Pharmaceutical outsourcing: building a model6 March 2013
Outsourcing is nothing new to the pharmaceutical industry, but, as Craig Coffman
explains, it is gaining more importance in the current economic climate. Developing
an adaptable outsourcing model to suit varied projects and financial constraints can
be the difference between success and failure.
The length and complexity of a clinical trial makes it a huge undertaking, and every element needs to be handled not only with the highest order of rigour, but also with a close eye on costs. To access specialist capability that would be costly to build in-house,
and to leverage the cost advantage that contract research organisations (CROs) can offer, outsourcing is once again top of the agenda for many pharmaceutical companies.
"Outsourcing tends to be cyclical, and much depends on the philosophy of the pharmaceutical or biotech company," says Craig Coffman, senior director of clinical business operations and outsourcing at Endo Pharmaceuticals. "I used to work for CROs and there were some clients that would outsource everything, while others outsourced niche services. The drive to cut expenses means companies don't want to build internal resources, so there are lots of partnerships with global CROs to outsource everything from protocol development to the final report."
Endo is a US-based health solutions company that focuses on areas including pain management and andurology. Its approach to outsourcing has gone through many iterations. Until 2008, it had a preferred provider relationship with a large CRO, but the number and size of studies did not provide reasonable benefit to either party. Reverting to a decentralised model in which clinical trial managers served as their outsourcing function proved unfocused and inefficient, and provided less leverage with CROs. For the last three years, Endo has used a centralised outsourcing function with a best-in-class approach.
Coffman's experience in both the CRO and pharmaceutical company camps has helped him to appreciate that a defined model for outsourcing is needed by companies of all sizes.
Such a model will vary between companies. One approach is to work with a single global CRO for all outsourced elements, which requires the building of a long-term relationship. For others, a workable model could mean having a defined set of criteria that guide a company's approach to relationships with a range of CROs that perform niche tasks such as data management or site monitoring.
The key is to build a model based on experience and foresight, which provides clarity and transparency, and is based on realistic expectations. In short, define an approach to outsourcing that is versatile enough to suit specific projects, but which is based on sound principles that reflect both a company's goals and its culture.
"The benefits are that you get to maintain your intellectual capital and you get to know the CRO's culture, so outsourcing with a key partner becomes a repeatable process, which is better in terms of relationship and cost. There is a return for having a closer relationship with a CRO, but for that to work, you must have a pipeline sufficient to establish critical mass in the partnership," believes Coffman.
"Endo is a mid-sized pharma company. Our philosophy is to choose the best in class by country or region. That may be part of a global CRO, or it may be a smaller company to which our business might be more important. The issue with such an approach is that it requires the management of more service providers. In addition to the CROs, we also use a single data management company to encompass all of their work on a global basis," he explains.
The tactical approach of Endo is very different to forming a strategic partnership with a global CRO, but these still need similar underlying principles to maximise the chance of a mutually beneficial relationship.
"It is not always possible to harmonise across all relationships because of local regulations, healthcare environments or medical practices. So, we have to treat every relationship differently. But we can take a diligent approach to the selection criteria for a CRO before looking at the nuances of each market," adds Coffman.
The selection criteria for a CRO have been shaped over years of experience of outsourcing by the pharma industry. A CRO must be responsive to clients' needs, have experience in the specific element of clinical trials being outsourced, have qualified staff to do the job, and - given the long-term nature of clinical trials - it must be a good fit with a client's culture.
"Our approach involves a lot of work. One prevalent model is to hire a global CRO even if it doesn't have operations where you want to work and have it contract with a local provider. We prefer to own the contract directly. Regardless of size, companies all employ different approaches, but the underlying principles remain the same for all," says Coffman.
"A CRO must have experience in the therapeutic area beyond mere enthusiasm or responsiveness. They must have qualified staff and no matter how many studies they have done, you must check that it is the same people doing the work. Every CRO has a fair amount of turnover and staff that work remotely. I can accept a remote project manager, but they need to have been with their company for a reasonable period of time so that I know they can marshal the resources necessary to complete the study."
Versatility is another component that should be factored into the formation of any defined model for outsourcing.
"Ask if a CRO can integrate with other vendors. They need to work across the matrix of service providers if you have multiple relationships," notes Coffman.
"Above all, manage your expectations. Success means delivering on time and on budget, and every CRO will say they can do this. Partnerships take 12 to 24 months to set up, and the wheels usually come off when expectations are not met. Things change and clinical research is not an exact science, so go back and revisit your expectations at regular intervals. When those expectations change, communicate it early and be honest if they can't be met."