Outsourcing clinical trials, which began in the 1970s, used to be largely dominated by big pharma organizations. But over the years, as many more third-party vendors entered the market, outsourcing has provided services at a cost and scale that even smaller biopharma companies can use.
In this post, we explore the current state of the clinical trial outsourcing market, paying attention to some of the core components of what it takes to make the relationship between a sponsor and contract research organization thrive.
A Market Overview
An effective means of analyzing the state of outsourcing in clinical trials is to look at the global market for CROs. According to a 2022 report by Fortune Business Insights, the global CRO services market reached $62.75 billion in 2021. It is projected to reach $163.48 billion by 2029 — an overall growth rate of 12.1 percent.
The research states that increased R&D investment is one of the major reasons behind this growth, but so too are the improved time and cost savings won by using outsourced services.
Influences Behind Outsourcing
Downscaling has led to increased outsourcing by pharmaceutical companies, the causes of cost-cutting being similar to many other industries. But several factors affect the clinical trial industry specifically, write Ram Hari Chapagain and fellow researchers in a 2022 article in Human Vaccines & Immunotherapies. These include digitization, access to information, and patients’ concerns about clinical trial participation.
With many multinational trials, it’s simply not feasible for sponsors to take on all of the operational requirements. Using local CROs or multinational companies with international teams makes this job much easier.
Secondly, digitalization has been a boon for the industry but it brings with it compliance issues and the need for technical skills and improved data security. CROs are able to help sponsors overcome these concerns without the latter needing to hire permanent staffing.
Finally, precision medicine means a lot more work for researchers and greater complexity in trial designs and operations. CROs take care of these issues while sponsors focus on drug development.
CROs Benefit as Big Pharma Downsizes
The CRO market is thriving because these organizations have taken over so much of the work pharma companies used to keep in-house. And this trend only came to the fore a few decades ago, explains science writer Esther Landhuis.
Since many large pharma organizations have downsized, and other smaller biopharma companies have sprung up, CROs have provided personnel to perform the work. “Nearly anything that a pharmaceutical, biotechnology or medical-device business needs to do — from designing assays to planning and running clinical trials — can and may be outsourced to CROs,” Landhuis writes.
Big Pharma’s Gift to Small Pharma
The 1980s was a thriving decade for big pharma and its outsourcing practices developed and honed in the 1990s were a boon for smaller pharma companies. By the 2000s, small pharma was able to outsource due to the sheer growth in the number of vendors in the market, says PDC Pharma Strategy CEO Penelope Przekop.
The relationship between sponsor and vendor has also led to increased focus on good clinical practice (GCP) quality systems, she adds.
Quality Systems Remain Key
For outsourcing to work effectively, CROs need to operate according to the stringent quality systems of the sponsor organizations that hired them. Not only is this a necessity for compliance with FDA regulations, but it’s best practice too, according to ProPharma Group.
Indeed, the stronger the sponsor’s GCPs the more efficient CROs will be in progressing the trial through its various stages. The quality system should include an agreement between sponsor and CRO defining the responsibilities of both parties.
One of the major complaints for many trials is patient recruitment and retention. Consequently, sponsors and trial staff do their best to relieve patients of any stress associated with the study. Increasingly, sponsors have partnered with third-party organizations to help them deliver a better patient experience.
Transportation is a good example, says Melissa Fassbender, who was the U.S. editor of Outsourcing-Pharma.com for four years. In the article, she refers to a National Institutes of Health study citing that researchers struggled to enroll patients from minority groups because of travel difficulties. Learning from this, some pharma companies have partnered with services such as Lyft and Uber to transport patients to and from trial sites.
Considering that 75 to 80 percent of biopharmaceutical research and development costs were outsourced in 2022, the role of CROs in R&D is expected to keep growing, according to a report by Polaris Market Research.
The role includes becoming acquainted with each company’s culture and processes to build trust and respect. Certainly sharing a vision and goals will foster positive relationships, and co-authoring risk assessment plans and jointly determining KPIs allows each party to know what is expected of them and how certain achievements will be measured and appraised.
Sponsors and CRO staff should create an atmosphere in which they act as a single unit functioning together and collaborating on aspects such as protocol design, monitoring strategies, and data management.
Current Outsourcing Strategies
Developing the best type of outsourcing partnership depends on the needs of the sponsor organization. However, most partnerships fall under one of two dominant types, explains regulatory affairs professional Mo Dezfuli. These are a preferred provider alliance or a strategic alliance.
In a provider alliance, the contractor and provider agree that the latter will perform certain tasks and the former will pay a fixed fee and be solely responsible for drug development.
The strategic alliance is more collaborative as the term suggests and will have the sponsor place greater reliance on the expertise of the CRO. A greater number of complex tasks will be performed by the CRO, and both parties will share collective business goals.
It’s worth noting that sponsors can get the partnership wrong. Dezfuli says common complaints from CROs include frustration over inadequate communication from sponsors, ill-defined processes, being micromanaged, and being left out of the early planning phases. Of course, outsourcing is a mutual agreement and sponsors can suffer from errors made by the CROs. Not adhering to timelines or failing to maintain quality standards are issues sponsors sometimes have to face.
Do Not Duplicate Efforts
A mistake some pharma companies make, especially in their first outsourced project, is not using the CRO partner to its full capabilities. The default is to use the CRO to supplement the pharma company’s personnel power, write Leona Fitzgerald and Denise Moody at Contract Pharma.
The result is a duplication of activities that usually increases the pharma company’s bill. The authors advise sponsors to avoid duplication by ensuring the operational team is aware of the big picture as well as any changes that arise. Of course, a change management plan is key and it needs to be clearly communicated.
It’s also important to be aware that CROs have the expertise required, and sponsor companies should trust in them and use them effectively.
The Appeal of Emerging Markets
The state of outsourcing is as strong as it is because many pharma companies are wholly reliant on the services of CROs. In-house trials are simply too expensive for many companies, especially with high costs in the U.S. and Western Europe, explains Julia Sardaryan, director of corporate development at CRO Smooth Drug Development.
Developed markets carry serious cost and efficiency burdens as well as the unpredictability of substances being banned from the market. Saving time and money are the key motivations behind outsourcing, and these savings can often be found in emerging markets.
Consider Eastern Europe, Sardaryan writes. The region offers lower investigator grants, cheaper procedures, and favorable exchange rates, among other benefits.
As with any partnership, clear communication, mutually aligned goals, and a strong working relationship are essential. Both sponsor and CRO need to know their value and their place in the relationship. CROs can bring more value to this relationship with the help of a strong set of eClinical solutions to manage their clinical research. Anju’s partner program provides CROs with the best value partnership by reducing risks associated with running clinical trials.
Updated 3/28/23; originally published 6/11/19
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