With the ever changing regulatory environment, companies are facing new challenges that need to be addressed with efficiency and cost in mind. Outsourcing has become a practice that many life sciences organizations have turned to in order to meet their regulatory challenges in a timely and cost effective manner. Although there are many benefits of outsourcing regulatory affairs activities, one must carefully account for the risks that are present while moving to an outsourced model.

With the constant efforts of regulators in harmonizing, the regulatory norms globally have contributed for the growth of outsourced regulatory expertise. Most companies, major multinational pharma companies or small, have their own specialist departments of regulatory affairs professionals - and those who don’t, they rely on the expert advice of independent regulatory service providers to meet their plethora of needs.

Outsourcing regulatory services
Significant change in govt regulations, market conditions and technology is forcing pharma, biotech companies to embrace new business models.

Understanding each country’s regulatory requirements and above all the growing regional regulation is a major challenge. It was feasible for companies to have their in-house regulatory staff when the regulatory norms were stringent for the markets like US, UK, EU, Canada, Japan and Australia but now as changing regulatory scenario, countries from Thailand to South Africa, Brazil to UAE, adopting pharma and device regulations more and more similar to the FDA, EMA is making it difficult for companies to maintain in-house regulatory staff as it is expensive commerce. Many MNCs are outsourcing their regulatory work to lessen the pressure on their in-house team or to support the same.

Companies are facing new challenge of electronic submissions. EMA has made it mandatory from July 2011, that all the applications may it be marketing authorization applications or drug safety data submission, marketing authorisation holders shall electronically submit to the agency information on all medicinal products for human use authorised or registered in the Union.

Electronic submissions have encouraged SMEs to turn to outsourcing partners more frequently to manage their product submissions. As building the infrastructure in-house will be time consuming and all the more will include the costs such as software installations, training the staff or to bring the new resources to manage that activity.

Trends in outsourcing
Outsourcing today, has become a part of new business strategy for many organizations with more and more functions that were earlier as restrained are being outsourced to the external partners. There are many reasons why companies turn to outsourcing partners such as: additional capacity, resource flexibility, cost savings, developing a new capability, process improvement and process standardization, to name a few. Given that regulatory submissions have quiet and busy periods, outsourcing offers a cost-effective and flexible way to manage the peaks and valleys without the need to retain a large in-house staff. However, outsourcing is considered as organization structure shift of the century, but many still does not buy this concept of outsourcing regulatory affair activities. The companies are finding it difficult to decide which activity to outsource and which activity to maintain in-house?

Drivers for outsourcing
Many changes have taken place over the years in regulatory scenario. A shift across regulatory environment has encouraged companies to grasp new concepts of outsourcing. In today’s fast changing regulatory milieu companies are supporting the outsourcing of broad range of skills, activities and technologies required to meet the ever-growing demands of the regulations worldwide. There are many factors which contribute towards the growth of outsourcing opportunities. The most obvious and frequently cited is cost savings. Outsourcing especially to India and South East Asian countries offers potential cost savings. The other considered drivers for outsourcing are: flexibility, risk and security, regulatory impact, timely market approvals with lower costs, fast and less expensive process, reduce the stress or burden on their in-house team, access to knowledge and vast experience. Among all the factors cost savings contributes around 80% for companies to outsource the services to the external partner. Companies themselves are finding, by outsourcing routine functions, their in-house resources are free to focus on increasingly strategic roles such as regulatory planning for the new drug developments.

Factors to consider while outsourcing
Regulatory affair services can range from simple tasks to very complex projects involving detailed consultation with the relevant guidelines and/or concerned health agencies. The factors which play important role while selecting the partner for outsourcing are - experience, confidentiality, infrastructure, technology, resources, flexibility, effective communication, quality, cost benefit, accountability and geographical.

Successful outsourcing lies in finding the right partner who is able to understand and adapt to an organization’s needs and goals, that can perform the functions efficiently in timely manner.

Challenges in outsourcing
More and more companies are looking for the external partners to complete their quest to meet the ever increasing regulatory demands. But finding the right partners that can provide end to end support and are reliable is an apprehension for companies. Many factors contributing towards the outsourcing, among which quality remains the major concern for the companies. They want cost effective solutions but at the same time do not want to compromise on quality.  

As major outsourcing activities are managed offshore across the globe, companies are worried about the accountability and timely achieving the targets in cost effective manner. Managing relationships with number of partners involved in a project is trepidation.

Benefits, pitfalls of outsourcing
Despite outsourcing has many benefits, several enduring concerns remains. Data protection and confidentiality is high on the list of concerns as, companies share lot of confidential data with external partners through secure way.

Companies are worried about the business continuity plans and disaster recovery. Companies are also worried about if the selected partner is reliable enough to handle the critical tasks for them.

Although companies are incurring cost savings through outsourcing but companies are worried how far these savings are sustainable over period of time as the job market strategies are changing across the world.

The future for regulatory outsourcing is bright although it is an expensive affair. Life sciences organizations have a lot to gain through good partnerships, but hasty and impulsive collaborations potentially could cost organizations more than they save.

Models available for outsourcing regulatory affairs activities
Functional outsourcing of regulatory affairs is currently done by many companies and it is growing. For small or growing companies it is a method to bring extensive regulatory expertise into an organization in a cost effective manner. Companies are looking for cost effective solutions thus prefer outsourcing to low cost developing countries where the resources are available at much lower costs and can provide the companies with in-depth regulatory expertise at limited costs.  

There are different approaches companies are following across the globe to improve their processes, client organizations are no more stuck within their conventional wisdom of organizational resources. Outsourcing regulatory affairs is one approach that can save time and money, leaving company’s resources to concentrate on their core areas of drug developments. The different models followed for outsourcing regulatory affairs services are:

Staff augmentation:To expand current capacity to meet short term immediate business needs.
 
Project based outsourcing: This is a task oriented activity outsourcing and limited to the task.

Full service submission outsourcing:  This is suitable for post marketing activities like variations, PSURs, annual reports and renewals

The combination of factors makes the outsourcing an ideal option for the companies to seize opportunities to reduce the costs, but still this concept leave many companies with a question on to decide what to outsource and what to retain in-house.

Conclusion
With the remarkable change in regulations in the pharma, medical devices and biopharma industry, outsourcing is no more limited to basic functions. Companies are willing to outsource more complex functions to the external partners to reduce their burdens during peak hours. The outsourcing concept is not limited to tactical any more it is becoming more and more strategic.