Few years ago pharmaceutical majors like Merck and Pfizer have made it clear that they would developing drugs in their own laboratories. The sector was highly profitable and was considered as an ideal example for vertically integrated business.
But things have changed over the years. The cumulatively rising costs of developing new drugs has made its presence felt and bigger drug makers are now trying to find ways to slash expenditure and aiming a bigger bucks for their R&D dollars. In the process they are handing out more and more responsibility to independent companies, niche drug manufacturers. 
May be the scope of pharmaceutical outsourcing wont be as big as shoe or apparel industries, but its clear that major firms are chalking new ways out to reduce the costs of capital and labor by hiring others to do an increasing share of the manufacturing.
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