J Pharm Innov

DOI 10.1007/s12247-015-9235-4

ORIGNAL ARTICLE

Outsourcing of Regulatory Affairs Tasks in Pharmaceutical

Companies—Why and What?
Anu Gummerus 1 & Marja Airaksinen 2 & Mia Bengtström 3 & Anne Juppo 4

# Springer Science+Business Media New York 2015

Abstract CRO has to assure uniform quality of their personnel knowl-

Purpose The purpose of this study was to investigate what edge and skills in regulatory affairs, i.e., when the person in
kind of regulatory affairs tasks is outsourced in the pharma- charge of the outsourced task changes in the CRO. Practically
ceutical industry and what are the reasons for outsourcing in all product development steps can be outsourced by hiring
the EU countries. local and multinational CROs. The companies should plan
Methods The study was conducted as an e-mail survey in the the outsourcing carefully and compare possible CROs even
pharmaceutical industry in Finland, Sweden, Estonia, if the company has no plans to outsource at present.
Germany, and Spain, focusing on those companies that under-
take regulatory affairs. Keywords CRO . Pharmaceutical industry . Regulatory
Results The survey received 71 completed responses out of affairs . Outsourcing
147, a response rate of 48 %. The most outsourced tasks were
related to translations of product information texts (75 % of
the respondents). The principal reason for outsourcing regula- Introduction
tory affairs tasks to a Contract Research Organization (CRO)
was the excessively heavy workload in the company’s regu- The pharmaceutical industry has a long tradition in
latory affairs. Also, outsourcing should be cost-effective. The outsourcing. About 30 years ago, the outsourcing strategy
fact that the CRO has experience and knowledge was seen as a was adopted to formulation, clinical trials, and registration.
very important requirement when choosing the CRO partner. In the last 10 years, outsourcing has expanded to include most
Personal, individual contacts were mentioned in many of the development and registration processes. Outsourcing has been
open-ended responses as an essential criterion in the selection practiced where capacity and specialist techniques and know-
of the CRO. how are required. Pharmaceutical research, development, and
Conclusions This survey indicated that outsourcing in regu- manufacturing processes as well as quality control can and are
latory affairs will continue. The quality of the CRO has a the subject of regular outsourcing from the largest to the
significant role when the companies select their partner. The smallest of pharmaceutical companies [5].
According to Piachaud [16], the increasing proportion of
pharmaceutical R&D being outsourced would drive future
* Anu Gummerus
growth of the Contract Research Organization (CRO) sector
[email protected] by 10–12 %. A recent study by Cutting Edge Information in
the USA [6] shows that outsourcing has become more com-
1
mon for regulatory affairs tasks. This study found that the top
Oy Medfiles Ltd, Hatanpään valtatie 26 A, 33100 Tampere, Finland
50 pharmaceutical companies have increased their regulatory
2
Faculty of Pharmacy, University of Helsinki, Helsinki, Finland affairs budgets by an average of 27 % during the years 2010–
3
Pharma Industry Finland, Helsinki, Finland 2012. The percentage of outsourcing regulatory affairs bud-
4
Formulation and Industrial Pharmacy Unit, Faculty of Pharmacy, gets in pharmaceutical companies had increased to 68 %.
University of Helsinki, Helsinki, Finland According to Cutting Edge Information, small drug
 J Pharm Innov

