One of the emerging trends in the clinical research industry is the implementation of a model under which individual clinical operations functions are outsourced to multiple firms, rather than outsourcing a complete trial to a single firm.
Called "functional outsourcing," there are a myriad of reasons why a growing number of biopharmaceutical companies are adopting this model, with cost savings and scalability cited most frequently.
For all its benefits, however, functional outsourcing is not without its challenges. For the model to be successful, companies must be aware of the pitfalls, which range from selecting the wrong outsourcing partner to not fully appreciating the impact the relationship between the service provider and the sponsor company can have on internal teams and investigators.
Functional outsourcing is a relatively new model in which certain clinical competencies are outsourced to specialized vendors that are functional experts rather than drug development experts. The most common areas to be outsourced are study monitoring, data management, statistical programming, medical writing and statistics.
When properly implemented, Pharma and Biopharma companies can realize a number of operational benefits from functional outsourcing, including:
- Better quality control. Because project ownership can be brought back in-house, companies will have more control over the quality of monitoring and data review.
- Consistency. Functional outsourcing uses consistent processes and procedures across trials, such as the same technologies and operating procedures.
- Scalability. Because outsourced clinical Resources are functionally aligned, rather than aligned by project, they can work across projects, increasing scalability and allowing resources to be reallocated when necessary.
- Increased resource utilization. By guaranteeing a constant volume of work, dedicated resources can be applied, resulting in economies of scale in training and implementation.
- Increased employee retention, which leads to improved efficiency, consistent quality, highly predictable results and continuous improvement.
- An ongoing pool of dedicated resources, which allows for more flexible work assignments and resources that can be reallocated when priorities shift.
Further, functional outsourcing lowers the ratio of internal management to external resources and, when done properly, it is transparent to internal customers (clinical project teams, internal clinical field operations groups, etc.) and investigators. Finally, projects can be launched more quickly when individuals are working across studies because new teams don't need to be trained each time.
There are also several cost benefits to functional outsourcing, including:
- Increased efficiencies because outsourced clinical resources work across projects.
- The ability to negotiate better pay rates because sponsor companies are hiring dedicated resources that are working 100% across multiple projects.
- Reduced or eliminated duplication of efforts because one outsourced professional can manage multiple sites/studies.
- Elimination of business development costs because everyone is hired under a single master service agreement.
- Reduced training costs because it is not necessary to staff up for each new project.
As stated previously, however, functional outsourcing is not without its challenges, many of which are caused by perceptions that exist about the outsourced clinical resources by the internal clinical teams. For example, clinical teams may worry that training outsourced monitors will be an additional drain on resources. One solution to this issue is to have the outsourcing partner take responsibility for all standard operating procedure and technology training so clinical teams need only to conduct workshops specific to their protocol. Utilizing technology such as web broadcasts and pre-recorded sessions available on web portals can further streamline training and reduce the internal resource requirements.
Another common challenge is the perception by clinical teams that outsourced monitors cannot be considered "protocol experts" because they are not dedicated to one protocol. This concern should be eliminated once the outsourced monitors demonstrate their abilities through the provision of high quality of service.
For those clinical teams accustomed to "owning" their team, another issue may be the desire to assign work directly to the outsourced professionals. But because outsourced resources are responsible for several protocols and service multiple clinical teams, this is not feasible. The best solution is often to assign an outsourced resource manager to work closely with the clinical teams to assign work, manage priorities and disseminate information.
One of the more complicated issues to resolve comes when clinical teams want to continue customizing their operational processes, such as monitoring report content, extent of study tracking and technology platforms. A functional outsourcing model requires a high level of standardization because outsourced professionals work across multiple protocols. In many cases, the only solution is to get senior management involved with enforcement.
Not all the obstacles come from the clinical teams. Technology can be a problem if the sponsor company is not equipped to handle remote employees requiring connectivity. The solution to this is often the implementation of advances such as virtual private networks and broadband access.
Finally, communication can be problematic in the early stages, particularly if the sponsor company does not have experience with the functional outsourcing model. One solution is establishing procedures in which outsourced research managers work closely with the study teams to gather and disseminate information.
When it comes to implementing a successful functional outsourcing program, the first and most critical step is selecting the right outsourcing partners. This requires establishing specific evaluation criteria, including:
- Proven functional expertise: Vendors must demonstrate proven expertise in the area they will service. One way to determine this is to review the firm's client list to ascertain the number, duration and quality of functional outsourcing programs in which they were involved. And never hesitate to check client references.
- High level of attention: Vendors should be able to provide a high level of attention to the client's needs. This is particularly important if functional outsourcing is a new concept, because the client will need a great deal of guidance and advice.
- Disciplined business processes: Disciplined business processes should be in place to recruit, hire, train and retain outsourced professionals to meet the client's scalability needs created by expanding/contracting pipelines.
- Access to experienced clinical professionals: Vendors should be able to provide very experienced clinical professionals who are able to deliver a high level of service to the investigative sites and internal clinical teams.
It's important to keep in mind that, when it comes to functional outsourcing partners, bigger is not always better, nor is "one-stop shopping" always a guarantee of success. Consider the lesson learned by one Biopharma company that wanted vendors capable of handling multiple non-core functions and willing to locate an office in or near the company's research center. Following a careful search, they entered into agreements with a large, full-service CRO to handle monitoring, biostatistics and medical writing and a smaller CRO to handle clinical data management.
While the relationship with the smaller CRO flourished, the large CRO had difficulty relocating a portion of its business and struggled to recruit and hire experienced clinical professionals. The sponsor company also felt it was not getting the level of attention it needed, in part because their account was a small portion of the CRO's overall business.
