Maximizing Outsourcing Benefits for Virtual Pharma Companies

Post Date: October 19, 2023
Written By: Tedor Pharma Services

Virtual pharma companies (VPCs) account for a growing percentage of the pharmaceutical market. With few internal resources and limited knowledge and expertise regarding regulatory expectations across drug development and commercialization activities, VPCs rely heavily on outsourcing partners. To maximize the benefits of outsourcing, however, they must choose the right partners.  Tedor Pharma Services does not view our clients as just numbers – they are valued partners. Tedor Pharma Services has the flexibility, responsiveness, transparency, and appropriate organizational fit, combined with extensive knowledge and experience in oral solid dosage (OSD) formulation and manufacturing to support programs from Phase II clinical through commercial stages and help VPCs decrease their time to market with highly differentiated products.

The Rise of Virtual Pharmaceutical Companies

The biopharma industry has been experiencing significant transformation in recent years, including the rising contribution of virtual drug companies to the growth of the sector. This trend has been underway and accelerating for more than a decade.

A significant fraction of VPCs were founded by experts that left large international firms due to downsizing or because they wanted to strike out on their own. They often have ideas on how to leverage known molecules — either via new delivery mechanisms or new dosage forms or in new application areas. Others come from academia and seek to commercialize novel technologies, including new molecule types with new mechanisms of action. Both have minimal overhead. The former has highly experienced leadership and the latter has unique and differentiating technologies. In both cases, these small, emerging firms are attracting investment dollars from private equity and big pharma alike.1

Many VPCs are focused on early-stage drug discovery and seeking help to rapidly take their ideas from concept to clinic and ultimately marketing approval.2 The key to their success is the establishment of a clear outsourcing strategy and partnerships with reliable, high-performing third-party providers for all non-core activities. If executed properly, development costs and times can potentially be reduced by 25% and 50%, respectively.3

Biopharma Outsourcing Trends

According to BioPlan Associates, the value of the global biopharma outsourcing market was $14 billion in 2022 and expanding at a healthy rate.4 Growth is being driven by a combination of factors. Top on the list is the need to increase efficiency and productivity, reduce cost, and gain access to specialized, advanced technologies. The increasing number of small and virtual companies is also a driver, as these firms need support for both development and manufacturing activities.

Companies of all sizes are focusing on core competencies and turning to outsourcing partners as a means for optimizing resources.5 At the same time, they are potentially benefiting from additional regulatory support, gaining access to new markets, and expanding capacity while reducing risk. To maximize their outsourcing activities, many are shifting from tactical to strategic outsourcing, forming long-term relationships that contribute to better communication and transparency and help increase the security of supply.6 Such strategic partnerships can further improve efficiency and productivity and reduce development timelines owing to strong integration between the contract service provider and its customers, particularly for contract development and manufacturing organizations (CDMOs) that offer end-to-end services from development through commercial production.7

Advantages of Pharma Outsourcing

Outsourcing has several benefits beyond the reduction of costs and timelines and access to specialized technologies. The use of top-level CDMOs with state-of-the-art equipment and emerging technologies allows drug companies to bring their processes up to date.8 Often, working with multifunctional teams at contract service providers also improves similar collaboration within sponsor firms.9 CDMOs that have pursued digital transformations can also help simplify regulatory compliance and quality management, among other activities.

The use of CDMOs and contract research organizations (CROs) also provides access to greater capacity and enables expansion into new geographies without the need for upfront investment in facilities and equipment.9 Furthermore, outsourcing to multiple partners can significantly reduce risk and help ensure security of supply.

To maximize the advantages of biopharma outsourcing, it is essential to select the right service providers. Typically, options include larger CDMOs that offer a comprehensive suite of services supporting early-phase development through commercial production or smaller CDMOs that tend to specialize, either in a technology or development phase.

Service providers should have a demonstrated record of success with respect to on-time, in-full delivery, as well as a long history of achieving high quality and regulatory compliance.10 Open and transparent communication; flexibility in contract agreements, capacity (small to large volumes); technologies; appropriate expertise; and a similar working culture are also very important.

Benefits of Full-Service CDMOs

For virtual and emerging biopharma companies, a simplified outsourcing strategy can be very beneficial. One approach is to work with CDMOs that offer integrated services from early-stage development, including an understanding of the Investigational New Drug (IND) application process, through both early- and late-stage clinical material manufacturing and on to filing of New Drug Applications (NDAs) and/or Biologic License Applications (BLAs) and ultimately commercial production.

This strategy eliminates the need to manage multiple outsourcing partners and supply chains. It also eliminates the need for technology transfer from one CDMO to another, reducing timelines, cost, and risk. By choosing CDMOs that provide detailed and accurate quotes, clearly value each and every customer, and have open lines of communication combined with flexibility, stability, technical expertise, and a commitment to continued improvement and ongoing investment, these benefits can be further magnified, particularly for virtual and emerging pharma companies.

