In just 10 years, the drugmaker wants to leave the dirty work to others - in China and India. Dave Smith, AZ’s executive vp of operations, says the idea is to become a pure research, development and marketing organization. “Manufacturing for AstraZeneca is not a core activity,” tells The Times of London.

“AstraZeneca is about innovation and brand-building…There are lots of people and organizations that can manufacture better than we can. We would own the (intellectual property), the research, branding and the quality and safety issues…but (everything else) would be outsourced. The idea is to take out as many stages as you can,” says Smith, a former exec at Estee Lauder and Timberland.

Smith, who is leading a big cost-cutting effort, says the priority would be to outsource all manufacturing of active pharmaceutical ingredients and that it would be possible to find significantly cheaper contract manufacturers, many of which would be in the Far East. “We are looking to access China and India in a much more meaningful way,” he says. And later, AstraZeneca would outsource still more sophisticated manufacturing and logistics activities.

But this would take up to a decade due to regulatory hurdles. Right now, AstraZeneca has 27 manufacturing sites in 19 countries. Since February, the drugmaker has said it plans to shed 7,600 jobs - or 11 per cent of its 66,000 workforce, but Smith indicates this would be the start of an even more fundamental transformation of the business.

AstraZeneca is set to lose 38 per cent of its revenue over the next five years because of patent expirations on key drugs, including Arimidex, a breast cancer drug with annual sales of $2.2 billion; Seroquel, a schizophrenia drug with sales of $4.7 billion, and Symbicort, an asthma medicine with sales of $3.7 billion.

The majority of cuts announced so far are in manufacturing and supply-chain operations, while the research unit, which employs about 12,000 people, is expected to remain largely unscathed, the Times notes.

Smith wants to follow the example set years ago in the fashion, electronics and automaking industries by shifting away from the traditional model of a vertically integrated pharmaceutical company controlling everything from research to manufacturing and logistics.

He says the pharmaceutical sector is among the most conservative global industries in its attitude towards manufacturing and the supply chain, in part because of a history of high profit margins and stringent industry regulation. “We are going to go through a model of outsourcing the back-end,” he tells the Times. “We don’t see manufacturing as core.”

Other big pharmaceutical companies, such as Pfizer, the huge American group, have also begun outsourcing manufacturing recently. The company, which is the world’s biggest drugmaker said last week that it was shedding 420 jobs at its British factory, at Sandwich, Kent, and that it would opt to outsource some functions.