R&D No longer an in house job

Astra Zeneca recently announced that they will be putting a halt to finding drugs to treat a range of diseases such as ovarian cancer and depression. They plan to re shuffle their research and development departments. It seems big business will be pulling their R&D from across Europe. Astra Zeneca itself has confirmed they will pull sites from across the UK and plans to extend these closures in both Sweden and the US culminating in a loss of 1800 R&D positions Worldwide.

Astra Zeneca is being forced to slash costs as it braces for patent expiries on two of its most valuable drugs this year. There is no doubt that the expiry cliff is a challenge for all big Pharma but will this lead to a global R&D Pullback? This was one of the questions debated at Europe’s most elite union of Pharmaceutical executives – the illustrious NGP Summit held this week in Portugal.

“The increased pressure over the last decade to reduce costs and time-to-market has led to Big Pharma outsourcing of not only their traditional noncore company functions but, increasingly research and development projects in drug discovery” said a spokesman for the NGP summit committee.

Eastern Europe, previously a market leader in outsourcing projects now faces competition from both China and India. CRO’s are also looking in shared propriety rights which half the responsibility but share the rewards of developing a certain product.

Key topics discussed at the NGP EU summit included the Globalization of drug development and its effect on outsourcing, Skill sets required for management of outsourcing and transforming relationships with CROs from transactional to partnership models. Willy van Buggenhout VP WW Healthcare Compliance at Johnson & Johnson started proceedings alongside other visionaries from Novartis, Pfizer, Roche, Sanofi Pasteur and Astra Zeneca will discuss their moves to CRO (contracted research organizations) and the financial effects on their companies.

With an age of the expiry cliff approaching and a move towards contracted research organizations, is this the end of pharmaceutical companies as we know them? And are job cuts an inevitable reaction to this new business style?