Tuesday, May 10, 2011

Outsourcing: The good, the bad and the ugly

I think it's the bottom one that wants to
send your job to Bangalore.
Photo credit: AJC1
Susan Ainsworth's article in today's C&EN on chemistry outsourcing managers is worth a read. She talks to a lot of knowledgeable people about the process and sheds some light on a relatively mysterious topic.

The Good: There is some small room for knowledgeable, experienced chemists to do some good:
Although the client asked the CRO to follow a synthetic route outlined in the literature, Levy explains, “the contract organization took the liberty of modifying the chemistry to increase the efficiency of the synthesis by minimizing the number of steps and, in the process, ended up reversing where substituents were attached to the structural core.” The CRO made a molecule with exactly the same molecular weight as the desired product and a similar nuclear magnetic resonance spectrum. “That’s the kind of problem that an outsourcing manager without a strong chemistry background will miss,” he warns.
The bad: Sometimes, the things they have to be aware of is just a little basic:
Crystal-clear communication is especially critical when someone “is 12 time zones away,” Kimball says. “When you are in the lab next door, you can walk in and talk to people, and you can touch and feel the process and better understand why a reaction doesn’t work, but when that work is being done remotely, it is much more difficult. Many of the assumptions that we make, having been trained in the U.S., may not be valid. The quality of reagents, laboratory conditions, and the care with which reactions are carried out may not be the same.” 
Kimball recalls an instance when a straightforward Friedel-Crafts acylation reaction following a literature procedure failed repeatedly as it was being carried out by a CRO partner. “Finally, it was determined that the high humidity in the lab and poor storage conditions of the aluminum chloride reagent were at fault. Once those were corrected, the chemistry worked as planned.”
Aaaand the ugly: I'm glad that Kerry Spear (of Sunovion Pharmaceuticals) was willing to be fairly upfront about his thoughts on synthetic chemistry. This is a set of statements that every 1st year graduate student that contemplates a career in synthetic chemistry should think about:
When orchestrating a corporate outsourcing effort, leaders must have a clear understanding of the company’s strategic outsourcing goals and how the drivers—quality, speed, and cost—impact those goals, Spear says. They also need “to recognize what chemistry is best to keep in-house and what could be outsourced,” he adds. For example, “all the things a classical medicinal chemist does we consider core, at least for now, which means we keep them in-house,” he says. “However, we consider synthetic chemistry to be very outsourceable. Frankly, we don’t do any of it in-house anymore.”
I don't really know what do say about that; I mean, sure, I don't make my own TBSCl -- I outsource it to Aldrich (Oakwood, actually, if I have anything to say about it.) But I'd be really interested to hear what Dr. Spear considers 'core' and 'not core'. I'll tell you what -- the 'core' part was probably gotten smaller over the past ten years, as opposed to getting bigger.


  1. In the past 10 years, the 'core' part has gone completely sad-core. And elves like Dr. Spear will always lead us in any economic environment because they are not weighted down by any technical knowledge. The stand tall and tanned, their hands are manicured and they make their utterances in the beautiful language of managementspeak.

  2. Unstable IsotopeMay 10, 2011 at 11:32 AM

    This sounds bad to me because these labs will eventually figure out how to do the more advanced chemistry. I guess the question is how fast.

  3. I'm trying to figure out what specifically he's talking about in terms of the synthetic angle. Is it that he has a bunch of medicinal chemistry 'thinkers' on site and the 'doers' someplace else making the compounds?

    This does seem to be the trend...

  4. #3 that is the way I read it. I find it strange, because I always seem to do my best thinking on my feet in the lab drawing on the fume hood sash, talking with colleagues informally etc.

    Keeping fresh in the lab also teaches you what works well and what doesn't - which isn't at all obvious if you rely on literature yields and procedures to inform you!

  5. @10:31 Same here. I also tend to get interesting ideas from things that don't quite work they way they were supposed to, namely interesting side-products. Doubtful those compounds are even being isolated by companies that are being paid per compound or by milestones.

    It's why the notion of being more productive by outsourcing the 'hands' makes no sense to me. Then again, it's my job that's going to be outsourced, so I'm somewhat biased...

  6. Unstable IsotopeMay 10, 2011 at 3:10 PM

    Having "thinkers" in one place and "doers" in another place sounds like the most inefficient way to do research that I can imagine. I assume this model can only (kinda) work because the "doers" are cheap. Once their wages start to rise this doesn't sound as attractive.

  7. I'll take a shot at the interpretation of that comment: the classical "core" medicinal chemistry is the making of the final targets for testing. These take advantage of the combined learning of the 'in-house' chemists and that has not been out-sourced (yet). The 'synthetic chemistry' that is being out-sourced is the making of advanced intermediates (in quantity) and those intermediates that may take several steps to obtain. This work is very out-sourceable (and is) and probably should be. Seems pretty reasonable - outsourcing the 'hands' and keeping not just the 'thinkers' but the 'finishers' in-house.

  8. @10:31, @YourePfizered: Can I second (or possibly third) that? How many times have I sat in meetings, where my (business-oriented) bosses say "Well, there's lit precedent for this, why doesn't it work?"...that's when they pull out the 1987 Synlett that the entire project is based on!

