Pundits and analysts may put up reasons behind outsourcing but mostly it seems like the drive behind offshoring and outsourcing at big pharma majors is purely financial. As industry consolidations are becoming a trend, the flourishing pharmaceutical companies are reaping most yields out of these. With size obviously come natural and structural complexities in the business operations for merging entities. The simplest role of manufacturing becomes held up in a slew of legal and technical issues.
A value chain analysis will reveal that the major public companies get the best of return on investment when they spend in research and development of new products, product marketing and customer-focused logistic and supply chain improvements. On the other hand, brick and mortar manufacturing units have poor return on investment and they deliberately choosing to cut on head count, go slow on assets and focus on upper management
Read: Pharmaceutical R&D Outsourcing Strategies: An Analysis of Market Drivers and Resistors to 2010
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