manufacturers, as well as medical device companies, also con- relative to the company’s specific requirements and
currently increased their regulatory affairs budgets. Top 20 phar- outsourcing strategy. Companies see themselves as taking a
maceutical companies reported that outsourcing consumes ap- more strategic, rather than tactical, or case-by-case, project-
proximately 10 % of the overall regulatory affairs budget. In to-project approach to outsourcing with most planning to
order to utilize resources more efficiently in an increasingly com- continue this approach. Preferred CRO lists have become
petitive environment, the pharmaceutical industry is outsourcing important for a large percentage of respondents; roughly
a large volume of drug development activities to CROs. From the 45 % of company respondents say that more than half of
global perspective, the companies have started to use India and their outsourcing budget currently goes to preferred CROs in
China as the most popular offshore locations in the past 3 or the year 2014 [4] (Table 1).
4 years [7, 18, 19]. On the other hand, domestic outsourcing is Prior research has shown that the outsourced [16–18]
a fast-emerging strategy among US firms. It means that the and backsourced tasks [9, 20] in the pharmaceutical in-
outsourcing is returned to the USA and is performed by the dustry have been widely studied. Research on outsourcing
company or its strategic alliance [15]. in the pharmaceutical industry has focused mainly on the
There are two main models to outsource pharmaceutical economic benefits of the practice [1]. According to the
processes. Strategic outsourcing enables pharmaceutical com- literature review, the outsourced tasks of preclinical, clin-
panies to focus on their core strengths and long-term goals. By ical, manufacturing, and quality control activities have
outsourcing in this way, companies aim to maintain high-level been studied, while the utilization of CROs in performing
expertise and to reduce the number of internal staff involved in regulatory activities has been of less common interest [2].
those processes that are outsourced. As a result, strategic part- Outsourcing of regulatory affairs is still a growing trend.
nerships between a company and a CRO can offer the com- Regulatory intelligence is a critical part of the success of
pany an opportunity to have more flexible internal resources. the pharmaceutical development process. If the company
Strategic outsourcing also provides expertise, competency, or or the CRO is unable to define the most suitable regula-
resources that the company may not otherwise have. The CRO tory affairs process and the correct documentation, mar-
has to be selected carefully because the service sector and keting authorization for the product can be delayed sig-
quality of CROs can vary depending on what services are nificantly. Therefore, it is useful to study, by scientific
needed and what are the cultural aspects. If the collaboration research, what regulatory affairs tasks have been
is successful, there may be a shift from capacity- to outsourced and what are the service requirements for a
competence-based outsourcing. According to Clemens [3], a CRO. Regulatory affairs services can range from simple
lot of pharmaceutical companies currently focus on only a few tasks to very complex projects involving detailed consul-
full-service CROs within a strategic partner-based relation- tation with relevant guidelines and/or concerned health
ship. The company’s workload is hereby optimized, and the agencies. As for the decentralized and mutual recognition
internal resources can focus on assuring the overall perfor- procedures, outsourcing certain assessment activities and
mance of the CRO. using expert networks among the agencies in a more flex-
Tactical outsourcing, which means contracting out work ible way could improve the use of resources [13].
on a project-by-project basis, is often related to short-term A few common models for outsourcing regulatory affairs
projects. These projects cannot be handled internally due to services are as follows:
a lack of internal capacity or resources allowing streamlining
processes. According to the literature review [3, 8, 11, 12], 1. Personnel augmentation for expanding current capacity to
this model is fading, but apparently not all outsourcing is meet short-term business needs. The company can rent staff
strategic; contracts of both models continue to be employed in-house from CRO. This model helps the company by

Table 1 Examples of strategic and tactical outsourcing of regulatory affairs

Tactical Strategic

✓ Writing and reviewing of pharmaceutical-chemical documentation ✓ Regulatory intelligence

✓ eRegulatory intelligence
✓ Preparation and compilation of marketing authorization documentation ✓ Regulatory maintenance of marketing authorization on
behalf of marketing authorization holder
✓ Preparation and compilation of active master files ✓ Coordination of global submissions
✓ SOP writing and training concerning regulatory issues ✓ Regulatory authority liaison (e.g., regulatory consultation within
the company, scientific advice meeting with the authorities)

Modified from Miller [12]

