Partnerships Series Part II: What about CROs? Strategic Outsourcing Isn’t Just for Pharmaceutical Sponsors

By June 5, 2012BLOG No Comments

Written by: Tom Avery, Vice President, Strategic Business Development

Collaboration, transparency, executive oversight, mutual respect … these are all attributes we think of when we hear the words “strategic partnership.”  As mentioned in our previous blog Strategic vs. Tactical Outsourcing for Pharmaceutical Sponsors, there continues to be a huge shift from traditional, tactical outsourcing to a more strategic approach in the Pharmaceutical industry.  For Sponsors with mature partnership models in place, this means increased quality and R&D productivity as well as assurance in development timelines and ultimately costs.  For CROs, this means a greater need for innovation, an assumption of more risk and additional accountability for clinical output.  Just as sponsors are able to tap into additional resources in order to gain operational efficiencies and cost savings, CROs can do the same with specialized clinical service providers for cardiac safety, respiratory, imaging, ambulatory blood pressure, and other research related outcomes.

The increasing complexity of clinical trial activities has been driven by regulatory agencies’ growing demand for new endpoints.  Regulatory authorities are recommending new outcomes to be evaluated in both safety and efficacy trials, such as the need and expectation for quality of life outcomes in the development of oncologic drugs.  As the demand for these new outcomes increases, so will the CRO’s challenge for delivering reliable data and the need for specialty service providers whose core competencies are to deliver these outcomes efficiently.

For the CRO, a primary concern is the ability of the service provider to deliver high quality, reliable data in the context of the CRO’s service to the sponsor.  Successful collaboration between both parties is paramount since many new relationships between sponsor and CRO are built on risk and reward.  As the service provider becomes an extension of the CRO’s services, the success of a CRO’s relationship with a sponsor is directly impacted by the success of the relationship between the service provider and the CRO.  Therefore, if the service provider is unable to deliver the necessary quality outcomes data on a timely basis, then both organizations fail to deliver.

There are several considerations when laying the foundation for a successful strategic partnership.  For starters, it helps tremendously to have a basis of past collaboration and established success between the CRO and service provider.  Also, having a true understanding of the value the service provider brings to the CRO’s strategic focus and mission is imperative.  This strategic alignment, as well as mutual respect and trust must reach to the highest levels of both organizations.  Having executive buy-in may be the most important factor in building a successful collaboration.  A relationship that lacks a dedicated champion from each organization who is accountable and responsible for driving the relationship often leads to a communication breakdown.  Ensuring objectives are understood at the highest level will help prevent stakeholders from reverting back to the original, tactical touch points.  Also, establishing specific metrics and KPIs will facilitate relationship management and ensure that the standards of performance by the service provider are clearly understood.  If something does go wrong during service delivery, transparency is a must.  There cannot be an instance of finger pointing and looking to blame the other party.  Instead, there needs to be mutual responsibility and accountability.  Lessons learned meetings are a great way to measure, monitor and adjust the effectiveness of the relationship from a financial and operational perspective and to determine a strategic plan on how the relationship can be improved.  Failure to keep the executive management engaged would prove to be a huge hindrance to this process.

A strategic relationship between a CRO and an outsourced service provider can provide both organizations numerous benefits.  In the case of a traditional and contractual relationship between sponsor and CRO, you can expect an increase in operational efficiency which in turn will reduce site burden, direct costs and the probability of error in the final data delivery – leading to more usable outcomes data for the pharmaceutical sponsor.   With this success, the sponsor will understand the CRO and service provider as being aligned in terms of both quality and reliability, increasing the likelihood of moving toward a strategic relationship with that sponsor or at the very least, increasing the likelihood of repeat business. In the context of a strategic relationship, such as the Pfizer and ICON/PAREXEL partnership, where risk and reward are built into the contract, a CRO that is strategically in sync with its service providers will ultimately reduce risk of financial penalties and increase the chances of financial reward.  Finally, the expert consulting on how to conduct the sponsor’s clinical study in compliance with regulatory requirements offered by these specialized clinical service providers adds real value for the CRO and their clients.

Our advice is to be patient.  These types of relationships aren’t going to happen overnight.  Successful strategic partnerships take time, effort and other executive resources but the results are well worth the energy it takes.  Peter Gray, former CEO of ICON once said it best: “We believe the process of making these relationships work in a way that’s profitable takes time, but the whole premise behind these deals is that you align all your processes, and build and grow together, and the way you begin to interact soon enables CROs to be profitable and also allows the client to get good value for their money.”1

For more information on ERT’s Partnerships, please visit: https://www.ert.com/partners/

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