    @Anon1:42 - I'm the "hands" at a CRO. I'll let you in on a secret - chemistry never works the same way in two different labs with different chemicals. Ever. Thus, sometimes the "hands" need to be just as sharp as the "thinkers" off-site to re-hash routes or correct problems.

    The amount of chemistry that can be done in giant multi-gallon steel reactors by "hands" opening and shutting valves at various times is a small portion of the outsourcing industry...so "thinkers with hands" are the best fit for the outsourced medchem landscape.

  9. @See Arr Oh...

    When did I say that reactions work the same? The point I'm making is the 'hands' can be out-sourced easily (in fact everyone can be out-sourced easily) - but to keep with the person's (potential) thought process - it's better to have the 'thinkers (as you call them)' I call them 'finishers' on-site. Those that actually make meaningful compounds to test the hypothesis. The 'scaffold' does not test the hypothesis, finished compounds do.

    Since you claim to be the 'hands' are you are stating that you are not as sharp because you're off-site? If you are a 'thinker with hands' then that proves my point that it can be out-sourced.

  10. See Arr Oh? I am not quite sure about your last point but let me know when you have any openings.

    Also, the most common reason why outsourced procedures do not work well on scale is that many of these procedures were an unreliable crap to begin with, and someone had solved his chemistry problem by making it your problem.

  11. @milkshake: True dat.

    @Anon3:07: You do have another good point - Anyone CAN be outsourced....(yikes!). Sorry to have misunderstood your previous point.

  12. Anyone can be outsourced, but it's not always a good idea; even if it's good now, sometimes what's good in the short run will end in tears (eating the seed corn, etc.). Not all destruction is creative.

    Why isn't there manufacturing R+D? Well, if you have no one doing the grunt work, all of the things that people learn from practice and can use when it's time to improve the process aren't known, except by the people in wherever we sent the jobs to. Why does management think that chemistry will be any different, and that the ability to conduct effective research will continue in the absence of people to implement that research?

    In addition, why do they think that their hands will remain hands and not become competitors? It's not like there won't be plenty of MBAs and managers from China and India that can do as well as current management, and if they have no drugs and little trust (from government or the public), then they have no brand name advantage to hold out competitors. This doesn't sound like something that ends well for anyone but the last round of departing Ponzi scheme investors.

    If we knew everything about anything, we wouldn't need research, or people. Drug development shows no signs of being predictable, and investing as if it did seems pretty dumb.

  13. you're talking long term. stop it, that's so out of fashion.

  14. This Spears guy is a meatball. Its Jackasses like him who are ruining this country and destroying our middle class. We are essentially handing over our technological abilities to Chindia. Eventually, they will compete with us. Meanwhile, we will have gutted our science in this country. This is why our country is going down the toilet. This traitor is a disgrace.

  15. Unfortunately, alot of companies are starting to follow this formula. They have designers here and the chemists who do the chemistry in China or India. From my experience, this works very badly. At our company, we were getting compounds in this dead scaffold 3 months after we knew that the scaffold was dead. This was because the chemists in China were paid by the compound. After looking at Sunovion's website and their pipeline, it apparantly is not working for these guys either.

  16. The decline and stagnation of chemistry jobs can be attibuted to outsourcing. The race to the bottom (exporting jobs to low wage countries) is accelerating so there will be no recovery in this country or the chemistry job market as long as current policies remain in place. We really need government policies in place to deter outsourcing. These people responsible for outsourcing should be on trial for treason.

  17. I wonder if the Stasi took family pictures on vacation....might look like this guy.

  18. Why can't someone just be honest for a change and tell the truth about what is happening to Pharma. That is. The gravy train of the 80s and 90s created more money than the companies could spend. The result is the non-scientific MBAs have stripped the costs (the doing) out of pharma. Consequence is everything is outsourced to Chindia to keep costs down and only the overpaid managers are left. The hardworking, highly skilled scientists have been tossed into the scrap heap thanks to the likes of people like Spears. Hence gone are many R&D sites from Roche, GSK, AZ, Pfizer, etc in the UK. Simple. If these idiots want to send our jobs to Chindia, they can sell there crap there too.

    And if someone ever says we need to train more scientists again........ What is actually needed is jobs for the thousands of experienced scientists currently unemployed.

  19. The H-1B along with "offshoring" should be able to turn the USA into a 3rd world #*ithole w/i a two or three years as planned. And remember, the elite want unarmed peasants, but really they'd settle for just peasants No middle class, no competition, is what you want if you are a member of the idle ruling class.

    So where does this all end? We're getting to a Mubarak regime, where the ruling elite and their fatcat business friends steal the nation's wealth, aided by a compliant paid-off upper middle class, and the rest of the country goes to hell.


  20. The company I work for, (maybe not in the near future) has decided that they can also outsource development. First they choose a person who has practically no experience in development in charge of managing the outsourced team. Then they send analytical methods that are guarenteed to maximize quantitation of product and minimize the impurities. All of the impurity problems are being kicked down the street to the last step where all the problems are going to be solved. This is going to be very interesting.

  21. @anon 12:22pm:
    That sounds like a pretty damn good reason to quit the company.

  22. I think it could be construed as un-american to essentially take part in technology transfer to a competing country.

    The work of outsourcing science is the work of business development outside our economy. I'm sure a large pay check or a hard heart will rationalize selling out.

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