Companies are now willing to outsource even the pacing technology that is intended to give them their competitive edge. The term “virtual R&D” has been coined to describe a situation in which a company has no actual R&D laboratory, but by placing contracts for development and testing, by collaborating with others to procure pre-competitive research, and by establishing links with laboratories carrying out fundamental work, it can procure all the components of a complete R&D program. An advantage of contracting out is that the work can go to wherever the best specialists and facilities are available. The pharmaceutical industry has for some time recognized that compliance testing of new drugs is a routine operation that they can contract out to specialized testing companies. The industry is now going further and arguing that all stages of the R&D process can be contracted out, even the initial drug discovery programs, so long as ownership is secured by contract.