Outsourcing clinical trials, which began in the 1970s, used to be the reserve of 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 clinical trials is to look at the global market for CROs. And according to a 2018 report by Grand View Research, the outlook is promising with a market value more than $34.83 billion and compound annual growth rate of 6.6 percent projected to 2025.
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 three main factors are affecting the clinical trial industry specifically, writes Nick O’Brien at eClinical software provider Medrio. These are globalization, digitalization and personalized medicine.
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, personalized 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 the biotech, medical device, and pharmaceutical consultancy Weinberg Group, a ProPharma Group company.
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.
Examples of Outsourcing Partnerships
Outsourcing is a common practice and it’s effective, which is why the majority of sponsors choose to develop drugs with the help of CROs. To date, many drugs have been developed outside of pharma companies’ laboratories, writes Andrii Buvailo, founder of market and industry research platform Biopharma Trend.
For instance, AstraZeneca in the UK has been partnering more frequently with academic organizations such as Cambridge University to focus on developments. In the US, it partnered with the University of Texas MD Anderson Cancer Center to develop immunotherapies.
Examples of other strategic partnerships include:
- Bristol-Myers Squibb and Allied Minds.
- GlaxoSmithKline and the University of Leicester.
- Actelion Pharmaceuticals and Enamine.
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, US editor of Outsourcing-Pharma.com. 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 percent of clinical trials will be outsourced by 2020, sponsors and their partners need to work well together. There are a few focus areas to make this succeed, notes executive marketing professional Craig Morgan.
These include becoming acquainted with each company’s culture and processes to build trust and respect. Certainly sharing a vision and goals will foster positive relationships as will a co-authored risk assessment plan and jointly determining KPIs is vital as this allows each party to know what is expected of them and how certain achievements will be measured and appraised.
Morgan also advises that teams should create an atmosphere in which the sponsor and CRO staff 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 preferred provider or 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.
However, 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 pair advises 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 US 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. Getting this right will ensure the all parties involved in clinical research will maximize the value presented by a booming outsourcing market.