| Brian Cass at Huntingdon Life Sciences describes the drivers behind the growth in strategic outsourcing
Those of us who have been in the non-clinical contract research industry for some time have witnessed a number of evolutionary shifts. These have been many and varied, from the nature of the organisations performing R&D and the technologies underpinning their advances, through to the legislative and regulatory framework within which we all work. However, few have been so exciting, and perhaps so challenging, as one of the key issues we find today – the changing nature of the relationship between contract research organisations (CROs) and their customers.
SHIFTING INDUSTRY DYNAMICS
As can be seen in Figure 1, the amount of money spent globally on R&D has risen dramatically over the past 10 years – by an average of 10 per cent per annum. Over the same period the total number of new molecules approved (small and biologic) has declined. This has led many to diagnose an innovation crisis in the industry, where continuous growth in new R&D is not generating the historical return on investment. Additionally, over that period, the pharma industry has seen increasing pressures on pricing and reimbursement as ageing Western populations put ever greater burdens on national healthcare budgets.
These pressure points, amongst others, have led to most of those responsible for leading the 21st century strategies of pharma companies to recognise that cost control is an increasingly important issue. As with many other industries before it, pharma is coming to realise that their hard earned dollars may be best spent on their core competencies; that is, the cutting-edge research that generates the next generation of human medicines. For the development portion of R&D, another strategy is required, and that has increasingly been outsourcing.
TRANSACTIONAL AND TACTICAL OUTSOURCING
Since the inception of the contract research industry, outsourcing has been conducted primarily on a transactional basis (see Figure 2 for an overview of an industry model of different levels of outsourcing). This has been characterised by the use of CROs on an ad hoc basis – that is, as and when a need is identified, usually due to an overspill from internal capacity. These relationships serve an important purpose, but can have several drawbacks in terms of efficiency and any added value from the relationship.
First, knowledge transfer from customer to CRO can be limited and fragmented. Scientific reports for a single study may therefore not easily incorporate results from other studies performed in-house that could provide additional insight into the data. Analysis could still be required in-house after the outsourced study is completed, adding additional cost and complexity to the project |
