The Challenge With Outsourcing: Oversight, Accountability and Everything In Between
When companies hire a contractor to conduct work, how much ownership do the companies retain for that work? Where is the line between managing and oversight? This article offers definitions in management roles that help in reducing confusion within a contractual relationship—for those on the contracted or contracting side of the equation. The examples are taken from the world of drug development, where outsourcing is a well-established standard of work.
Drug development is an expensive and lengthy endeavor. Assessments range at around 10 years, and over $2,000 USD for developing a single marketed product. The process from drug discovery to product marketing requires many phases, and a myriad of specializations. Especially around the human clinical trial phases, the pharmaceutical and biotech industries have become reliant on extensive outsourcing of key activities.
This outsourcing strategy is historically grounded in changes that happened in the 1990s. At that time, the biotech industry emerged with ideas, funding and assets—but little hands-on experience in drug development. It thus needed specialized experts that could do the heavy lifting of managing a clinical trial.
Within those same years, pharmaceutical companies were looking to reduce costs by offshoring activities into developing countries, while expanding clinical
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