Why huge groups make the choice of outsourcing?

“A collective employment termination project is under study at Sanofi. According to Le Journal du Dimanche, a social and economic committee will be held in three entities of the group (Sanofi Aventis Group, R & D and industry) to address this reorganization. “We are very worried,” told the Newspaper a union source. “Already, we had been told a 30% decrease on IT budgets for 2019. Management wants to outsource anything that can be outsourced, where added value is too low.” More than 500 positions could be removed. ”

In the current vilified time, Sanofi has chosen a good time to announce this. One more reason to depress … the added value of drugs is not enough, so we outsource! Thank you for us CDMO!

grand groupe CDMO

The strategy of major pharmaceutical companies in the current climate

This is the way of thinking of the major pharmaceutical laboratories:

  • Our refund or sale prices goes down
  • Our shareholders want dividends, and more and more every year
  • Regulatory and workforce constraints are constantly increasing
  • Our short-term vision is rather pessimistic

So why this choice of outsourcing?

1/ We reduce our expenses by removing positions (see the JDD),

2/ We empty our plants (we can sell them later especially for those which do not manufacture blockbusters)

3/ We are rid of future regulatory constraints by delegating all this to our subcontractors

4/ If possible, by the way, we try as well to be rid of any responsibility for the Finished Product!

And the take is : what a great strategy !

Funny enough, a month ago, an applicant preferred a Sanofi position rather than in our teams … Did she make the right choice? Far from me to judge, but is the name fame better than the field effectiveness?

So, when I see that, I’m depressed … but not too long! -) … My analysis is a little bit different from the one of the Great bosses of these Majors : that’s normal I do not have their career, their training, nor the same quality of far-sightedness , and especially not the whole data set I must admit!

If Sanofi does not have enough added value, it comes from two main reasons … Its expenses and … its load!

The CDMO is an expert in its technology niche, flexible and able to optimize the smallest of its tools. All CDMO employees are “Swiss knives” who know how to do everything and who like the challenges that bring them out of their comfort zone! They are real assets that allow, in comparison to large groups, to limit the expenses and optimize the load … And when we divide less expenses by more load: we optimize the added value!

Should we hand-back this know-how to these Majors? I let you think about your opinion on the question … mine is already done 😉

And for those occupying positions that should be removed … do not hesitate: CDMO seek talents!