J Pharm Innov

allowing its core resources to concentrate more on new devel- the questions were designed so that the respondent was able to
opments and regulatory strategies across the development select multiple options. Anonymity was required due to the
pipeline. confidentiality issues relating to the pharmaceutical industry.
2. Project-based outsourcing is a task-oriented activity where Therefore, the anonymity of the respondents was also assured
outsourcing is limited to specific tasks. Companies may out- in this questionnaire. For quantitative analysis of the re-
source a particular project. CRO takes control of the sponses, multiple-choice responses were categorized on a
outsourced activity and becomes responsible for its success. five-point Likert scale. A Bno-opinion^ option was added to
Examples could be a compliance project such as consistency ensure that Bneutral^ was not selected for no-opinion answers.
between national summary of product characteristics and core These no-opinion answers were not taken to account when
company safety information or manufacturing and compli- calculating the average value.
ance information in national dossiers versus what the To assure face validity of the questionnaire, a pilot survey
manufacturing site does. was conducted in late 2010. The pilot survey was sent to five
3. Full-service submission outsourcing, which is suitable for academic and/or industrial experts. The responses of the pilot
post-marketing activities such as variations, PSURs, annual study were not included in the results of the final study. Two
reports, and renewals. comments were received concerning the linguistic form of the
4. Functional submissions, which are applicable for pre- questionnaire. After making the suggested changes to the con-
marketing submissions for clinical trial applications, market- tent of the questionnaire, the main phase on the survey started
ing authorization applications, new drug applications, abbre- in March 2011 and ended in August 2011. The list of
viated new drug applications, and different marketing autho- responding pharmaceutical companies was provided by
rization procedures such as mutual recognition, decentralized, Pharma Industry Finland. The corresponding organizations
and centralized procedures. from Sweden, Estonia, Spain, and Germany provided their
regulatory affairs contact list. Generic Medicines Association
The purpose of this study was to investigate what kind Finland also provided their regulatory affairs contact list. The
of regulatory affairs tasks the pharmaceutical industry companies represented all sorts of companies: innovation
outsources and what are the reasons for the outsourcing based and generic companies, large, international companies,
in five EU countries. subsidiaries, CROs, CMOs, and small/medium-sized stand-
alone companies. If the regulatory affairs director or manager
or a person of similar authority was not known, the question-
Methods naire was sent to the quality or clinical manager or a person of
similar authority. The questionnaire was sent to one person in
The study was performed as an e-mail survey in the pharma- each company. The responding to the survey was done elec-
ceutical industry in Finland, Sweden, Estonia, Germany, and tronically via Helsinki University E-survey tool. The results
Spain, focusing on those companies that undertake regulatory were analyzed with SPSS and transferred to Excel software
affairs. The countries concerned were selected in order to rep- for quantitative analysis. The results are presented as percent-
resent different European Union countries: Finland and ages and frequencies. Responses to the open-ended questions
Sweden are Nordic countries, Estonia joined the EU in were content analyzed by grouping similar themes and ideas
2004, while Germany and Spain are big economies in the [14]. Some representative responses are referred to in the
EU. There are also cultural differences between the north BResults^ section.
and south parts of the EU, which gives greater variety to the
countries chosen for this study.
The survey was designed to cover the main questions re- Results
lating to the present outsourcing situation and the reasons,
advantages, disadvantages, and future of outsourcing of regu- In total, the survey received 71 completed responses out of
latory affairs. Some of the questions were emphasized by 147 questionnaires sent, giving a response rate of 48 %. The
Piachaud’s study of outsourcing in the pharmaceutical majority (59 out of 147) of responses were received from
manufacturing process, which was performed in 2002 [16]. Finland and Sweden (Table 2).
Piachaud’s study was conducted among the pharmaceutical The response rate in Estonia was poor, 9 %, although the
industry, and some of the questions were also appropriate for questionnaire was sent three times. When the results were
this study. The survey consisted of structured questions, and studied closely, there was no difference if the respondent
where applicable, an open field was included to allow the was from Finland, Sweden, or other countries. For this reason,
respondents to indicate issues that were not included in the results from different countries were combined.
structured question. In addition, space was made available for Most of the respondents (80 %) worked in a subsidiary of a
open responses/comments at the end of the survey. Some of worldwide, international company. This reflects the fact that
 J Pharm Innov

