Recent focus on cost containment and headcount reduction within biopharmaceutical companies has led to significant restructuring in clinical trial management. Today we are seeing new approaches in the packaging and distribution support — services that collectively represent clinical supply chain management. Biopharmaceutical companies are now partnering with service providers, but these partnerships need to be carefully developed and managed to actually increase supply chain efficiency.

Lis et al. highlight the challenges in global supply chain management, noting that the success of an entire study may depend upon the selection of a service provider.¹ Hager discusses the role of cold chain management in supply chain processes, emphasizing that “selecting a clinical trial supply chain partner is a complex, strategic proposition.”² Key criteria to understanding the capabilities of a clinical supply provider are overall experience, including specific, relevant expertise, adequate capacity and a global infrastructure that can manage supplies for study sites.¹ Supply chain professionals are increasingly seeking full-service partnerships across a range of functions. The tasks of identifying and evaluating appropriate partners and establishing relationships are indeed complex, but added to these challenges are globally distributing temperature sensitive materials that require superior logistics and project management.² Poorly-planned or poorly-managed activities, anywhere in the supply chain, can lead to harmful consequences.

Within the past five years, many biopharma companies have moved on a continuum from transactional sponsor-CRO relationships to partnership-based relationships. Tufts CSDD research indicates that companies look to outside providers to better leverage their internal resources while gaining external expertise and increased efficiency.³ Schultz discusses that successful partnerships share some key elements, including governance, meaningful metrics and open communication. These partnerships also must have integrated technology into their infrastructure and established management processes that include best practices and procedures that are typically overseen by governance structures.⁴

Various new approaches to clinical outsourcing can be seen in partnerships and alliances among biopharma companies and CROs. Many of these partnerships represent strategies or solutions to cost and R&D issues.⁵ Some biopharma partnerships may even involve types of risk sharing, including operational or compound risk-sharing.⁶ A number of recent sponsor-CRO partnerships have already been established including Eli Lilly with Covance and Merck with PPD. Brooks notes that “sponsors are leveraging CROs’ broad expertise and capabilities and CROs are taking on more comprehensive pieces of the development process, along with more responsibility.”⁵ This approach can more recently be seen within clinical supply partnerships that are now being formed.

To gain additional insight into clinical supply chain outsourcing approaches and trends and how it may relate to the changes seen in the CRO market, Tufts CSDD conducted a global clinical supply management study and developed a case study of the partnership between Lilly and Fisher Clinical Services. The global clinical supply market study explored key company trends across a range of areas and was supported by an unrestricted grant from Fisher Clinical Services. As part of the study, Tufts conducted a survey of experienced clinical supply professionals and held a roundtable discussion to further understand current and future approaches to supply chain management. The survey and roundtable results explored clinical supply outsourcing, focusing on organizational strategies and practices. Additionally, Tufts CSDD spoke with a representative from Eli Lilly and Company to understand the challenges involved in establishing and maintaining clinical supply outsourcing partnerships.

Clinical Supply Study of Outsourcing Trends

Roundtable participants noted that there is currently more partnering occurring within their clinical supply functions, including partnering with clinical operations, CROs, distributors, and suppliers. Accordingly, survey respondents’ company priorities for 2011 included forming provider partnerships. The majority of survey respondents indicated that they outsource individual services for each trial. Many of the service providers now offer supply chain solutions rather than simply one or two activities such as packaging and labeling. Participants in the roundtable also noted that vendors are now willing to take on more risk.

The majority of clinical supply professionals surveyed reported a mix of outsourcing approaches including both functional and tactical or study-specific approaches (Table 1). In considering specific activities that are most commonly outsourced, respondents identified kit destruction, distribution, and returns. Respondents noted that cold chain logistics, labeling and packaging were less frequently outsourced.
 

Survey respondents noted that their preferences for a fully outsourced clinical supply chain solution included preferred pricing (28%) or fee for service (28%) models. Fewer respondents indicated that they preferred risk sharing (22%) although this model is being used more as partnership models between biopharma companies and providers evolve.

Survey respondents also noted that some service agreements with providers include monitoring regulatory activities. Managers indicated that providers most frequently oversee staying current on local import regulations and local logistics as they maintain expertise in this area (Table 2). A critical issue in maintaining the global supply chain is managing the local regulatory aspects, especially tracking changes that occur on a country-by-country basis. Survey respondents indicated that responsibilities that were handled internally were keeping up-to-date on regulatory requirements (outside of import regulations), the importer of record (IOR), and country-specific labeling.

Lilly – Fisher Clinical Services Partnership

In 2010, Eli Lilly and Co. and Fisher Clinical Services (FCS) announced a strategic partnership as part of Eli Lilly’s FIPNet (Fully Integrated Pharmaceutical Network) strategy.⁷ In this five-year agreement, Fisher Clinical Services will oversee Eli Lilly’s in-house CTM manufacturing packaging, and labeling and all distribution of CTM in North America.⁷ The CTM facility comprises 15,000 to 20,000 clinical trial shipments over a year.⁷ The partnership is based on Lilly’s longer-term outsourcing relationship with Fisher Clinical Services and has gradually evolved into a more strategic relationship.

