Vikki Renwick

The pharmaceutical industry has experienced a number of difficulties during recent years. Greater competition from generics (more than 60% of prescription drugs are supplied from the generic market) and increased gaps in the drug pipeline that result in acquisitions or strategic alliances has led to a feeling of uncertainty in the bio/pharma marketplace. There have also been changes in the marketplace with a shift from primary care to specialty drugs, the introduction of personalized medicine driving the need for biomarker/diagnostic technology and the introduction of biopharmaceuticals. 

With the pressures of time-to-market, the associated costs of discovery, the attrition rate from generics, and patent expiry and development in pharmaceutical products, pharmaceutical companies are increasing their investment in off-shoring and outsourcing. Whether this is strategic or tactical, the contract research organizations (CROs) need to be pro-active in responding to their sponsor's requirements for cost-effective services; for example, by offering a breadth of services, an innovative approach and a commitment to the sponsor in terms of understanding and risk sharing. 

As industry constantly strives to cut development times, maintain quality, reduce development costs and boost productivity, there has been an increase in outsourcing spend. Since 2001, the pharmaceutical industry has upped its financial commitment to contract clinical services by 16% annually to $6.6 billion (€4.45 billion),

  which is greater than the annual rate of growth in overall development spend (11%). 

Strategic outsourcing allows a  pharmaceutical  organization to focus on its partners' core strengths and long-term goals. It enables the sponsor to  maximize the vendor's internal resources and capacities, thereby adding value to the product development process. This route provides a flexible  service model. As an example,  pharmaceutical companies will  estimate their required capacity for a period of 3–5 years, reviewing how they can utilize key talent, resources and equipment from a CRO partner supporting, for example, low-risk projects, allowing more productive use of internal resource.

Tactical outsourcing relates to short-term projects that cannot be handled internally because of the lack of capacity or resources. This route allows for streamlined processes, fast turn around times, access to additional equipment and so on. One example is outsourcing to peaks and troughs in work on a project by project basis, such as ICH product method revalidations.

The pharma head count has remained static and current challenges have altered the dynamics of the market, which has a focused on R&D performance and strategy.

With the influx of small and medium-sized biotech enterprises, pharmaceutical organizations have become reliant on CROs for a full service infrastructure, experience and greater efficiencies to support Phase I–IV studies. The problem of choosing the right outsourcing partner has been exacerbated by the recent growth in the number of CROs entering the market. Often these organizations appear to offer similar services and returns for the customer, which makes the partnering decision difficult. 

The majority of companies are moving from tactical to strategic outsourcing and are looking to develop partnerships with CROs. Before entering into such an agreement, an initial assessment of the CRO should be made. Important factors to consider include:  

Sufficient and relevant technology, including software infrastructure.

These factors, combined with effective communication, provide the basis of a good CRO/pharma partnership.  

Bioanalytical outsourcing adds a further level of complexity in managing a CRO, but allows for added value such as rapid — but regulatory-compliant — method validation. The critical factors for identifying a bioanalytical partner are:  

Scale and flexibility in capacity, but also in understanding potential delays and variations in projects.

Commitment to the project and associated risk — a clear  understanding and shared vision promotes the growth of an  excellent partnership.

Costing versus confidence —  technical expertise, a breadth of experience in method development, validation and clinical sample  support is  paramount.

Communication — this should be a two-way process to help promote clear, up-to-date  project status and to manage expectations. 

Key performance indicators. Projects vary in complexity, but performance and track record measuring processes, staff and the end result are key to understanding future project expectations.

Contracts — clear goals and  objectives established at the start of projects.

Financial stability — ensuring your CRO partner is a reliable, long-term resource during lengthy studies.

Quality of work is paramount to bioanalytical studies, and is a measure of the systems in place within a CRO to facilitate timely delivery of high-quality data and reports. It is important to determine which quality systems a prospective CRO has in place:  

Are the vendor's quality systems adequate (standard  operating procedures in place and good laboratory  practice-accredited)?

Inspect the quality process, and review  procedures and peer-review steps.

Are they adhering to the latest  regulations?

How long have they maintained  accreditation?

How much sponsor feedback have they received and how  positive/negative is it?

Do they have complete training records and an adequate training programme that gives them a  technically astute resource for  projects?

With the time and financial commitment in planning and outsourcing clinical and supporting bioanalytical analysis, commitment between the sponsor and CRO promotes an effective partnership. Each project is individual and can vary in size, but implementing the following can enhance the partnership:  

A shared vision — planning and forecasting future workloads.

A single point of contact within the CRO and continued project updates that ensure all parties are aware of changes in the projects and timelines.

Having a shared understanding of the risk and sharing the successful outcome of a project.

Having a master services agreement in place and detailed contracts that allow the CRO to understand the exact requirements of the  project from the outset.

A structured and disciplined approach to communication can deliver desired business benefits. This should include:  

Effective kick-off meetings stating clear expectations, milestones and delivery targets.

Clearly defined roles and  responsibilities of the sponsor and CRO.

Tools, templates and formal processes for documenting  sponsors' expectations prior to the start of any project. 

A recognized format for feedback throughout the duration of a  project, such as status reports or a project manager.

Project review using key  performance indicators/ratings to allow timely sharing of knowledge and information to reinforce the relationship/partnership.

When faced with the prospect of outsourcing you must be convinced of the viability and robustness of your decision to hand over control of a project to a third party. As the project manager, you must also be confident about getting value for money, quality and delivery.  

Cost is often a key factor, but is very rarely the most important. You will be reluctant to spend even a small amount of money if you are not confident in the CRO's ability to deliver on time and to the specified quality. Missing targets can be very costly to both the CRO and sponsor, and absorbs valuable time. 

Indicators of good service provision are:  

CROs' understanding of sponsors expectations.

Articles

The pharmaceutical industry has experienced a number of difficulties during recent years. Greater competition from generics (more than 60% of prescription drugs are supplied from the generic market) and increased gaps in the drug pipeline that result in acquisitions or strategic alliances has led to a feeling of uncertainty in the bio/pharma marketplace. There have also been changes in the marketplace with a shift from primary care to specialty drugs, the introduction of personalized medicine driving the need for biomarker/diagnostic technology and the introduction of biopharmaceuticals.