It takes a World

Until just a few years ago, most people working in the United States operated under the default assumption that the US economy was sound, would always be sound, was growing, and would continue to grow. Such is the nature of bubbles.

Economic indicators tell us that the worst is over, but we emerge from the crisis a little bit chastened and somewhat less sure of ourselves. We also discover that the world isn't quite the way it used to be. The great recession has shifted the tectonic plates of commerce and altered the geography of business. As a result, economic isolationism is no longer an option.

This change is glaringly apparent throughout the pharmaceutical industry. In most cases, products that once were made entirely within the confines of a single factory are no longer even manufactured by a single company. A drug discovered by one company might be formulated by another, manufactured by a third, and marketed by a fourth. Service providers now reside in different countries and more often these days, on different continents. If it takes a village to raise a child, it seems to take a world to manufacture a drug.

So what does all of this mean? On one hand, it means that companies now enjoy many options for sourcing ingredients and can get the best services at the best price. And indeed, our annual PharmSource-Pharmaceutical Technology Outsourcing survey indicates that this year, more companies than in years past are actively sourcing materials from India and China or are planning to do so. On the other hand, the global availability of ingredients and services creates additional competition for domestic firms—also evident in this year's survey results.

It also means that adept project managers become crucial to the success of the enterprise. With more pieces of the project in pieces, competent project management is absolutely required to make sure that the project equals the sum of its parts. The difficulty of coordinating services across many different vendors has prompted many service providers to expand their service offerings horizontally and become "one- stop shops."

Naturally, increasing the number of parties involved in a project increases the associated risk and complexity. The logistics of communication and transportation become exponentially complicated as geographic distances and the number of vendors increase. And the greater the distance between supplier and purchaser, the greater are the opportunities for adulteration, contamination, and counterfeiting.

Add to this complexity the potential for natural disasters, as well as economic and political disasters, and the opportunities for disrupted service are indeed large. Client companies need to be certain of the solidity of their outsourcing plans; they also need to put in place contingency plans. In the end, making safe cost-effective drugs effectively may be as much a matter of good project management and solid risk mitigation as it is good science.

Michelle Hoffman is editor-in-chief of Pharmaceutical Technology. Send your thoughts and story ideas to mhoffman@advanstar.com.