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The pressure is on

in-house R&D

organizations to deliver,

but those who best

manage their outside

Working partners gain the

competitive edge.

With CROs by Gary Tyson and

Tim Dietlin

utsourcing has an entrenched role tors as difficulty recruiting patients and by partner CROs and those conducted

O in clinical development. In a the need to replace underperforming by non-partner CROs, where perfor-

recent survey by Campbell Alli- study sites. Almost half of respondents mance is defined as achieving results

ance clinical development professionals, said that they need to improve their within timeline and budget. This sug-

37 leading pharma and biotech compa- CRO management skills significantly, gests that partnership at least as cur-

nies reported that 70 percent of their and fewer than one-third said their com- rently practiced may not be providing

studies had at least some component panies have standard CRO management added value.

outsourced. (See On the Survey .) processes and tools in place. Seventy

Manage Relationships

Without exception, interviewees antici- percent, however, have brought a mea-

pated increased use of contract research Clinical development organizations

sure of standardization to the prelimi-

organizations (CROs) for the foresee- within pharmaceutical and biotechnol-

nary stages of vendor relationships by

able future. And sponsors expect a single ogy companies have traditionally

establishing a centralized sourcing

CRO to handle a broader scope of activ- focused on managing and executing

group to manage CRO selection and

ities: In the survey, three-quarters of fully internal studies. Most successful study

contracting.

outsourced studies were delegated to a managers earned that position by hav-

Fifty-five percent of survey respon-

single, full-service vendor. ing detailed control and knowledge of

dents have established preferred part-

Outsourcing may be well established, their in-house studies, and most senior

nerships with a limited number of

but companies haven t yet learned how managers have risen through a hierar-

CROs. These partnerships aim to in-

to manage the process to realize all of its chy that values hands-on control.

crease the quality and efficiency of out-

potential benefits. Respondents report- Outsourcing, however requires a new

sourced trials, but for most respondents,

ed that 50 percent of their outsourced core competency in managing vendor

there was no discernable difference in

studies go over budget, citing such fac- relationships, competency that goes

performance between studies conducted

OUTSOURCING W W W. P H A R M E X E C . C O M

beyond traditional study management

Stakeholders Decision

to embrace vendor selection, contract-

ing, and risk management.

To realize the benefit of outsourcing, One key to successful outsourcing is vendor selection. This process should be a

organizations need to find a way to de- cross-functional one in which all key stakeholders from both the commercial and

liver excellent results without relying in clinical sides articulate their concerns. Vendor selection criteria should include both

the micromanagement level of control

general performance indicators and study-specific considerations. For example:

associated with internally managed

studies. The survey indicates that few GENERAL PERFORMANCE INDICATORS STUDY-SPECIFIC CONSIDERATIONS

pharmaceutical or biotech companies staff size, qualifications, turnover number of studies managed in the last

have effectively bridged that gap. rate at the CRO 24 months in the therapeutic area

Campbell Alliance s experience has CRO financial viability number of sites supported in the thera-

shown that clinical development groups record of achieving patient peutic area in the last two studies

can best manage CRO relationships by recruitment targets familiarity of staff with the specific

clarifying and standardizing every step quality record disease state

of the outsourcing process. Without

standards, study managers run the risk

of defaulting back into the microman-

agement behavior that has served them CROs and other vendors. It needs to be

The new core

well for in-house studies but fails to revisited each year to accommodate

capitalize on much of the value a CRO changes in the operating environment.

competencies of

can bring to the table. Once a company develops an outsourc-

Today, many companies outsource ing strategy, it must enforce it rigorous-

R&D leaders

trials based on short-term resource need ly. Although exceptions to the strategy

skilled vendor

rather than a coherent long-term strate- may be made, a substantial burden of

gy. To make outsourcing effective, orga- proof should rest on the person advo-

selection and

nizations need to start with an cating outsourcing of a study that does

outsourcing strategy. Given the length of not satisfy agreed-upon criteria.

management. Get It in Writing

the clinical development process, an ef-

While vendor selection and contracting

fective outsourcing strategy looks out

usually involve input and action by a

three to five years. It should include

a clear definition of the organiza- an estimate of likely retention levels sourcing or procurement group, it is

tion s therapeutic priorities an organizational plan based on critical to establish a clear work stream

an analysis of the product pipeline planned studies that specifies what and a communications protocol for

by therapeutic area to determine types of skills are needed in-house interactions between the sourcing

likely type and volume of studies, or from the CRO and roughly how group and clinical development. (See

including the likely countries within many of what kind of staff will be Stakeholders Decision .)

