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The Outsourcing Dilemma

Executive Summary

The drug industry has accepted the need to outsource R&D--now, with sales productivity down, and the rising cost and risk of owning too much commercial infrastructure, why not outsource more of the sales effort, too? Big and small pharmas resist the idea but will eventually have to accept it--junior partners in licensing deals are insisting on roles in selling their own products, and Big Pharma must investigate cost-saving solutions.

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The recent diabetes alliance between Bristol-Myers Squibb and AstraZeneca on two late-stage clinical compounds highlights some of the different ways pharmaceutical companies are embracing both specialty products and externalization strategies to address the industry's growing pipeline problem. BMS and AZ are pursuing different approaches but in diabetes, those strategies are complementary: AZ's unabashed externalization and muscular primary care marketing suits BMS's gradual weaning off the blockbuster model.

BMS Deals Diabetes Drugs, Solidifies Specialist Stance

The recent diabetes alliance between Bristol-Myers Squibb and AstraZeneca on two late-stage clinical compounds highlights some of the different ways pharmaceutical companies are embracing both specialty products and externalization strategies to address the industry's growing pipeline problem. BMS and AZ are pursuing different approaches but in diabetes, those strategies are complementary: AZ's unabashed externalization and muscular primary care marketing suits BMS's gradual weaning off the blockbuster model.

Pharmaceutical Strategic Alliances 2006: Forcing Externalization at Big Pharma

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