Economics Of Outsourcing

The article on pharma outsourcing, while doing a decent job of outlining the current landscape, was framed around a misguided argument (C&EN, April 2, page 17). The article asserts that smaller companies typically outsource scale-up processes because researchers at small biotechnology companies "rarely have the skills needed to manufacture their compounds at large scale and at the standards expected by regulatory agencies."

Although scientific skill sets may sometimes come into play, the more decisive factors are facilities' limitations and economics. It is easier, faster, and more economical to contract these tasks to partners that already have the necessary physical infrastructure in place than to divert precious resources to the construction of internal facilities. Many large pharmaceutical companies are also taking advantage of the economic benefits of outsourcing large-scale production. Listing the economic factors would have been more appropriate and correct.

Charles R. Allerson
San Diego, Calif.