Healthcare industry question
Hi all, I have a rudimentary question and hopefully some healthcare bankers can chime in. Wondering what is pharma companies (Pfizer, Johnson & Johnson)' actual role in drug development? My understanding is from the initial drug research/discovery to the ultimate manufacturing and sale process, it can be all outsourced to CRO/CDMO/CSO?
Then what does the R&D team in pharma companies do that is not outsourced to CRO? or on a high level what is their role
Interested
Interest too
Large pharma, like the companies you listed (along with Merck, GSK, and many others), participate in the full development, manufacturing, and sale of pharmaceutical drugs. To be more specific, R&D teams will literally create new biologic or small molecule chemistry that addresses a specific disease. Or they may identify a new target to hit with a drug, which they may design around the specific characteristics of the target.
Moving on to the next part of the process, manufacturing, large pharma may sometimes use contracted companies that may have better infrastructure or expertise for making a specific type of drug. Or on the flip side the Pharma company may decide to make manufacture the drug in house, since there may be synergies with other existing processes. Also, if you want something done right, you do it yourself. It is not uncommon for CDMOs to receive comments from the FDA on fixing a quality issue.
It obviously takes a huge amount of time, infrastructure, capital, and expertise to make a drug at scale. Typically mid cap or smid cap biotech companies will use CROs for more mundane processes and CDMOs when commercial stage is met.
Thanks so much for the insight. Would it be fair to say big pharmas/biotechs still do quite a lot of R&D in house but would only outsource select research tasks to CROs? If so, how do they usually determine which part to outsource then
Yes to your first question. Second question you would get the best answer from someone who works in industry.
Think about it logically though. Mundane benchwork tasks that arent worth hiring full time employees and giving lab space? Outsource.
High specialized experiments / animal study that you dont trust giving to a CRO or writing up documentation for the tech transfer? In house.
This isn’t entirely true… a lot of large pharma companies use CROs for clinical trials (phase 1-4 of drug development). CROs have a tech advantage and global reach that allows them to win business vs pharma doing it in house.
Yea large pharma will “invent drugs/molecules” but they aren’t that good at it let’s be honest. They mainly partner with smaller biotechs or just buy them out completely.
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