Deriving and Assessing Strategic Priorities for Outsourcing Partner Selection in Pharmaceutical R&D: an Approach Using Analytic Hierarchy Process (AHP) Based on 34 Experts’ Responses From Korean Pharmaceutical Industry
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Despite an increasing proportion of activities along the pharmaceutical R&D value chain being outsourced, little attention has been devoted to examine the factors affecting the outsourcing partner selection process. This paper aims to suggest priorities of influencing factors for maximizing the efficiency in governing outsourcing arrangements.
This paper adopts the analytic hierarchy process (AHP) based on 34 experts’ responses from Korean pharmaceutical industry to rank a set of different criteria substantial for establishing a new outsourcing relationship. A total of 14 sub-criteria (encompassing a range of task-related and partner-related issues) were identified and used to construct the AHP model. Two different outsourcing scenarios were considered: (1) outsourcing of R&D activities in the early stages of drug discovery and (2) outsourcing of regulatory affairs tasks.
In case of R&D outsourcing, the criterion “Cost-saving potentials” was the most dominant factor affecting the partner selection decision followed by “Commitment” and “Partner compatibility.” In case of outsourcing regulatory affairs task, “Reputation” and “Specialized expertise” were perceived as significant selection criteria.
The study facilitates the process of assessing factors that have a major impact on the outsourcing partner selection. It further contributes to building consensus within the organization and can serve as a reference point for learning about challenges encountered in outsourcing decision. The findings can also provide lessons for other research-intensive industries that have not yet developed their outsourcing activities to the same extent.
KeywordsAHP Outsourcing Partner selection Task-related issues Partner-related issues
We would like to thank the editors and reviewers of Journal of Pharmaceutical Innovation for their insightful comments and feedback on this research.
Compliance with Ethical Standards
The authors declare that they have no conflict of interest.
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