Why should companies outsource their research to Contract Research Organizations (CROs)?

Practical needs are met by contract research organisations – CRO with advantages in terms of time, cost, flexibility…

1. Introduction

Currently, the Vietnamese pharmaceutical industry has more than 220 pharmaceutical manufacturing companies and 50,000 drug distribution companies. In the role of new product development, the manufacturing company has its own research team to be proactive, but the number of new projects may be greater than current resources.

On the other hand, a number of distributors (processors) want to develop new exclusive products, so they outsource research and development to manufacturers. However, the resources of research teams are often allocated first to the product development needs of the manufacturing company itself and then to the outsourcing company, not to mention that each manufacturing company also has many different outsourcing partners.

In the manufacturing sector, manufacturing companies have a good grasp of technology, which often gives them an advantage in setting product prices.  Therefore, choosing a contract research organisation (CRO) can be a good solution to meet the goal of rapid product development for both manufacturing and outsourcing companies. 

2. The Benefits of Implementing CRO for New Product Research 

• Concentration

With the sole aim of ensuring the quality and quantity of new research projects, CRO partners devote maximum resources to their clients’ product development needs.

In practice, some outsourcing companies that place new research orders with manufacturing companies may receive little (or no) regular updates on project progress and may not be prioritised in the research list.

=> This is a huge difference from choosing CRO partners – who are ready and always dedicate maximum resources to customer needs 

• In-dept knowledge 

CRO units often gather teams of experienced specialists from multinational corporations or large companies. They are well-trained, have in-depth knowledge and experience in the field of product research and development.

When choosing to work with CROs, clients are assured of optimal design for their desired product. Customers do not have to pay too much for technical knowledge (formulations, excipients, processes…) as well as for the rules of law, regulations and current guidelines.

CRO is always ready to find and implement optimal solutions for new projects, especially for implementing highly difficult products that require a lot of time and effort. For factories in provinces far from big cities, attracting highly qualified R&D personnel is extremely difficult.

=> Cooperating with CRO units will help ensure competitiveness and improve product quality. 

• Cost effective

– Firstly: Manufacturing companies that need to research a large number of projects can invest in expanding their personnel, equipment (research and testing) and management systems. However, not every company has the potential and willingness to implement this solution, especially in a certain short-term period.

   => Choosing a CRO partner to conduct research and transfer products allows companies to save on related investment costs while still ensuring the desired quality and requirements. 

– More importantly: CRO units are ready to research and develop optimal formulas and production processes for products to bring the most competitive prices to their customers.

In reality, processors often negotiate mainly the selling price of finished products with manufacturers, but pay little attention to the structure of production costs in the factory (raw materials, excipients, equipment, batch size, process, etc.) and analyse which costs can be optimised to increase profits.

   Not all manufacturing enterprises are willing and qualified to optimize costs to both bring cost benefits and ensure product quality for processing units.

– This is especially meaningful in the context of: Companies are competing fiercely under current bidding regulations. According to the Circular 06/2023/TT-BYT on Pharmaceutical Bidding Regulations, only a group of approximately 15% of manufacturing companies that comply with EU GMP (or equivalent) can participate in Bidding Groups 1 and 2, while the remaining nearly 85% of manufacturing companies compete in Bidding Groups 3 and 4..

  => This is a highlight that independent CRO units can do for their clients. 

• Completion speed

With a dedicated team of experienced professionals focused solely on research, CRO units are able to propose specific and quick project implementation plans and continuously update project progress during implementation.

In fact, some outsourcing companies have responded to the slow pace of research, especially for complex projects (unstable products, products requiring complex techniques when studying bioequivalence or when implementing production, registration, etc.). There are many projects assigned to manufacturing companies but have to stop due to poor product quality, affecting customers’ plans.

In today’s highly competitive environment for drug approvals, if companies can complete research and submit new product applications as quickly as possible, they will have a better chance of developing the market, which will help to quickly recoup investment costs and increase profits. 

• Flexibility 

Based on the actual needs of customers, CRO units can flexibly provide different solutions to carry out customers’ new research projects.

The CRO unit can currently implement the entire (or part) of the project: starting from the initial stage of feasibility study to the stage of submitting registration dossier and responding to comments from drug regulatory agencies.

CRO is ready to support customers at any stage and is ready to transfer to any factory that customers request. 

4. Conclusion

Cooperating with CRO units in the product research and development process is an effective solution for manufacturing and distribution companies thanks to the advantages analyzed in the article.

The Covid-19 pandemic also demonstrated the superiority of independent research centres over the R&D departments of pharmaceutical companies in terms of speed of research. Collaboration with CRO units to complete research projects is an inevitable trend in the world, but still quite new in Vietnam.

=> Manufacturing and processing companies in Vietnam need to evaluate the potential of working with CROs and select reputable CRO partners to accelerate the speed & quality of product research.