Table 2 Location of the pharmaceutical companies responding to the a stand on actual costs, but the companies expect to gain
survey (n=71)
financial benefit from outsourcing.
Country Number of sent Responses Response The strategic decision of a company to outsource regulato-
questionnaires (n) received (n) rate (%) ry affairs was not seen as an important reason to outsource
regulatory affairs tasks. The companies have in-house knowl-
Finland 46 29 63
edge of regulatory affairs, but country-specific expertise is
Sweden 64 30 47
desired. One open-ended outlined what really is required from
Estonia 22 3 9
CROs: Bhelping in product text translations for variation
Spain 6 4 67
applications.^
Germany 9 5 55
Total 147 71
Criteria for Selection of CRO

Big pharmaceutical companies need CROs in situations in-

there are not many headquarters located in the countries in- volving lack of resources, whereas smaller companies are de-
volved in this survey. Moreover, 64 % of the companies that pendent on the overall know-how of the CRO, which can
responded had proprietary products for human use (85 % hu- provide more general help in addition to the acquired specific
man medicines). Many of the respondent companies also dealt service. The requirements of the CRO were defined according
with medical devices (48 %). to CRO’s experience and knowledge, size of CRO, cost-effec-
Most commonly, the responder was a person with the title tiveness, location, how well it is known, recommendation,
Bhead of the regulatory affairs^ (62 % of the respondents), but eSubmission tools, and partnership network (Fig. 1).
there were also several other titles, e.g., regulatory affairs The fact that CRO has experience and knowledge was seen
manager or similar (22 %), head of the company (5 %), and as a very important requirement (98 %) when choosing a CRO
other titles (10 %), such as head of quality assurance, senior partner. It was also asked if the size or location of CRO was a
regulatory manager, responsible pharmacist, vice president or significant issue, but the respondents did not see this as im-
clinical development, and regional regulatory affairs head. portant. According to the responses, it was not relevant if the
The questionnaire reached well the persons in charge of the CRO had eCTD database or if CRO had a global partnership
company’s regulatory affairs functions although the titles de- network. The recommendation of CRO from other pharma-
pend on the organizational structure of the company. ceutical company was acknowledged. The selection of the
CRO was based on recommendations (80 %) or the prestige
of the CRO (69 %). The companies searched for CROs also on
The Reasons for Outsourcing the internet, but only 28 % of the respondents answered this to
be common practice. Moreover, 10 % of the respondents re-
The principal reason for outsourcing the regulatory affairs ported that they collect information about CROs at exhibitions
tasks to a CRO was too heavy workload in the company’s and/or congresses.
regulatory affairs (strongly agree 55 %) (Table 3). The open-ended responses revealed that the headquarters
Too heavy workload can be caused by companies’ strategic of international pharmaceutical companies evaluate the CROs
and/or tactical outsourcing decision. The fluctuation of the and also choose the local CROs. If the selection is done at
workload is difficult to estimate. One comment to the open- local subsidiary level, personal contacts from common profes-
ended field expressed that Bthe management of the company sional history or the company’s own CRO network are used.
has a lack of knowledge whereas on the low level the em- The personal, individual contacts were mentioned in many of
ployees have too heavy workload periodically.^ the open-ended responses as important criteria for the selec-
Naturally, the outsourcing should be cost-effective, and this tion of the CRO. Responses received from Finland specifical-
was also a finding of this study (27 %). This study did not take ly mentioned that workforce with regulatory affairs skills is

Table 3 The reasons for outsourcing (mean, 1=strongly disagree, 5=strongly agree)

Reasons for the outsourcing of the regulatory affairs Likert rating (1–5) (mean value) Standard deviation

Too heavy workload in the regulatory affairs department of the company 4.4 0.9
Cost-effectiveness 2.8 1.2
Company’s strategic decision to outsource the regulatory affairs 2.6 1.4
Company has not enough knowledge of the regulatory affairs 2.1 1.3
J Pharm Innov