which the studies will be conducted needed Organizations that do not clearly

potential in-licensing and out- a set of recommendations on what define the roles and responsibilities of

licensing opportunities for products key criteria should be used to deter- all parties involved can add weeks or

by therapeutic area mine whether to outsource, includ- months to the CRO selection process.

an analysis of the likely countries ing therapeutic area, number of Since many CROs are unwilling to

within which the studies will be countries within which the study is initiate study work with only a letter of

conducted being conducted, and size. intent, the contracting process has be-

a frank assessment of current in- The outsourcing strategy defines come a major bottleneck in the rapid

house clinical expertise, including how the organization will leverage execution of studies. For that reason, as

On the Survey Campbell Alliance surveyed clinical development professionals at 37 leading

pharmaceutical and biotech companies to identify trends in the management of contract research

organizations (CROs). The 95 survey respondents ranged from study managers to vice-presidents

for clinical operations and represented a broad range of companies including AstraZeneca, Pfizer,

Abbott Laboratories, Amgen, TAP, Novo Nordisk, Millennium, and Merck.

OUTSOURCING W W W. P H A R M E X E C . C O M

well as the desire for pricing and

By establishing relationships with preferred

staffing concessions, it is worthwhile to

establish preferred-vendor relation-

vendors, R&D organizations can eliminate

ships with select CROs. These vendors

bottlenecks common to the CRO contracting

should have relevant specialized exper-

tise or a track record of working effec-

process and help expedite study execution.

tively with the sponsor s clinical

development group. As the survey indi-

cates, these relationships are no guar-

antee of better performance, they can data collection and management milestones and a payment structure

reduce the contracting time through the phases, which are often excluded in tied to them

negotiate non-timeline related met-

use of master service agreements contracts

agree on general ranges of hourly

(MSAs). The specific terms of the con- rics, including the number of

tract will depend in part on the goals rates, taking into account reason- patients recruited and the number

the sponsor is trying to achieve: able factors for increase, such as of sites initiated

determine the exact bonus/penalty

Performance. If the goal is to im- inflation and staff expertise level

agree in principle on the use of mile-

prove study performance and reduce approach that works for the specific

costs, sponsors should stones (where reasonable) and the study

gain agreement not only on the agree on the specific staffing and

ability to tie at least some payments

legal language of the MSA, but also to milestones process for staff change-out.

agree in principle on the use of

on the standard language on the Collaboration. When a goal is to fa-

specific activity agreements needed bonuses and penalties. cilitate effective collaboration between

for each study Control. If the goal is to minimize the CRO and the sponsor s staff, the

negotiate for control or recourse in delays and cost overruns, the sponsor sponsor should

gain agreement up front for vendor

the case of staff changes during the should

agree on a set of specific project

course of the study, including the support of the internal reporting

Traveling Light

A RAPIDLY GROWING PHARMA COMPANY has made exten- cient means of managing those relationships. The solution: a web-

sive outsourcing of clinical development efforts a key component of based outsourcing tool. The powerful tool provides a graphical rep-

its business model. Shire Pharmaceuticals which realized more resentation of each step in the clinical trial process. All relevant

than $1.2 billion in 2003 revenues has only 1,700 employees materials to support each step are available at the click of a

worldwide. Shire s ability to establish high-value CRO partnerships mouse anything from an RFP template to a copy of the actual

is a critical factor in its success. protocol. Organized in a very logical fashion,

Shire s web-based

In 2003, Shire spent more than $100 the site takes a user in step-by-step fash-

million on clinical trials and 95 percent of its ion from developing the highest-level strat-

tool exemplifies the

clinical development efforts were outsourced. egy for undertaking multiple studies down to

new efficiencies

Today, the company is confident that its CRO the day-to-day activities of getting an individ-

possible in vendor

partners can meet aggressive timelines with- ual study done.

out sacrificing quality. The website serves as a process man-

management.

It began in the spring of 2002 when Shire agement tool, in that it has the steps everyone

clinical development leaders recognized an needs to follow, as well as a knowledge repos-

opportunity to improve outsourcing relationships. First, the company itory. This brings together the best practices from all over the com-

pared down the number of CROs it used to a handful of preferred, pany and puts them in a central place.

full-service partners. It used rigorous criteria to identify the best part- Since implementing the new system, Shire has dramatically

ners, including demonstrated ability to manage large global studies improved the efficiency with which it evaluates, selects, and man-

in Shire s key therapeutic areas while maintaining a high level of qual- ages its clinical development vendors. Shire and its partners have

ity and customer service. established the close working relationships and standardized

Once preferred CRO partners were selected, the next chal- practices necessary to produce consistent excellence in clinical

lenge was to provide clinical development personnel with more effi- trials outsourcing.

