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When does outsource product development make sense?

Outsource product development has caught the imagination of the entire business world. Sometimes, an enterprise opts for outsourced product development to manage costs, boost bottom line and save time for core activities. Other time

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

s, some strategic purposes such as dispense with some centers located at critical geographical regions have bearing on the option for outsource product development. There are several reasons can be cited for outsourcing option. But the moot question is -When does outsourcing make sense?

Outsourcing p

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

roduct development makes the most sense when:

There is a need for expertise the company doesn’t have or need full time involvement.
There is a need for resources the company currently does not have to complete all of the required work.
It incurs heavily to keep up internal

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

teams to do some or all of the development projects.

There is a desire to incorporate standard practices or fresh approach in the product development processes.

The capabilities to find, evaluate, and hire the outsourcing firm.

Methods, protocols, and resources for commu

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

nicating and managing the outsourcing firm.

Tools, resources, and plans for gaining, storing, and using knowledge transfer.

What are the reasons to outsource product development?

Acquiring Expertise
One of the most plausible an

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

d successful reasons to outsource product development is to acquire expertise not currently available within the company. This lack of expertise could be because of a specific, non-core activity within the company, or it could be due to sudden rise in demand that exceeds the company’s existing capabil

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

ity.

In both situations, outsourcing product development is an excellent way to plug the need for expertise. However, a critical factor for successful implementation of outsourced product development is to ensure protection of all proprietary information, which should be arranged at the earliest or j

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

ust before the onset of the project with some sort of contract.

Building Additional Resources
One very obvious reason to outsource is to supplement the number of development teams available to complete projects. Actually, in most of the cases firms prefer to staff below thei

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

r total development capabilities in order to lower costs and risk, and with outsourcing they escape the possible burden of repetitive layoffs and hiring sprees.

This approach to outsourcing, or resource expansion, works well when the company outsourcing the project understands the capabilities requir

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

ed to effectively outsource a development project. These capabilities include:

Identifying the best projects to outsource
Managing the outsourcing relationship
Identifying the project deliverables
Auditing and smoothly integrating the project deliverables into ex

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

sting systems

Although expansion or augmentation of resources is a common reason for outsourcing, it sometimes acts as a compelling reason for firms to miss out this opportunity. Ineffective cost benefit analysis and an inability to measure internal development costs often leads to conclude

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

that the project can be done internally for less. Inevitably, the internal teams get pressurized and over burdened that lead to delayed and ineffectual product development. Development teams focusing on a single project produce the best results because they avoid the overhead and mistakes that result

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

from multi-tasking across several projects.

Minimizing Development Costs
One very pertinent reason to outsourcing is to minimize costs involved in the development of products. Outsourcing seems to be a better and cost-effective measure, if you take into consideration all co

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

sts involved in maintaining the necessary capabilities within your company, which include:

Employee costs such as salary, taxes, benefits, etc.
Overhead expenditure on office space, desks, computer, training, software and hardware tools, etc.
Supporting costs on informatio

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

n systems, management, human resources, payroll, etc.

Risk costs such as downsizing costs including severance pay, legal support, etc.

In addition, certain irritating questions keep recurring such as:

How do we build and maintain a high quality development team within our

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

corporate culture?

What traits and skills are important? Are those traits and skills available in our area of geography and expertise? How long will it take? What will it cost?

How many teams will we need today and should we try to staff every project internally?

After

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

having done cost benefit analysis on all these posed questions, most firms come to the conclusion that outsourced product development teams cost less than maintaining comparable internal product development teams.

In addition, organizations having internal product development resources that choose to

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

outsource product development projects can have the following benefits of outsourcing:

Gaining new perspective & process
Acquiring quality system reviews, and
Gaining industry standard practices

Most would agree that firms that don’t usually outsource product d

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

evelopment should periodically do so to know how they could improve the results of their internal development teams. To glean the maximum benefit, the firm outsourcing the development should have systems in place to imbibe within the lessons-learned and to integrate them into its systems where appropr

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

iate.

Bottom Line
Thus, it certainly makes business sense to outsource either complete or a part of product development process, which helps organizations build near-term capability, meet increased resource needs, reduce costs, and bring a new development project perspective

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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