The Evolving R&D Outsourcing in Pharma Sector


Pharmaceutical companies are outsourcing their R&D activities to third party organizations to stay competitive in the market

We all know that new medicines introduced into the market result from lengthy and costly research and development (R&D) conducted by most pharmaceutical companies. According to efpia (European Federation of Pharmaceutical Industries and Associations), in 2019, the pharmaceutical industry invested more than € 37,700 million in R&D in Europe. The geographical balance of the pharmaceutical market – and ultimately the R&D base – is likely to shift gradually towards emerging economies. Therefore, one thing is certain – pharma has entered into 2021 with a greater presence and more funding than before.


With respect to R&D outsourcing there continues to be a need for CDMOs (contract development manufacturing organizations) and CMOs (contract manufacturing organizations) to have a global presence. According to the Congressional Budget Office (CBO) in the USA, the pharma industry is now spending nearly 10 times what it spent per year on research on development during the 1980s.  Over the years, new types of drugs have been developed like for instance, specialty drugs developed to treat complex, chronic and rare health conditions, are now increasingly popular and make up a large share of the drugs approved by the FDA.  These specialty drugs often require specialized handling and storage and include the category of biologics.

What are the R&D tasks that are frequently outsourced by pharma companies?

  • Basic research
  • Late-stage development
  • Genetic engineering
  • Target validation
  • Safety and efficacy tests in animal models
  • Clinical trials involving humans


What are the top reasons for outsourcing your R&D?

  • Make connections within the industry and develop your brand recognition and reputation with potential clients and customers.
  • Reduce cost and utilize the money can on wages and training.
  • Contracting with another company would mean a laboratory does not have to buy large equipment and avoid major long-term investments.
  • Access expertise of an entire team that is ready to begin work.
  • Get access to the most up-to-date technologies needed to do work efficiently.

In recent times, new therapeutic modalities, including those to fight Covid-19, require unique development strategies that go beyond traditional approaches. During this critical time, it has become essential to leverage expertise, know-how and technologies to help advance drug development and manufacturing. In conclusion, in the face of restrictions placed on the industry due to the global pandemic, R&D outsourcing to CDMO/CRO has never been more crucial.