The answer in this case was to focus on building relationships with smaller, more specialized vendors that were functional experts and were:
- Capable of forecasting work and resource requirements
- Able to quickly assemble teams of highly qualified people to meet the needs of the client's rapidly expanding pipeline
- Able to reallocate resources quickly when clinical development priorities changed.
Finally, never underestimate the importance of finding vendors with similar corporate values. A good fit with the sponsor company's culture can make or break an outsourcing relationship. Other qualities to look for include:
- A willingness to partner rather than dictate terms
- The ability to act in a consultative fashion
- The ability to make a long-term commitment
- The ability to establish clear lines of communication
- Strong leadership
- Financial viability
After selecting the outsourcing partners, the next step is to establish the goals for the relationship. Unlike typical outsourcing relationships, goals in functional outsourcing should be established after the outsourcing partner is selected, because achieving is a shared responsibility between the client and vendors. Typically, there are four primary goals:
- Improve the quality of monitoring, site relationships and service to client clinical teams. Don't hesitate to set the bar very high, for example by requiring more than five years of monitoring experience and significant therapeutic area expertise from outsourced professionals.
- Provide more flexible resource capacity management, such as requiring outsourced professionals to work on several protocols and across multiple therapeutic areas so that resources can be readily reallocated if clinical development priorities change.
- Vendor management of outsourced professionals, which overcomes co-employment issues as well as any lack of specific expertise in managing remote personnel on the client's part.
- Decrease costs, which can be accomplished through careful, geographically based selections of outsourced resources based on study site distribution.
A good illustration of a successful functional outsourcing relationship is the program implemented by a leading global biopharmaceutical company that develops, manufactures and markets human therapeutics based on advances in cellular and molecular biology.
| When properly implemented, a functional outsourcing strategy can quickly return significant results. In [this] case... expenses associated with each monitoring visit dropped to 20% of the cost... primarily due to decreased travel costs and improved travel efficiency |
While outsourcing was not a new concept for the company, its strategy had, over time, become a system that allowed clinical teams to adopt their own policies regarding outsourcing. While that approach resolved control issues between the clinical teams and vendors, it was highly problematic due to the difficulties of managing multiple vendors with multiple strategies.
When new management entered the picture, the decision was made to adopt a more strategic outsourcing approach. The new team determined the best use of resources would be to outsource non-core competencies, while assigning internal resources to all core competencies.
The company first identified its specific needs from a functional outsourcing relationship. These included:
- Increased resource utilization. By guaranteeing a constant volume of work, dedicated resources could be applied, resulting in economies of scale in training and implementation.
- Increased employee retention, which leads to improved efficiency, consistent quality, highly predictable results and continuous improvement.
- An ongoing pool of dedicated resources, which allows for more flexible work assignments and resources that can be reallocated when priorities shift.
- Elimination of co-employment issues.
Following the criteria cited above, the company selected its outsourcing partners and, working together with those partners, established the goals of the relationship. Interestingly enough, decreasing costs was not among the primary goals identified in this case. Instead, the goals dealt only with quality and speed because the company felt that simultaneous improvement in all three areas was an unrealistic expectation.
Due to the magnitude of the changes being proposed, implementation started with a small pilot program consisting of just three outsourced monitors in Miami, Houston and New York | areas with a high number of investigative sites that were very time-consuming for the sponsor company to conduct on-site monitoring. The three outsourced monitors initially worked on three protocols in three different therapeutic areas.
This small-scale approach was less intimidating for the internal clinical teams, who felt they were being asked to give up some of the control over the investigative sites. It also provided early proof that the outsourced monitors could work effectively on multiple protocols in multiple therapeutic areas. Other benefits that emerged from the pilot program included:
- Increased acceptance by study managers, who found that the level of service provided by the outsourced monitors was high quality.
- Direct comparisons of new processes to existing methods. By strategically assigning sites to the outsourced monitors for studies where other sites were being monitored by internal CRAs, side-by-side comparisons could be conducted | something that could not have been done had an entire study been outsourced.
- The establishment and tracking of performance metrics from the outset, which helped document proof of concept. Indicators of monitoring productivity were tracked early on, revealing that the number of sites and the number of patients monitored per CRA began to increase, demonstrating improved efficiencies.
- Close tracking of costs, which quickly showed that the cost of a monitoring visit dropped dramatically.
In addition to demonstrating the potential of the functional outsourcing model, the pilot program also helped identify the challenges, particularly in terms of the clinical teams' acceptance of the new model. It was much more efficient to identify and implement solutions to challenges presented on the smaller-scale project, then extrapolate them to the full-scale program.
The pilot and its early successes led to rapid growth of the functional outsourcing relationship. Within a year, the number of outsourced professionals grew from three to 26; two years later the number hit 45.
Today, the relationship is entering its fifth year and continues to be characterized by a well-integrated mix of permanent employees and outsourced resources. The goals were realized faster than expected and there is now greater standardization of clinical processes, higher quality investigative site relationships and improved communications.
When properly implemented, a functional outsourcing strategy can quickly return significant results. In the case cited above, expenses associated with each monitoring visit dropped to 20% of the cost prior to implementation of the model, primarily due to decreased travel costs and improved travel efficiency. The sponsor company also realized a 25% reduction in their planned outsourcing budgets.
The key to success of any functional outsourcing relationship is the high degree of joint ownership between the vendor and the client company. Management teams must work together to define and design the program, define the management structure and co-create policies and procedures. By working together to overcome resistance to change, the end result will be a mutually beneficial relationship built on trust.
Kim Oliver is director of clinical operations for Kforce Clinical Research Staffing, a division of Kforce Inc.
She can be reached at koliver@kforce.com.