True End-to-End Support from Tedor

Tedor Pharma Services is a CDMO that can support projects from Phase II clinical stage through formulation development and regulatory submission to commercialization –– and anywhere along that path. We have extensive experience in analytical method development, formulation development, stability studies, and commercial manufacturing for oral dosage forms, including projects based on ANDA, 505(b)(2) pathways, or NDAs. For companies looking to purchase ANDAs, Tedor can also help identify potential pitfalls with those purchases. Once those clients are ready to move forward, we have the technology transfer expertise to seamlessly bring onboard relevant analytical methods and implement commercial final dosage form manufacturing processes.

With Drug Enforcement Agency (DEA) licenses, Tedor can support projects from the development stage through commercialization from Schedule II to Schedule V controlled substances.

Transparent, Detailed, and Accurate Quotes with Controlled Costs

Cost pressures for generic products have been consistently rising for many years. Profit margins have been continuously squeezed, making control of drug development and manufacturing costs essential. Often, clients developing generic products are looking for guaranteed commercial production costs from the outset, even if the timeline for development or tech transfer of a commercial process is 18 months.

Having previously been a developer and manufacturer of generic drugs, Tedor understands how critical it is for our clients to have a clear understanding of project costs and to avoid any creep in scope. We are committed to avoiding scope changes. Huge price increases in projects do not occur because of our extensive experience and knowledge about what is required by regulatory authorities. We provide extremely detailed project quotes that take into account all potential scenarios and possible regulatory compliance requirements, many of which other CDMOs will leave out in order to be more competitive, knowing that once a client is committed it is very difficult for them to switch to another provider.

We begin all projects with a discussion between our technical and quality team members and representatives from the client organization. We carefully review the aspects of the proposed project and ask numerous questions, often about issues the customer has not considered. One increasingly common challenge is the need to demonstrate that certain types of products that comply with nitrosamine impurities regulations. Elemental impurities must also be addressed for all projects. Generally, however, the questions we raise are project-specific and depend on the nature of the API, route of administration, and the ingredients use in formulation.

Ideal Outsourcing Partner for VPCs

Tedor is a small, cutting-edge CDMO with 20 years of experience helping clients meet their OSD manufacturing needs in a very personalized manner. Knowledge, capability, and caring comprise the fundamental pillars of our company. Our leadership team possesses critical information and a unique perspective, facilitating the development of differentiated products and the rapid resolution of development and manufacturing challenges.

Our goal at Tedor is to help clients achieve their goals by serving as an extension of their business. Indeed, we offer a unique set of capabilities and knowledge around the redesign of drug product formulations across all development cycles. Clients also benefit from our transparent quoting process and experience with generics and controlled substances.

Tedor has capabilities well-suited to meeting the needs of VPCs across the Phase II clinical to commercialization spectrum. We have agility and flexibility combined with deep industry knowledge and the perfect organizational fit. As a smaller CDMO offering one-stop-shop services, we provide a level of access and responsiveness that larger CDMOs with end-to-end service portfolios cannot achieve.

In summary, Tedor Pharma Services does not view our clients as just numbers –– they are valued partners. We work diligently to understand the specific needs of each of our customers and provide tailored solutions designed to ensure their success.


  1. Virtual Pharma Companies: The Future is Now.Drug Development & Delivery. Accessed 8 Aug. 2023.
  2. Cliffe, Rachel. “Virtual pharmaceutical companies: Effective communication in a dynamic information network.” Torx Software Blog. 27 Jan. 2021.
  3. Naylor, Stephen and Kirkwood A. Pritchard, Jr. “The Reality of Virtual Pharmaceutical Companies.” Drug Discovery World. 6 Aug. 2019.
  4. Khanna, Smita. “2022 Outsourcing Trends In Biopharmaceutical Manufacturing.” Outsourced Pharma. 15 Jun. 2022.
  5. Chaudhary, Kshitij. “Pharmaceutical outsourcing trends and key drivers: How can pharma companies strategically engage global outsourcing?” Current Trends in Biopharma. 28 Mar. 2023.
  6. Trends in Outsourcing for Pharmaceuticals.” Zenvision Pharma. 1 May 2023.
  7. Krämer, An evolution in pharma outsourcing.” Chemistry World. 29 Sep. 2022.
  8. New outsourcing trends take shape across the pharma industry.” PharmaLex. 7 Nov. 2022.
  9. Jain, Avijeet. “Why are Pharma Companies Outsourcing Production?” Innovare Academics Blog. 30 Aug. 2022.
  10. The Future of Outsourcing: CPhI Report Predicts a Shift in Outsourcing Strategies.” CHEManager. 19 Oct. 2022.