Tufts CSDD researchers spoke with Janelle Sabo, senior director of Global Clinical Trial Materials Services at Eli Lilly, who explained why the partnership with Fisher Clinical Services was established. She cited three major reasons: “to achieve a robust portfolio, to access capabilities externally rather than building them in-house, and to establish a broader network for packaging and distribution.” She noted that Eli Lilly sought a strategic partner in FCS and found a strong cultural fit, but given that “there is no roadmap,” there would also be challenges. In addition, there were no partnerships that currently existed within the industry that could be used as a model. Although many companies outsourced portions of their supply chain activities, there was no collaboration between a biopharma company and supply chain provider that existed which could be replicated.

One challenge that both companies would encounter was in building the technology infrastructure needed for this integration. With FCS having a dedicated site on the Lilly campus in Indianapolis, IN, the close proximity of the two organizations enhanced the integration process. FCS linked local operations with their global systems through IT infrastructure and through this use of their own platform promoted more effective collaboration. This type of collaboration required a commitment to a joined technology infrastructure that would facilitate communication and alignment with standard operating practices.

Also of critical importance was moving away from a traditional vendor approach to a “leadership engagement,” according to Ms. Sabo. This approach would involve establishing a governance structure and integrating that structure into their organization. Ms. Sabo noted, “the governance structure is essential for us,” and has increased their global capabilities. Through this partnership, they have gained access to an extensive network, allowing an increased capacity and global reach.

Metrics

Another key element of an effective partnership is establishing meaningful metrics. Clinical supply professionals in the Tufts CSDD survey reported on metrics used to gauge the quality and success of their partnerships. In rating the components of a premium outsourced clinical supply chain solution, on-time delivery of drug to the site was ranked first, followed by consistent performance, zero risk tolerance and cost-effectiveness. 

Respondents indicated that they measure quality in a relationship with a clinical supply vendor through the following traits: issue resolution (34%), consistent performance (30%), provider responsiveness (25%), and superior service (11%).

Managers noted that on-time delivery of drug to the site was of critical importance in measuring success of a provider solution (37%). Also, respondents reported that other elements comprising a successful partnership include consistent performance (29%) cost-effectiveness (20%), time to re-supply (14%) and zero risk tolerance (8%). 

Technology

Roundtable participants noted that many service providers offer more sophisticated technology when compared to the technology available within their internal organizations. In addition, there has been less willingness by organizations to make investments in technology, due to cost constraints. Other challenges include the existence of legacy systems and incompatibility with newer technologies. Many providers offer interactive response technology (IRT) including interactive voice and web response systems (IVRS/IWRS) as well as web-based portals, supply chain modeling, and forecasting applications. Clinical supply professionals looking to improve the quality and efficiency of their supply chains are adopting new technologies and software beyond IRT. 

The process has been gradual, however, as many continue to use manual or Excel-based methods alongside new technology, according to respondents in the Tufts CSDD clinical supply survey.

Provider Selection and Management

Provider selection and management also pose challenges for clinical supply professionals and ideally strong partnerships are considered the approach that best facilitates successful provider management. Many clinical supply professionals are faced with managing multiple vendors and developing SOPs, as well as keeping metrics to evaluate provider success. There are additional challenges in defining vendor selection criteria and in managing numerous vendors. Added to these challenges is the coordination and management of multiple CROs in clinical operations and clinical supply providers. In order to operate efficiently, internal and external partnerships need to be integrated into an organization’s clinical operations. With the current pressure on resources within organizations, the need for partnerships to be successful and to work effectively becomes even more critical.

Further Study

As a next step in the clinical supply market study, Tufts CSDD has convened a working group of 20 companies to examine challenges and potential solutions in comparator and co-therapy sourcing. The working group will collaborate on industry best practices and strategies and develop further insights into these issues through additional research. 

References

1. Lis, D. Gourley, P. Wilson, and M. Page. “Global Supply Chain Management,” Applied Clinical Trials, June 2009, 58-62.
2. Hager R. “Holistic Approach.” International Clinical Trials, SamedanLtd Pharmaceutical Publishers Spring 2011, www.samedanltd.com/magazine/13/issue/153/article/2956.
3. Getz, K. Zuckerman R. “Effective Collaborations with CROs: Identifying Agile and Robust Partnership Strategies,” March/April 2009, 10(2), 30-35.
4. Schultz J. “What to Examine in the Strategic Partnership,” April 1, 2010, Applied Clinical Trials Online.
5. Brooks K. “CRO Industry Update Leveraging Expertise for Innovation,” Contract Pharma, May 2011.
6. Dietlin, T. “More Than Money.” European Pharmaceutical Contractor, SamedanLtd Pharmaceutical Publishers Autumn 2010, www.samedanltd.com/magazine/11/issue/139/article/2745
7. Roth G. “Newsmakers: Lilly & Fisher Clinical Services: Clinical materials alliance advances Lilly’s FIPNet strategy,” Contract Pharma. May 2010.

Mary Jo Lamberti, Ph.D. is senior project manager, Tufts Center for the Study of Drug Development (CSDD), Tufts University School of Medicine, Boston, MA. She can be reached at Mary_Jo.Lamberti@tufts.edu. Mary Costello is global director, Strategic Marketing, Fisher Clinical Services, Center Valley, PA. She can be reached at mary.costello@thermofisher.com. 

Kenneth Getz, MBA, is senior research fellow, Tufts CSDD. He can be reached at kenneth.getz@tufts.edu.