THE OUTSOURCING MODEL OF DRUG DEVELOPMENT IN THE

PHARMACEUTICAL INDUSTRY

R & D in the pharmaceutical industry is a series of research and development

processes aimed at finding new Pharmaceutical products or improving the quality of existing
products (quality includes: safety, effectiveness, acceptance). R & D is closely related to the
development of the latest science and technology so we need updates on science &
information for R & D personnel.
R & D is the spearhead of product innovation that has a very important role in product
competitiveness. Products that have high value are knowledge based products, namely
products that have advantages in the application of technology so that the product will have a
distinctiveness that is difficult for other products to imitate. While the pharmaceutical
industry itself is the most innovative and incentive sector in research with the characteristics
of large R & D spending compared to other industries. So that it can be concluded that the R
& D (Research and Development) of pharmaceutical products is very important to survive in
the competition of the pharmaceutical industry.
The tasks of the R & D Section in the pharmaceutical industry are:
1. Making new products, novel products (new moleculle entities and modified
compounds)
2. Developing existing products (me too product), which include:
- repair of dosage forms
- packaging repairs
- repair of doses
- formula improvements
3. Supervise the scale-up process
4. Registering products with regulators (BPOM, European Drug Regulator, FDA, etc.)
5. Make a formulation of the analysis method, which will be used as a fixed procedure
for analyzing the products made.

