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Changing Landscapes


Well-planned and managed outsourcing partnerships may hold the key to improving efficiency in areas such as respiratory and ePRO, helping companies to gain a competitive advantage in this tough economic climate.

Outsourcing clinical trial management is a growing trend in the pharmaceutical industry as the demand for capacity, speed, an expanded geographic footprint and cost containment continue to develop. Other factors leading to project outsourcing are the increasing complexities of clinical trial activities and the rising number of smaller sponsors conducting their own clinical research. Recent research by the Tufts Center for the Study of Drug Development has revealed that spending on new drug development is growing at a rate of 9.1 per cent annually, while global spending on contract clinical services is growing almost 50 per cent faster at a rate of 13.4 per cent (1).

As the industry moves forward and the current market pressures cause sponsors to change their relationships with vendors, outsourcing practices have begun to evolve and mature. Pharmaceutical companies are challenged now, more than ever, to conduct their clinical research efficiently in order to reduce costs while enhancing productivity. More than 92 per cent of sponsors and service providers surveyed by the Avoca Group felt that the level of outsourcing relationship efficiency in 2009 would not adequately meet future need (2).

Strategic Partnerships

In response to the changes in the outsourcing landscape, mature sponsors have begun to strategically look for high quality partnerships that will deliver the best results and the most satisfactory vendor relationships. Others continue to outsource projects tactically to satisfy a short-term goal for the lowest possible price. A company’s choice to outsource tactically through a transactional relationship, or strategically as business partners is uniquely driven by their internal culture and business philosophy.

Strategic outsourcing relationships and alliances often begin to take shape when the sponsor company realises that a particular contractor can provide value-added services and expertise that the company itself may not have the competency or resources to accomplish. With true partnerships in place, relationships are based on trust and communication, allowing for greater transparency and improved service levels. A Jeffries survey of 60 pharmaceutical and biotechnology executives indicates that nearly 80 per cent of respondents believe outsourcing provides efficiencies that reduce development times and, in turn, costs (3).

Having an established relationship with a shortlist of preferred providers who offer a broad range of services, global presence, financial stability, and best-in-class quality can significantly increase the return on outsourced development efforts and cost. A further benefit realised when working with a smaller number of bestin- class providers is continual knowledge management. Processes can become better aligned with experience, building long-term value and better integrating the operations of both companies to support business goals. Finally, with the confidence that they are doing business with a trusted provider working in their best interest, pharmaceutical executives are better able to focus on corporate strategy instead of the operational day-to-day tasks.

A recent example of this new trend is the announcement made in June 2011 that Pfizer has selected two CROs, ICON and PAREXEL, as their strategic partners. John Hubbard, Senior Vice President and Worldwide Head of Development Operations for Pfizer, stated that “the goal of this collaboration is to increase R&D productivity.” He also noted numerous other benefits from these relationships, including improved focus, moving from 17 functional service providers to two (4).

Based on the findings of the survey conducted by The Avoca Group (2), it appears that pharmaceutical companies will become much more selective in choosing their service providers based on their strong capabilities and the quality of their services. When major sponsors were asked what specific changes they planned to make within the next five years regarding their outsourcing vendors, the majority responded by indicating they will be outsourcing work within preferred provider relationships, as well as beginning to consolidate the number of vendors where possible. At the time of the survey, 69 per cent of the sponsor companies reported having preferred provider relationships.

A New Landscape of Risk

As trends in outsourcing develop, the pharmaceutical industry has also witnessed a shift in the type of risk experienced by CROs when collaborating with sponsors. In the past, sponsors typically treated outsourcing as a transaction rather than a partnership, placing less focus on quality and reliability and more on price. As a result, a CRO’s risk was typically related to maintaining a profit margin while operating in a competitive environment, with an unreliable future.

With pharmaceutical companies increasingly looking to develop strategic, rather than transactional, partnerships, CROs that are selected as strategic partners are benefiting from the guarantee of fixed business and a more stable and predictable future. With these benefits, CROs also face a new type of risk, based on the understanding of ‘penalty and reward’ and the ability to meet or beat a sponsor’s timelines and demands in order to ensure continued partnership.

The Relationship Between a CRO and Vendor

In this new age of strategic, risk-sharing relationships between major CROs and large pharmaceutical companies, CROs increasingly need ancillary service providers that can deliver all necessary outcomes in an accurate, consistent and timely manner. In line with this, CROs are recognising the benefit of vendors that offer centralised, electronic methods for the collection of health research outcomes data across a host of areas, in order to provide streamlined efficiencies and keep clinical trials on track and on budget. A centralised, electronic approach not only improves efficiency but also removes the risks associated with decentralised, paperbased approaches. These risks include inconsistency of device functionality and usage, transcription or data input errors and varied interpretation of results from many sites. All of these risks can significantly compromise data integrity.

Many major CROs have chosen not to invest internally in certain ancillary service niches, since it requires significant infrastructure to ensure high quality and there is no guarantee these services will be required consistently in the future. As such, it makes sense for CROs to strategically select vendors that offer a suite of specialist expertise and services across multiple areas. By selecting a vendor that offers the option to utilise solutions independently or to unite any combination into one comprehensive solution, CROs can benefit from a flexible platform that provides project management continuity across clinical disciplines under the governance of a single contract. This not only increases the efficiency of reporting by integrating results and streamlining trial management processes, but lowers trial costs.

