There are many reasons why a pharmaceutical company chooses a contract research organization (CRO) for drug development. The selection process is complex and based on several important considerations including: CRO experience, budget, availability of resources, and a trusting relationship between the CRO and sponsor.

Outsourcing strategy in the drug development sector is known for its cyclical changes. Companies move between utilizing project-based outsourcing, in-house teams, functional outsourcing, and strategic partnerships in response to the changing global business climate. The requirement to adapt is not unique to trial Sponsors and we should not be surprised that strategic business models need to change as well.

Let’s take a step back and look at the real “end game” of clinical research.

Over the last few years, trends in the sector have pointed to a strategic model in which CROs are chosen for both their expertise as well as their willingness to invest in the development of a drug. Pharmaceutical companies have realized the strategic advantages of “cost-sharing” and sharing the risks and benefits of drug development, and consequently these types of partnerships are formed based on the goal of reaching an economic target.

During the last decade, the academic community has played a larger role in drug discovery and clinical development and has had much to say regarding the “moral obligation” expected from drug development. These types of studies look to “do good,” but often face challenges such as a lack of resources and budget, limits in technology, incomplete understanding of regulatory requirements and trusting partnerships with CROs.

How have strategic partnership models in outsourcing changed to encompass this new moral code? We look at traditional versus evolving strategic partnerships and incorporation of social responsibility.

Recently, the industry has seen a significant consolidation of the CRO industry despite sponsors increasing the proportion of outsourcing spend going to strategic partnerships. The economic crisis of the last decade combined with the rising costs of drug development (estimated at over $1 billion) have caused a transition to reduced budgets and shrinking product pipelines. Couple the economic aspect with complex regulatory and industry requirements, sponsors are facing truly complex clinical research projects as they struggle to meet financial and legal objectives while pleasing all industry stakeholders.

The CROs in turn have their own fiscal objectives and recent deals have seen them write much bigger contracts as they seek to secure meaningful backlog. With volume comes discount, and so margins have come under pressure across the sector. Of equal importance, the CRO has taken on more responsibility in the strategic partnership model ensuring that the sponsors they support are running quality, cost-efficient and ethical trials.

There is certainly a place for the strategic partnership but it must evolve to survive the tough climate in which it operates—both economically and in terms of industry and community expectations.
Drug development is changing as new technologies come to the fore and the move from the blockbuster business model shifts to a more personalized approach to medicine. Patient groups, academic research units, and charitable organizations are all playing an increasingly important role in drug development. The sector is shifting its focus from massive patient populations and high throughput screening programs to more targeted methodologies that can benefit from these stakeholders.

A service provider within a strategic partnership may be required to establish relationships with other players that can help deliver the leaner—and in some cases, more socially responsible—model. For example, by working with a charitable organization, a strong CRO can link the expertise that may reside in this external organization with interested sponsors. There can be a benefit to the CRO in performing pro bono work with patient groups and others to surface viable projects or to provide commercial guidance that can maximize a project’s chance of success. Working in this way also provides the CRO with an opportunity to ‘give back’ in a meaningful way, incorporated into an overall development strategy with the sponsor involved.

Vendors who engage in strategic partnerships need to demonstrate ‘value added’ service to counter the erosion of margin that can come with volume and contract length. They must introduce fresh thinking to uncover new areas of benefit to their customers. CROs have tended to take the lead where there has been the need for exposure to risk to deliver a benefit to the industry as a whole. Where this has happened in the past, the change has predominantly come around the introduction of new technology. Now, the new ideas may need to come in terms of process reengineering and in relationship management.

Social responsibility in action for Wings for Life
Wings for Life is a non-profit organization focused on research for spinal cord injuries.  We worked with them on this new strategic partnership model with positive results.  We used a model of “accessible expertise” by loaning some of our top management and experts to ongoing clinical trials. The head of Biostatistics Consultancy, Thomas Zwingers, with expertise in study design and protocol analysis, helped Wings for Life perform statistical analyses in order to prepare the study data and reports for potential pharmaceutical partners who were looking to take the study to the next phase of development.

To manage the economic aspects of the study, CROS NT’s chairman, Paolo Morelli, supported the company in budget definition and various management aspects.

In addition to the obvious benefits for a non-profit like Wings for Life, CROS NT was able to leave a positive impact in the life sciences community and advance treatment for spinal cord research through its corporate social responsibility efforts. CROS NT invested its time and resources to gain experience and demonstrate to pharmaceutical partners that it has the know-how to follow studies through to post-market.