Research and development of new drug molecules takes approximately 12 years. The
discovery of new drugs can come from nature or synthesized drugs. From the search for the
drug molecule, it is taken the potential according to the expected therapeutic goals. Then
various kinds of pharmacology and toxicology tests were carried out to ensure the
effectiveness and safety of the drug.
 The first test carried out was a pre-clinical test, namely testing in the laboratory using
test animals. Of the thousands of candidates for the drug there are around 250 candidates
taken pre-clinical trials. This pre-clinical test is focused on toxicity, bioavailability and
efficacy tests.
After the pre-clinical test followed by clinical trials on test subjects on humans. Clinical trials
consist of 4 phases (phases I, II, III, and IV) which require considerable time and cost.
The Indonesian domestic pharmaceutical industry is mainly engaged in the production
and marketing of branded generics, generic drugs and licensed drugs from overseas
pharmaceutical companies. Indonesia's domestic pharmaceutical industry is a formulation
industry, not a research-based company. Therefore the R & D activities carried out are very
limited with financing support averaging under 2% of total sales. The research conducted is
limited to product formulations, not the development of new raw materials. Looking ahead,
the implication is that Indonesian domestic pharmaceutical companies will never compete in
the market segment of patent drugs / innovative drugs.
The R & D of the Indonesian pharmaceutical industry is not feasible to be directed at
the discovery of New Chemical Entity (NCE) drugs. The main obstacle is the amount of
research costs that can reach more than US $ 300 million for each NCE. The R & D of the
Indonesian pharmaceutical industry can be directed primarily to the development of new
delivery systems (NDS) and herbal medicine research. The NDS very likely to be developed
is sustain released for certain drugs.
The development of herbal medicine in the direction of fitopharmaca (complete
clinical trials) has very good prospects. For example Curcuma xanthoriza extract (extract of
buffalo) which has been separated by essential oils (essential oil) based on research
conducted by UGM turned out to reduce cholesterol LDL in humans by 26% with the use for
one month. This benefit can be compared with Lipitor, which is produced by Pfizer, which
has global sales of US $ 7 billion per year.
Likewise “meniran” extract (Phylantus ninuri) based on the results of clinical trials
that have been carried out proved to be efficacious to improve the immune system. As
fitofarmaka, this herbal medicine has been marketed with a considerable sales value. The
main problem with this herbal medicine is the standardization that must start from the time of
cultivation, harvesting and the entire chain of production. Cultivation standardization is
needed to manage so that the active ingredient of medicinal plants is relatively constant.
 The pharmaceutical R & D industry does not have to be done alone by a
pharmaceutical company. Pharmaceutical companies can make alliances and collaborations
with research institutions at universities / universities. Korean Green Cross - a biological
product company (vaccine) Korea is developing rapidly because of its R & D collaboration
with universities. Similarly, Peking University conducted a strategic alliance with
pharmaceutical companies to establish biotechological pharmaceutical manufacturers that
operate commercially. Aventis manages a complex portal (web) alliance with 300 universities
and biotech companies. In companies like this, management of alliances becomes a key
competency.
Raw materials are still imported. More than 90% of the raw material for Indonesian
medicine is imported mainly from China, India and some European countries. For Indonesia,
it is not easy to develop a drug raw material industry because the basic chemical industry in
Indonesia has not developed.
While the types of medicinal raw materials needed by the Indonesian pharmaceutical
industry are more than 1,300 items with relatively small quantities. Most of the raw material
items are very economical to produce only to meet the Indonesian market. While China and
India are able to export to world markets at relatively cheap prices. In Asia, only 4 countries
have the ability to produce medicinal raw materials with large export marketing, namely
China, India, Japan and South Korea.
Product research and development section in the pharmaceutical industry is a
department or division in charge of conducting research on the search for new drugs / new
drug ingredients, developing drug formulas, packaging development, as well as modifying
other technical aspects and managing registration / distribution permits for medicinal
products etc. Background to product development as an increase continuous product quality,
cost efficiency, the need for packaging changes to attract consumers' attention, and
technological developments. This section is led by an Assistant Manager who oversees two
supervisors, namely “Spv. Development of Product Formula” and “Spv. Packaging Material
Development”.
1. Development of Product Formula
The function of the Product Formula Development section is as follows:
a. Handling alternative raw materials
includes finding resources for other suppliers to anticipate the availability of raw
materials on the market and as a cost efficiency.
 Product Development will cooperate with the Procurement section. Procurement will
contact supplier / manufacturer. The supplier / supplier will send samples for
inspection by the QC department and a production scale trial is carried out to see the
stability and quality of the material. After the inspection results are complete, just
confirm the supplier again.
b. Evaluate formulas and production processes
Every time there are changes in production including changes in excipients, an
evaluation of these changes is carried out.
c. Handling new products
The product development department prepares all needs starting from the process,
methods, technology needed in the Plant when transferring formulas from the
Research and Development section.
d. Monitoring and evaluation of marketing permit numbers
PT. Kimia Farma (Persero) Tbk. has a regulatory section at the Head Office that
handles product registration. Product development in the Plant, especially Plant
Jakarta, will prepare data and information needed by the regulator in the marketing
permit process and inform the products that need to be varied.
2. Development of packaging materials
The functions of the Packaging Material Development section are as follows:
a. Handling alternative packaging materials
Covers the search for alternative sources of packaging material suppliers for cost
efficiency purposes and prevents the availability of packaging materials on the
market.
b. Packaging material design
The product development department will design the packaging that will be used for
existing products and new products.
c. Evaluation of packaging materials
Every change in packaging material will be evaluated for these changes.
d. Standardization of packaging materials
Standardize packaging materials so that they can be applied in general. Standardize
the size of the master box and adjust its capacity for cost efficiency and simplify
storage.
PS: This is only an illustration of one of the many pharmaceutical industries, between one
pharmaceutical industry and the other there may be some differences but in principle they
will not differ substantially.

The Research & Development (R & D) section of a company is responsible for all research
and development activities in the company. The R & D department is also responsible for
ensuring the quality of performance in the company in accordance with the standards set by
the company.
The R & D department is usually responsible for managing certain funds that the company
has budgeted for research and development. R & D conducts tests and often makes its own
test equipment and continues to develop new technologies to improve the quality of products
produced by the company.
R & D is also a part that is contacted if an outside party wants to collaborate with a company
relating to the procurement of goods and services for corporate research and development
activities.
In general, this is the duty and responsibility of the R & D department. Within each company
variations can occur depending on the services offered by each company and the size of the
company.

REFERENCES

1. Sampurno, 2007, Role of intangible assets on company performance: study of the

Indonesian pharmaceutical industry, Student Library, Yogyakarta, p. 61-73
2. http://www.ahava-cosmetics.ch/discover-ahava/research-development.jpg