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Exploring Outsourcing—Challenges and Opportunities

By: Marie Alice Dibon, PharmD
Posted: June 5, 2009, from the June 2009 issue of GCI Magazine.

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Even when you find an outsourced partner that is good at a number of things, it is essential to know and work with other partners in order to get the best everyone has to offer. It is also important to be organized so as to let all involved function at their best and waste as little as possible.

Life sciences, and most particularly the field of biomedical research, are among the most interesting when it comes to new technologies and ingredients applicable and outsourcable for the creation of beauty products. Understanding both the market demands/desires and the ability to manufacture using these technologies and ingredients is essential in creating new beauty products. In addition, understanding the needs of the industry in which you are sourcing—in this case, life sciences—and those of the industry you are sourcing for, makes the work easier and more efficient. Both industries are similar in a many ways, which makes them a natural fit for each other. However, there are also several things that differentiate them and need to be kept in mind when transferring technologies.

Research teams in academia fields such as life sciences are often aware that there may be applications for their technologies in cosmetics, even though they often do not know how to approach and navigate that field. And for some technologies, you really have to have worked in cosmetics to understand the applications of a given technology. Many biotech companies are not aware of the potential for development in consumer products, or, operating in a heavily funded industry, depend on boards that are wary of doing business with consumer-related industries for various reasons.

Challenges to Technology Transfer

In biotech and pharma, a lot of money is spent upfront in forging development and manufacturing deals. Money is also spent developing products further. This isn’t really the way the beauty industry functions. Both sides have to understand that they need to meet halfway. Beauty companies need to see the value of a very unique and advanced technology, with often times quantifiable results and very real clinical data. Paying to help develop this and eventually owning part of it is a perfectly fair deal. Biotech and pharma have to understand that when it comes to actual profits—not the money spent developing the product—there is little financial realization until products are actually sold to consumers, with profits shared either as royalties or built in the price of the product. They also need to realize the profits are not going to that of a pharmaceutical product.

One way for them to accept this is demonstrating how much easier the process of bringing beauty products to shelf is than trying to get a new drug application approved. Now, the real question is: Are there enough innovations in biomedical research for cosmetics to benefit? From the evidence, more than the industry can actually handle and bring to market.

However, one has to find the real opportunities. Some of them are well hidden, even from their own inventors. Many are not aware of the potential in cosmetic and skin care applications. There are tools for research, tools to help industrial processes, active raw materials, polymers, innovative materials, nanotechnologies out there that people do not see as having potential applications in cosmetics when, in fact, they do.

Once they are found, there have to be people who understand that potential, and who are willing to spend time and some money to acquire them. Additional efforts on an already heavily burdened industry? You bet.

A useful edge in a market where more than ever you have to fight for every consumer, every market share? Undeniably.