Cut costs, not quality: outsourcing in clinical trials5 July 2013
Cost control has become the mission of many industries in recent years and the pharmaceutical sector is no exception, which is one reason why outsourcing in clinical trials has grown in popularity. It is crucial, however, that the bottom line is not the CRO’s sole focus because there must be no negative impact on quality. Jim Banks considers the checks and balances with Swedish Orphan Biovitrum’s Annika Ekelöw.
From the earliest days of outsourcing - be it in the pharmaceuticals sector or in call centres for banks - the prime driver has always been cost reduction. Moving a process to a specialist service provider or to a low-cost jurisdiction brought either economies of scale or labour-cost arbitrage, but the goal was always to get the same results for less money. Over time, however, outsourcing has come to be seen in a different way. Cost-cutting is now one element in a wider context. It is not about getting the same for less, but about getting more for your money, which is not the same thing. The nuance is that cost control is not the only goal. Outsourcing, especially in clinical trials in the pharma sector, is about getting well-trained and experienced people to perform crucial processes, retaining a lean in-house team and having more flexibility in planning clinical studies.
"Cost is, of course, one of many topics on the agenda, as it is always important in clinical trials, but quality is more important," explains Annika Ekelöw, senior clinical outsourcing manager in the clinical operations team at Swedish Orphan Biovitrum (Sobi). "We should think about getting value for money rather than just cutting costs.
"If you were building a car with a budget of $1 million and you needed to cut $100,000, you need to know what part of the car is less important. Would you leave out the steering wheel, or maybe the tyres or cut down on comfort? What you need to do is make sure the money is well spent, so the main focus is always on quality."
Sobi is an integrated pharmaceutical company that develops innovative therapies for rare diseases, notably in the areas of inflammation, haemophilia and neonatahalogy. It has developed world-class capabilities in protein biochemistry and biologics manufacturing development, and its current late-stage pipeline includes three phase-III programmes that are showing great potential.
As a relatively small company, Sobi uses a model of full outsourcing for all of its clinical trials, so it knows well how to navigate the potential pitfalls that arise in engaging CROs.
"For any pharmaceutical company, it is important to know what it is being outsourced and to set standards of quality and equally important, have a clear timeline," says Ekelöw. "Quality, cost and time are the elements in the golden triangle.
"At larger companies, it can be an option, as some or all of the work could be done in-house, but for us, it is very different. There are very different considerations if you are a company outsourcing 50 clinical trials than if you have only one or two a year. It is very hard to be cost-effective in-house if you are only doing very few studies."
Finding a match
For a small pharmaceutical company like Sobi, there is very little margin for error when it comes to engaging a CRO to handle clinical trials. Each study is vital for the business, as well as for the patients who may benefit from the results, and each study gets much more attention at a smaller company.
"We have a good clinical outsourcing process in place, whether it is to outsource a single process or a whole study," explains Ekelöw. "It usually begins with an RFP, which lists the activities we want the CRO to handle - for example, what, when and how?
"It also sets a budget schedule that allows us to compare the costs of different CROs. The most important thing is that we are open and clear from the start so that we do not simply choose the CRO that is the lowest bidder. We aim at finding the CRO with the most complete and realistic budget."
At the birth of outsourcing, it was generally assumed that the company that would do the job for the lowest price would get the contract. But too many painful lessons have been learnt across every industry that took this approach to outsourcing. Now, companies looking for outsourcing partners are wiser and look beyond price. However, it seems that this lesson is yet to be learnt by some CROs.
"We choose the CRO with the most realistic proposal and budget, as it shows that it hasn't misunderstood our needs or cut any corners," explains Ekelöw. "Most CROs still want to present the lowest budget to get the job and they plan to put the rest of the costs in a change order. We want to work with a budget and we only accept changes to the budget for additional scope that could not have been foreseen by the CRO at the time the budget was finalised.
"We do very few repeat projects with the same CROs because we often need specific skills in certain areas for each study, so we do a lot of RFPs. I am surprised that bidders still focus on price. A fixed-price contract, which was more or less impossible some years ago, is now more common and acceptable for many CROs. A fixed price focuses the CRO on getting it right first time. It also gives the sponsor company more control over the trial in terms of budget. You also need to know what you are paying for. We pay only for deliverables, not for things like hourly rates."
Sobi has had good results taking this approach to RFPs, largely because it has the necessary understanding in-house of the risks, and it has the experience to review proposals from CROs in an informed way. This means that it can avoid the potential pitfalls that come with not giving the CRO the full picture from the start and make the CRO accountable for its activities.
For other risks, such as the potential of a CRO to go bankrupt, Sobi's clinical trials managers - like Ekelöw - once again have to call on the experience in the market to assess a CRO's financial stability, capability, capacity and corporate culture.
"You have to look at its capabilities, its level of experience and how it is organised," says Ekelöw. "For us, a CRO must have a flat organisational structure similar to ours for the collaboration to work optimally. You also have to think about how much attention the CRO will give you, particularly if you are a smaller company like Sobi. To us, a single study is more important than it would be if we were a huge pharmaceutical company.
"Sometimes, in order to get the right level of attention, we work with smaller CROs, but mostly we work with mid-sized and large CROs. Sometimes we need a CRO with a geographical spread for our studies - sometimes it is important that they can provide full service and often we need a CRO with specific experience within a certain area. So, we need to make sure that we have a good clinical trials outsourcing process in place to enable us to make the right choice of partner for each study."
Needle in a haystack
With a vast number of CROs to choose from, a lot rests on the quality of the clinical trials outsourcing process.
"There are so many CROs out there - I have over 200 on my register - so it can be hard to choose," Ekelöw says. "Many of them can do full service contracting. We must look at the differences between them. Their hourly rates usually don't differ that much. We have to look at areas like efficiency, organisation and company culture.
"You need a lean organisation not only to bring costs down, but also to save time. My advice to any sponsor company is to get a good clinical outsourcing manager and good outsourcing process in place. It is also important to allow the time needed to find the right CRO. It is the mistakes and the delays in deliverables that cost you money."