Application Examples


A good example of how a vendor’s specialist services and expertise can benefit a CRO is in the respiratory field. Developing treatments to cure, prevent or provide palliative effect to sufferers of respiratory diseases involves a significant investment. In the last four years, the industry has spent an estimated $1.2 billion in developing new treatments for asthma alone (5). The investment cost associated with the development of new respiratory treatments is a key incentive for pharmaceutical companies to prioritise high quality data during clinical trials. Good quality data can accelerate the chances of compounds being accepted by the FDA and other regulatory bodies, in addition to helping companies identify no-go projects at an early stage and, as a result, avoid further investment into compounds with no chance of success.

When developing treatments for asthma and chronic obstructive pulmonary disease (COPD), pulmonary function testing (PFT) is used to determine the compound’s efficacy. PFT indicates the improvements to the respiratory system caused by the treatment being tested. The main pulmonary function test utilised in asthma and COPD research is a basic spirometry test. Spirometry testing involves the cooperation of the subject to give a maximal exhalation or effort in order to obtain good quality data. An untrained or poorly coached subject can cause the data to be of low quality and may actually mask a treatment effect. This can heighten the potential for the parameter in most respiratory studies to be overestimated or underestimated depending on the error. Comprised data quality can also occur for a multitude of reasons, with a lack of standardisation due to the use of a decentralised approach cited as a key cause of heightened variability. A lack of standardisation can impact equipment, reference equations, test performance, training and transcription errors, resulting in increased variability and unreliable data.

An experienced vendor with trained staff, specialist technology and centralised spirometry services provides sponsors with increased consistency of processes, reduced variability, and the cleanest and most accurate results. As a result, more reliable data can be collected throughout the course of a respiratory clinical development programme, resulting in greater confidence and increased statistical power. Additionally, improved data reliability means that a trial can deliver the same level of confidence with fewer patients and thus reduced costs.


Outcomes-based research drives the need for improved data collection, which has led to a move towards collecting data electronically – a shift fostering cleaner data collection and more cost efficiencies. By moving to electronic, the pitfalls of traditional paper solutions, such as errors associated with manual data entry and inaccurate, incomplete, illegible or imaginary data, can be avoided. Capturing data electronically reduces queries, minimising the burden on an investigator site, as it produces more accurate subject reports. Real-time data collection allows optimisation of a trial while giving clearer insight into the critical needs of patients.

Over the past decade, the industry has begun to embrace electronic initiatives such as electronic patient reported outcomes (ePRO) devices to help streamline the clinical trial process, maintain regulatory compliance and monitor patient safety. ePRO devices function primarily by presenting patients with questions that will automatically adjust based on their responses (branching logic).

When using ePRO, it is of utmost importance for sponsors, prior to the initiation of a drug development programme, to establish the appropriate standardised, consistent questions that will be posed to patients during the programme. For each new compound under investigation, the pharmaceutical company will be looking for certain outcomes, but it may not have necessarily decided which exact questions and respective answers can lead to those outcomes.

A vendor with appropriate expertise can ensure that a set of proper and accurate questions is decided upon early in the programme, thereby creating a much higher probability for a rapid and reliable end result. The sooner the sponsor achieves the required outcomes and interprets them, the quicker a decision can be reached on whether the compound in question has real value and potential, and is thus worth investing resources into its development. Overall, the ePRO services of a specialist vendor can increase the efficiency of a clinical development programme by obtaining answers to key questions as quickly as possible, thus avoiding further investment into unsuccessful compounds.


Strategic partnerships with preferred, expert vendors will play a key role in ensuring the collection of accurate, timely, and reliable health outcomes data driving efficiency in clinical development programmes and reducing costs. By selecting vendors that offer streamlined electronic collection, CROs can establish a truly centralised approach to collecting clinical trial data, reducing the risks and costs associated with a paper-based approach and ensuring they offer a reliable, accurate and timely service to sponsors. Without a considered R&D outsourcing strategy, the efficiency of the R&D pipeline can be significantly hampered and, in a worst case scenario, a company can lose its competitive advantage. By contrast, getting it right can result in multiple meaningful competitive advantages, including improved development effectiveness (more consistent processes and more successful globalisation), improved time to market and cost efficiency improvements (6).

The industry appears confident that the change in outsourcing strategy toward long-term relationships, preferred providers and relationship management programmes will continue to enhance the level of efficiency and alignment between sponsor and vendor in clinical outsourcing.


  1. Tufts Center for the Study of Drug Development, Outlook 2010: Estimates of Global Demand for Clinical Services Outsourcing, January 2010
  2. Calaprice-Whitty D, The future of clinical service provider-sponsor relationships, PharmTech, available at www. the-future-of-clinical-service-providersponsor- re/articlestandard/article/ detail/707026
  3. Windley, Hilgenbrink and Dodge, Pharmaceutical Services: Growth Forecast in the High Singles, How Soon Will We Get There?, Jeffries and Company, Inc, 19 April, 2011.
  4. Wright R, Strategic partnering for innovation: Perspectives from the CRO side of the table, Clinical Leader, September 2011
  5. Parexel Biopharmaceutical R&D Statistical Sourcebook 2011/2012
  6. Strategic review of R&D outsourcing – an essential step towards R&D transformation, available at www. strategic-review-of-rad-outsourcing.html

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With over 28 years of experience in the life sciences and pharmaceutical industry, Tom Avery currently serves as ERT’s Vice President, Strategic Development. He is responsible for ERT’s global strategy for building alliances with the CRO community. From 2008 to 2011, Tom led the business development team focusing on the needs of small to medium size biotech and biopharmaceutical organisations for all of ERT’s service and product lines. Prior to joining ERT in 2002, Tom spent 18 years at Abbott Laboratories in several key sales and marketing roles. He is a former US Air Force pilot and graduate of the US Air Force Academy.

Tom Avery
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