OUTSOURCING W W W. P H A R M E X E C . C O M

Contract terms With the visibility and scrutiny of in-house

depend entirely on research efforts at an all-time high, R&D

the specific goals leaders must manage the expectations of

sponsors want to internal audiences including marketing

achieve. executives.

processes needed to support the allow the group to efficiently oversee ficient data in a form suitable for sharing

study multiple studies and multiple vendors with internal stakeholders with a mini-

negotiate the status-reporting simultaneously. A critical part of the in- mum of internal rework.

process and directly address expec- frastructure-building effort is to define The tools needed to support these

tations of the level of control for the role of the outsourcing project man- processes can take many forms. (See

both sponsor and vendor ager role and to determine how many Traveling Light .) The key is that they

set clear expectations about knowl- studies a single project manager can re- be clearly documented, easily accessed

edge transfer from the CRO to the alistically handle. Once the project and understood, and consistently used

staff and communicate these expec- manager role is defined, clinical devel- by sponsor personnel. Additionally, the

tations internally as well. opment executives can identify the effectiveness of processes and tools

Based on the survey results, even skills that the position demands and de- needs to be consistently measured to en-

those organizations with a set of pre- velop training to bolster any areas of sure they are enhancing the value of

ferred vendors still outsource at least 25 weakness. CRO relationships. Metrics should in-

percent of their work to nonpreferred Beyond managing vendors for clude basic study execution metrics

vendors. In particular, specialized out- greater efficiency, clinical development such as recruitment versus projection,

sourcers may not look forward to needs to manage the expectations of in- costs versus budget, actual versus pro-

enough business to justify the cost and ternal audiences. As blockbusters with- jected timeline. They should also in-

effort of establishing a preferred vendor in pipelines have grown rarer, the clude vendor performance metrics

relationship. visibility of existing clinical develop- based on key contract terms and the

When more than one vendor compa- ment efforts has risen. More functions number of contract extensions or ex-

ny is used, it is important for the sponsor than ever before, including marketing, ceptions needed.

to negotiate the roles and responsibilities medical affairs, managed care, and se- Clinical development in pharma is

of each of the vendors during the con- nior management are interested in the going through a major evolution. Fully

tracting process. If this doesn t happen, progress and results of clinical trials. in-house studies the kind that taught

the sponsor is likely to find itself forced Clinical development needs to put in most clinical development leaders their

to take on the role of referee. place processes for managing and re- craft are becoming increasingly rare.

Selecting a CRO and writing a con- porting on studies that are as robust as At least part of most studies are being

tract are just the first steps. To effective- the processes many have in place for outsourced. Moving from study execu-

ly leverage CROs, clinical development conducting them. Unfortunately, orga- tion to vendor management is a struggle

leaders need to build the infrastruc- nizations often fail to establish a clear for many organizations. But clinical de-

ture organization, processes, and structure for managing communications velopment groups that master this skill

tools to get everyone on the same among various stakeholders and clinical set will have a competitive advantage

page in executing complex activities. development. As a result, many project for the near future.

The structure of the internal group that managers spend a tremendous amount

manages these relationships should be of time and money working with CROs

Gary Tyson is vice president and Tim Dietlin

streamlined, with relatively few layers, to develop a series of overlapping ad hoc

is a director in the clinical development

so that accountability is clear both reports. Ideally, the project manager

practice of Campbell Alliance, in Raleigh,

within clinical development and to the should establish a clear status-reporting

North Carolina. They can be reached at

partner CRO. At the same time, the process using standard reports and 919-***-****.

structure must be sufficiently robust to tools. That way, CROs can generate suf-

Reprinted from PHARMACEUTICAL EXECUTIVE, June 2004 Printed in U.S.A.

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8540 Colonnade Center Drive, Suite 401, Raleigh, NC 27615

919-***-**** www.campbellalliance.com

Gary Tyson can be reached at 919-***-**** ext. 135, or abqixl@r.postjobfree.com

Tim Dietlin can be reached at 919-***-**** ext. 144, or abqixl@r.postjobfree.com

Printed in U.S.A.

Copyright Notice Copyright by Advanstar Communications Inc. Advanstar

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