Lift-Out Deals in Pharmaceutical R&D

Global competitiveness is becoming increasingly important to the pharmaceutical industry. Pharmaceutical companies are exploring options to enhance the efficiency of the resources they are using at all stages of the value chain, from discovery research to production and logistics as well as sales and marketing. If we could classify the services in pharmaceutical R&D into two categories, namely: 1. Services contributing significantly towards the competitive advantage. (Core Services) 2. Services having comparatively lesser contribution towards the competitive advantage. (Non -core Services). In order to bring out cost cuttings, pharmaceutical buyers can either completely outsource the service or lift-out the non-core service. Outsourcing transactions can follow two different models: a ?lift-out? model or a ?migration? model. The latter involves the migration of in-scope functions over time to the vendor?s employees and platforms. A lift-out involves the acquisition by the vendor of some (or all) of the client?s operational infrastructure, including (possibly) the transfer of physical assets (e.g., systems and premises), employees and/or the assumption of supplier contracts and other liabilities. This white paper focuses on classifying various services into non-core and core categories. It will also identifying the various services that can be spun-off with. Case studies would explain the various merits that can be accrued by lifting-out the non-core assets.