For pharma companies looking to outsource parts of their clinical trial, picking the right vendor is one of the most important parts of the process. Two clear approaches to do this have emerged: competitive bidding and selecting from a list of preferred providers, but which is more effective? Clinical Trials Insight explores the pros and cons of each with Sirah Sheikh, global sourcing manager at Boehringer Ingelheim; and Sarah Ray, senior research analyst at Cutting Edge Information.
For a pharma company beginning a phase-I trial, there is a bewildering array of factors to consider, including whether to outsource parts of the trial or rely on its own facilities, resources and expertise. Once the company has made a decision to outsource, it needs to determine which specific tasks should be assigned to the third party, whether multiple vendors are required to meet particular needs, or whether it should use a single contract research organisation (CRO) that provides multiple services.
Solving these issues depends on the type of study and the specifics of a sponsor company.
However, in an era when drug development is more expensive than ever, the common denominator for most trials is the wish to save money. Ideally, a sponsor’s chosen strategy will be the one that gives them the highest quality research for the lowest possible price.
For those that choose to outsource, it is clear that vendor selection is a crucial piece of the puzzle. Select the wrong vendor and you may be forced to contend with delays, increased cost, reduced oversight and a poor cultural fit. In the worst case scenario, it may be necessary to change vendors halfway through the development programme, leading to further delays and a loss of familiarity as the new team attempts to pick up where its predecessors left off.
Because the stakes are high, many pharma companies opt to work with one of a few preferred providers – vendors they already know and trust. Lists of this kind do not merely itemise a sponsor’s favourite CROs. Rather, they include all vendor types that might support a company’s R&D processes, including central labs, site management organisations and patient recruitment organisations.
For others, the same urgency prompts a very different strategy: competitive bidding, during which vendors fight for a company’s business. Typically, between three and six vendors are approached with requests for proposals (RFPs). If the vendor believes its capabilities mesh with the sponsor’s needs, it will return with a proposal and a further presentation – leaving it to the sponsor to decide.
These strategies are widely used, but it is worth asking: which typically works best and in what circumstances is one approach preferred over the other?
Choosing the best method
According to Sirah Sheikh, global sourcing manager at Boehringer-Ingelheim, when a pharma company has a long-term project in mind, a preferred provider list is often the starting point.
“It gives you a lot of benefits because then you’ve set up your expectations already; you’re not managing so many vendors, so your oversight can be well done,” she says. “If you want to work on a long-term strategy and you’ve got recurring trials to outsource, then it’s definitely better to use a preferred vendor.”
Competitive bidding, she says, is more suited to one-off projects, when sponsors look beyond their preferred vendor list for the best price, quality and timelines.
“If you go with someone new, the vendor might be able to suggest some innovative strategies that you hadn’t thought about before,” she says. “If there is one preferred vendor and they know you are looking at someone else, it creates an element of competition, which sometimes compels them to think outside the box a little bit and maybe examine their costs and strategies.”
Sarah Ray, senior research analyst at business management consultancy Cutting Edge Information, says the level of formality associated with either approach – preferred vendor lists or competitive bidding – may vary from team to team, as will the single-mindedness with which they pursue their chosen strategy.
“Some life science teams may invoke a hybrid vendor recruitment and selection strategy, depending on what type of R&D they are looking to support,” Ray says. “For example, one small pharmaceutical company we spoke to engages in competitive bidding to fulfil roughly 90% of its outsourcing needs, but may reach out to specific vendors to fulfill others.”
Cutting Edge Information compiles clinically focused reports for the pharma and medical devices industries. In a recent report entitled ‘Clinical Outsourcing: Leverage Sponsor-CRO Relationships to Accelerate Timelines’, the company shows a deep insight into this complex and sometimes thorny topic.
Ray says that in many cases preferred provider lists are the best way for sponsors to eliminate headaches. Building such a list may be labour intensive, but it will almost certainly save time in the long-run by reducing the need to shop around.
After all, competitive bidding can be time-consuming, taking several months before a contract is signed. Since nobody wants to draw out what is already a protracted process, simply selecting from a pre-determined list can remove a few of the hassles.
This approach can also yield strong working relationships with a few select vendors. As sponsors gain familiarity with the names on their lists, they will develop a better idea about each company’s strengths and weaknesses, and will know what to expect when joining forces.
“They may be more confident about how well vendors align with the needs of current and future projects,” says Ray. “Conversely, vendors who work with companies over a long period will become comfortable with companies’ product portfolios and will not require as much background information or preparation.”
Of course, preferred vendor lists are far from a universal solution. An early-stage study in a particularly niche area may require more specialised services than what a list of favoured vendors can provide. A sponsor might need to branch with competitive bidding or by adding new partners to the list.
If a competitive bidding process is chosen, the company stands a strong chance of finding the best possible vendor for their particular needs at that time. Because vendors are given a forum to demonstrate their abilities well ahead of time, and explain how they might overcome challenges, unwelcome surprises are unlikely to arise
“Companies’ level of familiarity within a specific indication, and the types of work they are requesting, may dictate whether they take a competitive bidding or preferred vendor list approach,” says Ray. “For example, companies that are conducting research in new areas may need to undertake a competitive bidding process because they may not have identified the vendors best positioned to support these types of studies. By comparison, companies that are conducting research in familiar areas may turn to a preferred list, to collaborate with vendors that have supported them on previous studies and have a working knowledge of their clinical pipeline.”
Combine strategies
She says that companies may seek to combine elements of the two strategies by forming relationships with vendors on and off their preferred provider list in advance of any identified outsourcing needs.
“This allows executives that coordinate outsourcing decisions to understand vendors’ mindsets prior to the vendor selection process. Likewise, trial sponsors can get a sense of candidates that are not on a preferred list but might be good for specific projects, and send out requests for proposals accordingly,” she says.
Ray and Sheikh emphasise that building relationships is critical in this sphere. Although fee-for-service relationships still hold sway in the market – 57% of companies surveyed by Cutting Edge Information said that they favoured this model over a strategic alliance – there is a gradual shift towards long-term partnerships in which the third party is more than just a service provider.
“We have seen a movement towards long-term, collaborative partnerships, working on projects together and outsourcing exclusively to some vendors,” says Sheikh. “That’s a trend that’s going to continue. We are also seeing collaborations, not just on a sponsor-vendor level, but in the sponsor-to-sponsor arena as well, and that’s going to continue because competition in the market is so high.”
Ray says: “Trial sponsors are beginning to involve vendors more in the clinical trial planning process. Last year, we found that about 66% of surveyed pharmaceutical and device teams do not involve vendors in clinical trial design. Only 44% of companies indicated they will do the same by 2020.” Ultimately, picking the right vendor is only the first step in a long and complicated process. For vendors and sponsors alike, the real work kicks in when the trial begins and the two parties attempt to remain operationally aligned.
Sheikh cautions that despite the vendor’s experience, the sponsor cannot fully rely on contract partners to shoulder the burden. It still needs to ensure certain activities are retained in-house, and maintain an appropriate level of oversight over the outsourced processes.
“You have to agree upfront about your expectations from the CRO, and the CRO should do the same on behalf of the sponsor,” Sheikh says. “A lot of people go wrong with outsourcing because it’s not clear which activities are being outsourced. It’s important to really have clear roles and responsibilities, and know who’s accountable for taking the lead.”
Whether a vendor enjoys pride of place on a sponsor’s preferred provider list – or whether it is a niche CRO hoping to make a name for itself in specialised trials – the most important thing is to build trust. From the sponsor’s side, meanwhile, there can be little harm in casting the net wide, building a strong network of potential partners that may be able to collaborate when the opportunity arises.