Wyeth focuses on outsourcing strategy
on that of other pharma companies, but of other successful big
industries, which includes outsourcing or off-shoring anything that
is not a core function.
To streamline its business for maximum efficiency, Wyeth is in the process of adding five process engineers to hunt out and apply the best practices from a range of other industries.
"The cost structure we have now is not sustainable, rising at 12-14 per cent per year," said Robert Ruffolo, senior vice president, Wyeth, at a recent Economist pharmaceutical conference.
"We have a lot to learn from industries such as the oil and film industry which have similar problems to pharma, involving a lot of trial and error before we discover a blockbuster," said Ruffolo.
As another cost-saving measure, Wyeth has classified every part of its business as either core or not core and has been outsourcing or off-shoring all the functions that it believes can be done better by another company.
"This is something that many pharma companies are still uncomfortable doing," said Ruffolo.
"However, the pharma industry needs to realise that it is not special and many of the functions it currently handles in-house are better carried out by third party companies who specialise in what they do," he said.
Outsourcing the function of clinical data management (CDM) to India has already led to "staggering cost savings," and at the same time that the per page cost went down, the overall quality went up, said Ruffolo.
"In addition, outsourcing this function has improved the operational performance of clinical R&D and our phase III pipeline is pumping now compared to other pharma companies," he said.
Ruffolo believes the company's previous internal CDM operations would have collapsed under the strain of the budding pipeline and the in-house infrastructure would have required tens of millions of dollars to support.
Another area the company is experiencing great success in is setting up what it calls "Phase II supercentres," located in areas of high patient density such as India, China, Eastern Europe and Brazil in order to avoid the problems with patient recruiting.
"Previously we were having to set up 100-200 sites to get one Phase II trial done and aswell as taking time, this reduced the quality of the results," said Ruffolo.
"Opening in new global destinations has already cut patient trial enrolment time by half, doubled Phase II success rates and reduced early drug development costs," he said.
Another benefit of putting critical mass in global regions is that some functions can be carried out around the clock due to the time differences, allowing for leaps in productivity, he explained.
