened regulatory scrutiny 43

Declining drug approvals 44

Conclusion 46

Chapter 2 Dynamics of outsourced R&D 50

Summary 50

Contract research organizations 51

The role of CROs 51

Services offered by CROs 51

Discovery 53

Preclinical evaluation 54

Clinical trials 54

Repositioning 55

Expanding technological expertise 56

Reasons for outsourcing R&D 56

Types of relationships 60

Preferred vendors 63

Functional service providers 64

Risk sharing 64

Technology partnerships 65

Drug licensing 66

Benefits and limitations of using CROs 66

Long term cost savings vs. high short term expenses 67

Speed to market vs. potential project overruns 68

Access to expertise vs. CRO staff turnover 70

Flexibility vs. loss of control 71

Ability to customize research vs. CRO clutter 72

CRO usage 72

Usage estimates 2009 - 2014 73

Leading CROs 73

Conclusion 74

Chapter 3 R&D outsourcing in Asia 78

Summary 78

Introduction 79

Offshore outsourcing of clinical research 81

Offshore outsourcing of preclinical research 82

Contract research in India 84

Key outsourcing issues 86

Intellectual property 86

Regulatory issues 87

Business issues and infrastructure 88

Leading players 90

CRO usage and market size 90

CRO developments in India 91

Case study: GlaxoSmithKline 92

Contract research in China 95

Key outsourcing issues 96

Intellectual property 97

Regulatory issues 98

Business issues and infrastructure 100

Leading players 102

CRO usage and market size 103

CRO developments in China 103

Case study: Eli Lilly 106

Offshore outsourcing partnerships 108

Types of relationships 108

Early stage collaborations 109

Global networks 110

Conclusion 111

Chapter 4 Strategies to optimize R&D outsourcing relationships 114

Summary 114

Introduction 115

Key causes of and remedies for R&D outsourcing failures 116

Outsourcing strategy 118

Supplier evaluation and selection 119

Contracting 122

Renegotiation 124

Project organization and expectations 125

Supplier management 126

Culture 128

Corporate cultural differences 129

Ethnic divergence 130

Management changes and personnel turnover 131

Management changes 131

Personnel turnover 133

Intellectual property 133

R&D outsourcing best practices 134

Case study: Wyeth 134

Case study: AstraZeneca 135

Case study: Eisai 136

Conclusion 137

Chapter 5 The future of R&D outsourcing 140

Summary 140

Introduction 141

The drug development landscape in the US and EU 142

Near term: 2010 - 2011 143

Long term: 2012 - 2015 146

R&D outsourcing trends 147

Near term: 2010 - 2011 152

Long term: 2012 - 2015 154

Conclusion 155

Index 156

List of Figures

Figure 1.1: US and EU spending on generic drugs, 2009 30

Figure 1.2: US NME approvals vs. R&D spend ($bn), 1990-2009* 46

Figure 1.3: Average US R&D spend per NME approval ($m), 1990 – 2009* 47

Figure 2.4: Services offered by CROs 52

Figure 2.5: Potential benefits and limitations of using a CRO 68

Figure 2.6: Growth of outsourced R&D by segment ($m), 2009-14 74

Figure 2.7: Market analysis of major CROs, 2009 75

Figure 3.8: Advantages and disadvantages of leading Asian outsourcing venues 80

Figure 3.9: Clinical and preclinical test capabilities of India and China 83

Figure 3.10: Growth of outsourced R&D to India by segment, 2009-14 91

Figure 3.11: GlaxoSmithKline sales vs. R&D expense (£m), 2000-09 94

Figure 3.12: Growth of outsourced R&D to China by segment ($m), 2009-14 104

Figure 3.13: Eli Lilly sales vs. R&D expense ($m), 2000-09 107

Figure 3.14: Key characteristics of offshore partnering relationships 109

Figure 4.15: Risk factors when outsourcing R&D 117

Figure 5.16: Confidence level of drug development & outsourcing predictions, near vs. long term 143

Figure 5.17: Drug development trends, near vs. long term 144

Figure 5.18: Relative usage & growth of different types of R&D outsourcing relationships, near vs. long term 148

Figure 5.19: R&D outsourcing trends, near vs. long term 151

List of Tables

Table 1.1: CDER Drug Advisory Committees, December 2009 21

Table 1.2: Leading European National Competent Authorities, 2009 25

Table 1.3: Leading European National Competent Authorities, 2009 (ctd) 26

Table 1.4: Revenues and patent expirations for selected companies' blockbusters, 2009 27

Table 1.5: Leading medicinal research areas, 2009 35

Table 1.6: Significant R&D staff reductions, 2008-09 41

Table 1.7: US NME approvals, 2000-09 45

Table 1.8: US R&D spend for approved NMEs ($), 1990-2009 45

Table 2.9: Key characteristics of CRO partnering relationships 62

Table 4.10: Reasons for time and budget overruns 127

Table 4.11: Corporate cultural characteristics of sponsors and contractors 129

Table 5.12: Global growth of outsourced R&D by stage ($bn), 2009-14 153

Companies mentioned: GlaxoSmithKline, Eli Lilly, Wyeth, AstraZeneca, Eisai,

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