Fig. 1 The requirements for CRO has experience and knowledge of the regulatory affairs
CRO (mean, 1=strongly disagree,
5=strongly agree) Cost effecveness

Recommended CRO company

Known CRO company

Locaon of CRO

Other outsourced services from the same CRO company

CRO has the eCTD database

CRO company has global partnership

Size of CRO company

0 2 4 6

Beasy to get because there are only three professional CRO Related to the translations, almost half of the respondents
companies in Finland.^ reported that the readability testing of the PL has been
Given that the pharmaceutical industry is a highly regulated outsourced to CROs. The readability test has to be done in a
sector, it was not surprising that one respondent pointed out local language, and in these cases, a local CRO can conduct
that Bit is hard to find a CRO that would take full regulatory the user test. These tests are needed not only mostly for the
responsibility of a product; sometimes it easier to do it your- new marketing authorization applications but also in case of
self than explain.^ This may also express a concern over the extensive variation application concerning the product infor-
outsourcing partner involved and their qualities, or lack of mation texts.
them, such as ability and trustworthiness. As companies want to concentrate on core functions and
new marketing authorization procedures, 44 % of the respon-
dent companies have outsourced the regulatory maintenance
The Outsourced Regulatory Tasks of marketing authorizations, i.e., full-service submission.
CROs have full responsibility of regulatory maintenance of
The most outsourced tasks were related to the translations of the products. The companies outsource submissions of the
the product information texts. CROs have local language ex- variation types I (40 %) and II (44 %) to CROs but prepare
pertise for translating summaries of product characteristics the renewals and notifications themselves. One fifth
(SmPC) and package leaflets (PLs), along with labeling texts responded that they have outsourced the process of a new
(Fig. 2). Many of the international companies do not have marketing authorization application in the decentralized/
their own subsidiary in the country or do not have translation mutual recognition procedure.
capabilities, and therefore, a local contact is required. The In some cases, it is more practical that the regulatory affairs
outsourced translation procedure also helps reduce the work- expert from the CRO works inside the company. One fourth of
load in the company because CRO experts are used to trans- the companies have used this kind of service. The expert in-
late the medicinal product information texts. This reduces the side the company has to have a wide experience to adopt the
time spent on translation. company’s standard operation procedures in order to handle

Fig. 2 Regulatory affairs tasks Translaons of the SmPC, PL and labelling to

that have been outsourced in the naonal language
responding companies (% of the Readability tesng of PL
respondents)
Regulatory maintenance of the markeng
authorisaons
A specialist to work inside the company
New markeng authorisaon applicaon in
DCP/MRP
Contact person to the local authories

