DISRUPTING PHARMA—ONLY POLITICIANS CAN DO IT, HERE’S WHY AND HOW

Part II

OUTSOURCING BEGINS IN EARNEST

The exact sequence of events isn’t easy to pin down, but the results were unmistakable—masses of workers were shown the door and thousands of facilities went up for sale.

Ousted senior execs looking for pastures new put the dumped assets to good use. They set up small companies (dubbed biotech at the time, we will call them SDDs, small drug developers) developing drugs to either sell to Big Pharma or try to get to market themselves.

The CEOs in SDDs were making a persuasive case to be the engine house of drug discovery, citing less bureaucracy and shorter chains of command. Investors liked the sound of it and started pumping money in.

Meanwhile, other exiting senior execs joined together and bought up the facilities, funded by a different cadre of investors. These companies provided SDDs with services in exchange for a fee, under contract. These became known as contract development and manufacturing organisations (CDMOs) and contract research organisations (C…