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Outsourcing is not new in the biopharmaceutical field. Contract research, drug manufacturing, and sales organizations have existed for a long time. If it works well, it can be a way to improve operational efficiency and reduce costs, but if it does not work well, it will bring considerable challenges, increased risks and decreased profits. In addition to sales, what is new is that large pharmaceutical companies and small biotech companies outsource a wider range of business functions. As options increase, these features are exciting and growing. However, in order to maximize the potential of this new field, some pitfalls need to be avoided.
Currently, the frontiers of outsourcing business functions include a wide range of product options that seek to support business operations, including marketing and sales operations, marketing, and market access (in whole or in part). These products can be a la carte, or recently as a one-stop shop where the supplier integrates all the functions of a large pharmaceutical business organization and provides it to smaller companies as a package of services. Despite the pros and cons of both, the fact remains that, overall, outsourcing provides various benefits for companies large and small.
Large pharmaceutical companies have taken advantage of outsourcing, including patient and reimbursement centers, contract sales that provide additional support for major brands, or focus on non-core products, and digital promotion of mature brands. Smaller biotech companies have only just begun to tap their wealth.
Traditionally, when emerging biotech companies plan to commercialize, they have two options: build it yourself, which is highly resource-intensive and complex, but you retain all potential revenue growth or license it out. This can be Simplify and reduce expenses but significantly reduce profitability. Today, several suppliers offer a third approach, providing a plug-and-play series of products commonly found in the field of large pharmaceutical companies for emerging biotechnologies.
Benefits include ready-to-use expertise, speed of expansion, and the ability to immediately adjust the scale of all back-end system and process design, pre-testing, and released testing. If you want, this will simulate launching a new product in a large pharmaceutical company where people, processes, systems, and functions are up and running and the products are suitable.
Don’t think “if you build it, they will come” but think, “if you buy it, it will be faster (better) than building it.” In essence, small agile companies can do it in half the time Acquire the much-needed expertise within, and if they conduct due diligence, they will know exactly what they will gain and guarantee it will work.
In addition to providing much-needed expertise, outsourcing can accelerate scale expansion, allowing small companies to have the capacity to organize 300 people within a few weeks. Such a significant shortening of the delivery cycle can significantly reduce cash consumption, because the system, process, and personnel can reach the best position closer to the release.
The third benefit of outsourcing is that it enables small companies to immediately adjust their scale without hiring (or firing) full-time employees (and the human resources, IT, and infrastructure that will subsequently be required). The ability to transform quickly is the key to maintaining innovation and sustainable development for small innovative biotech companies.
So, what are the pitfalls?
Outsourcing is not a once-and-for-all solution. The company cannot outsource supplier selection or supplier management. Like any relationship, it requires insight, commitment, consistency, and care (ie management). Here, we can learn from our clinical colleagues the supervision required by CRO. Outsourcing commercial execution is not an outsourcing business strategy. Still need to hire experienced senior marketing, market entry, and sales and operations executives as FTE to ensure that the strategy is suitable for the company and product.
As on any boundary, there are good and bad. Finding the right supplier is crucial. For this, the company needs internal talents with the necessary expertise to understand what to look for in suppliers. Marketing experts will know what a good digital marketing provider can provide. The same goes for sales, visits, and other functions. Successful companies will invest in advance to understand what problems they have and what they need from suppliers in order to establish effective relationships and coordinated incentives.
Once a supplier is selected, it is critical to ensure that the correct processes and governance are in place to successfully manage the relationship. Investment is essential, especially because the supplier is usually the spokesperson of the company. Therefore, treating this relationship as an alliance and partnership, and using the right expertise internally to manage and cultivate this relationship is the key. The skills required to supervise internal teams are different from those required to supervise virtual teams. The importance of culture and hiring and motivating the team remains crucial. Although brand decisions are still within the company’s purview, the company’s talents need to be able to explain and sell these decisions for support.
In the end, measuring success is crucial, both to celebrate success and to correct the course when needed. The necessary indicators will be qualitative and quantitative. Sales or visit targets and indicators need to be built-in and negotiated through contracts, and internal expertise will determine quality standards. Some suppliers provide risk sharing for profit sharing, providing sales forecasts and other metrics. The key is to remember that understanding which goals are critical to the success of the brand. They may be unique to the company and cannot be outsourced.
This is an exciting time. As business outsourcing becomes more complex, it allows for greater innovation, as small and ambitious biotech companies are given the strategic power to bring required healthcare solutions to market. Companies big and small can choose the capabilities they want and need to develop in-house, and outsource the rest. Suppliers that provide these solutions will continue to develop and grow to ensure that the market is healthy and scale will not become an obstacle or obstacle to new ideas.
Photo: elenabs, Getty Images
