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What is required for business success?

This survey identified 43 pharmaceutical outsourcing  vendor companies  whose  range  of services is distributed over the entire value chain of pharmaceutical R&D. Nonclinical contract research including disease models is provided by six vendors, whereas 13 provide clinical trial services and nine companies are engaged in contract manufacturing. The rest of the companies are active in biostatistics, bioinformatics, and diverse special services. The majority of the vendors are either microenterprises or small enterprises. Only eight are medium-sized or large enterprises employing more than 50 people. The companies are often spin-offs of university groups and are characterized by a high level of know-how. The large enterprises are established companies with a longer life-span or the result of recent consolidations. The turnover of the three largest companies accounts for 58% of the entire business volume (€94 M out of €162 M).

The global pharma outsourcing business has undergone constant change during the past decade, reflecting the challenges of and trends in the pharmaceutical field. Clinical research organizations (CROs) actively form mergers and strategic partnerships with their pharma clients, becoming continuously larger and better able to offer an increasing service portfolio. Yet smaller pharma clients are best served by outsourcing vendors of equal size. In addition, there are niche markets for specialized services. In Finland, the number of clinical trials has seen a significant decrease during recent years, which is reflected in the declining turnover of CROs engaged in clinical trials.

According to the survey, the main challenges facing outsourcing companies are:

  1. Credibility issues owing to their small size. Pharmaceutical companies are unwilling to take the risk of outsourcing tasks to companies where critical skills lie in the hands of only a few persons.
  2. Unless the service provided by a vendor is absolutely unique, pharma clients wish to acquire a range of services from the vendors they approve. This is because the evaluation process involved is lengthy.
  3. Lack of marketing power.
  4. Limited resources in business management.

The interviews revealed the following keys to success:

  1. A service product built on solid core competence that withstands critical assessment.
  2. A product that has undergone conceptualization to deliver the intended benefits to customers.
  3. Flexibility in the content of service-provision, including accessory know-how. This is particularly important when dealing with smaller customers.
  4. Sufficient resources to keep up with cuttingedge know-how and the updating of products in accordance with new know-how.
  5. Activities are undertaken to increase the range of services and resources through either networking or consolidations.
  6. Professional business skills are in place for managing business intelligence, for understanding customer needs, the competition, risks, for providing effective marketing tools, and for winning new customers.

Successful companies have typically understood the importance of serious marketing efforts with face-to-face contacts in order to acquire international customers. Business growth has been obtained through consolidations (domestic or international), by networking with companies offering synergistic services, or through strategic partnerships. The last alternative was the strategic choice of a large renowned company manufacturing active pharmaceutical ingredients. In addition, the mindset of a successful company includes the flexibility and sensitivity needed to adjust the company’s strategy to the rapidly evolving environment.


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1. Introduction
2. Contracting of the survey
3. Definitions  
4. Strategic landscape 
4.1 Global Venture Capital Funding  
4.2 Trends in the pharmaceutical industry affecting pharmaceutical outsourcing service-providers
4.3 Market for contract research organizations
4.4 Situation on the Finnish market
5. SWOT analysis
6. Results of the survey 
6.1 Future prospects of the international service field  
6.2 Overview of the services and business arena
6.3 Conclusions based on the  interviews conducted 
6.3.1. Pharma companies as sponsors for outsourced services 
6.4 Critical success factors for a continuous customer relationship 
7. Conclusions 
8. Selected references 
9. List of Appendices 
Appendix A.  
Appendix B.  
Appendix C.