Preparing eCTD

0 10 20 30 40 50 60 70 80
 J Pharm Innov

the outsourced work. This work may also contain duties that useful to repeat this survey regularly to see what are the chro-
are not related to regulatory affairs but, e.g., to nological tendencies within the outsourcing.
pharmacovigilance and marketing. Generally, and based on this study, CROs have to be con-
Other mentioned outsourced tasks consisted of harmoniza- scious that the quality control of regulatory affairs tasks has to
tion of module 3 of the Common Technical Document (CTD be in order to ensure the quality, safety, and efficient use of
structure), catalogue updates, especially in Nordic countries, medicines and also to keep the customers satisfied. A compet-
and preparation of clinical trial applications. itive CRO with quality control points and standard operation
procedure can gain a competitive edge over other CROs.
CROs have to be in the forefront when regulatory affairs
The Future of Outsourcing Regulatory Affairs Tasks
topics are discussed in order to achieve the expertise required.
Before the CRO places their regulatory affairs expert in the
The outsourcing of the regulatory affairs tasks will continue as
company, the expert has to be trained by the CRO to handle
84 % of the respondents said that they will outsource in the
the various predefined regulatory affairs tasks. Open-ended
future. The services to be outsourced will be the same kind as
questions revealed that there are Bindividual differences be-
mentioned earlier, but the regulatory maintenance for the
tween the hired employees.^ One comment suggested that the
products and new market authorization applications are also
experts should have knowledge Bfrom translations to FDA
planned to be outsourced more than previously. According to
specialist knowledge.^ It seems that CRO experience is de-
the open-ended questions, two of the companies have not
pendent on individual experience rather than the CRO per se.
planned the outsourcing of the regulatory affairs tasks at any
The clear scheme for training the personnel to perform possi-
point but did respond that Bin case of heavy workload
ble tasks inside the company ensures that CRO provides good
outsourcing could be used.^ Seven of the companies replied
quality even if the employee has to be replaced during the
that they have already outsourced regulatory affairs tasks to a
agreement period.
CRO and will continue to outsource similar tasks as previous-
The translation of texts also requires standard operation
ly. The outsourcing of readability testing for PLs was also
procedures from the CRO on the quality control of the trans-
mentioned by two companies. According to the responses,
lations. CROs might have their own translators, or they have a
62 % found that there are enough CROs to which regulatory
network for the translation procedure for different languages.
affairs tasks can be outsourced.
The CRO has to have a strong and long-term expertise to
perform the readability tests for PLs. Strong expertise is need-
ed according to the study of Maat et al., which found that the
Discussion leaflets were not user-friendly and contained problems related
to finding relevant information [10]. The CRO is in a key role
This survey was successful in giving a cross section of in proposing possible changes to the PLs.
outsourcing regulatory affairs in the EU even though the sur- The CRO has to be aware of the tight timelines for the
vey respondents were mainly from the Nordic countries. In the tasks. The company often informs the CRO of the work tasks
concerned countries, companies need local contacts especially very close to the deadline. This is due the fact that the final
for translations. The tendency of outsourcing regulatory af- decision dates informed by the authorities are not known or
fairs seems to continue, but there are some references also that the authorities can make changes for instance to the prod-
from backsourcing tasks to companies. According to this sur- uct information texts before the final decision. The responsi-
vey, the pharmaceutical companies will outsource full-service bilities should be clearly defined when preparing the agree-
submissions, i.e., post-marketing activities such as preparation ment between the company and the CRO. The timelines for
and compilation of the variation applications, PSURs, annual the various tasks should also be specified to avoid the discrep-
reports, and renewals. The companies will focus on core func- ancies between the expectations and realizations of the work
tions and new marketing authorization procedures internally tasks. This is very crucial, for instance, when there is an agree-
and coordinate these processes by themselves. The selection ment for the translation procedures of the product information
of the CRO is based on recommendation or the fact that the texts.
CRO is well known in the pharmaceutical industry. If the Referring to companies strategic decisions to outsource, it
company does not have any collaboration with CROs or rec- is essential that all sourcing decisions support the organiza-
ommendations, they will search for information on the tion’s overall business strategy and are revised accordingly as
Internet. In some cases, the headquarters of the international competitive conditions change [16]. According to the re-
pharmaceutical companies evaluate the CROs and also choose sponses, it is essential that the personnel is informed and up-
the local CROs. If the selection is done at local subsidiary dated of the company’s outsourcing strategy. Based on this
level, personal contacts from common professional history study, the outsourcing decisions or the strategic decisions
or the company’s own CRO network are used. It could be were not clearly informed to company’s personnel. If the
J Pharm Innov

company’s management does not have enough knowledge moral responsibility is assigned in CROs. In some cases, there
about the requirements and time-consuming tasks of regulato- appears to be a clear disconnection between CROs and their
ry affairs, the company has problems taking care of the regu- clients when it comes to who should take responsibility when
latory affairs tasks without transferring these extra tasks to a a failure is detected.
third party. This might also reflect the relationships at a prac-
tical level when the company and the CRO personnel discuss
Conflict of Interest The authors declare that they have no conflict of
the outsourcing of the tasks. This might lead to a rapid turn-
interest.
over of the company’s or CRO’s skilled employees to seek for
jobs in companies where communication and strategies are
more clear. The employees have to be treated respectfully,
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