Wow! I just realized that I have been writing this column for six years! I’d like to thank the folks at Contract Pharma for the opportunity. I’d also like to thank you, the readers, for your continued interest and your feedback. I have received e-mail messages from readers around the world.

There are now encouraging signs that pharma and biopharma R&D spending is improving. While it is too soon to declare that outsourcing activities have normalized after two years of slow customer demand, there is evidence of improvement in the preclinical CRO industry as well. Because outsourcing activity seems to be improving, I thought it would be a good idea to revisit some of my past articles for a few reminders on how to ensure a successful preclinical outsourcing experience.

From How to be a Better Sponsor – March 2006

. . . Understand the Impact of Your Actions

Yes, you are the sponsor (i.e., the customer) and you are paying the CRO to provide a service. When we think of other customer-provider relationships (restaurants, grocery, department stores), the phrase, “the customer is always right” may come to mind. Some sponsors may even go a step further by addressing CRO representatives with great bravado by saying things like, “I hold you personally responsible for the success of this study,” or, “The future of our entire company is dependent on this study.” When I worked at Eli Lilly, my favorite declaration to the CRO staff was, “I want to feel like I am your only customer.” Most who heard this phrase at that time were very polite to my face but, having interacted with these same individuals as a consultant, they still have a good laugh about it to this day. The fact is, I wasn’t their only customer. When sponsors make comments like these, their motivation is based in their need to feel in control of the outsourcing activity that they have entrusted to the CRO. The sponsor is the customer and ultimately owns all decisions, but many times their ill-advised actions can waste thousands of dollars or jeopardize the quality of the study. Instead of insisting on what the CRO should do, sponsors should reassess how they can be better partners with the CRO. Sponsors who enjoy good business relationships with CROs often minimize these complications. Consider these examples:

Changes to the design of the study

As a sponsor, you have every right to have the study designed as you wish. Unfortunately, sponsors will often make design changes immediately prior to the start of the study. Most times, this is a classic example of failure to prepare appropriately.

• Potential impact on quality

Last-minute study design changes need to be documented and communicated to CRO staff. Your changes increase the potential for regulatory (timely documentation) or procedural errors. CROs do have change control processes but they require sufficient time to appropriately convey the changes. When a sponsor makes so many changes to a study design, the CRO staff can become confused as to which version of the actually represents the final study design.

• Potential for increasing sponsor costs

If a significant procedural error occurs due to a last-minute design change, delays resulting from having to repeat a study will impact the project timeline and could adversely impact a company’s marketing advantage. While the CRO owns the responsibility for the error, good sponsors will determine whether their own actions (or lack thereof) contributed to this event. Especially in larger sponsor companies, study designs are often the responsibility of scientists, while the relationship with the CRO is often managed by an outsourcing professional. Scientists may not be aware of the financial impact of study design changes. CROs charge for time, space, and all of the overhead that goes into conducting your study. Want to add an additional dose group to a study? The CRO will charge you for it. Keep in mind that the larger the study, the more likely that it will require additional room space. Want to add a blood collection time point? The CRO will charge you for it. If your new blood collection time falls in the middle of the night, you will be paying the overtime costs for the CRO to accommodate that request. Pharma and biopharma companies incur these same costs for studies conducted in their own facilities, but fail to appreciate the cost of these research activities. Proactive communication with the sponsor’s internal outsourcing professionals and with the CRO staff can help to alleviate these situations.

Changes to the study start dates

Sponsors may need to change the start date of a study at a CRO for a variety of reasons. To a CRO with the current demand for outsourcing, your study is occupying prime revenue-generating space in their facility. Furthermore, if you delay your study immediately prior to the start date, understand that the CRO has already expended time and resources for study preparation.

• Potential impact on quality

Delays to the start of a study after the CRO has already begun to collect pre-study data will require significant documentation. Once the study plan is altered, the probability for errors increases. This is a critical time when the sponsor and the CRO need to work closely together to assure that all documentation is in order and that they are aligned on a revised study schedule.

• Potential for increasing sponsor costs

With the great demand for outsourcing, CROs will likely charge a sponsor for delaying a study. A delay is lost revenue for a CRO. Whether or not your CRO elects to charge you for a delayed study will depend on the extent of the delay and the quality of your relationship with the CRO. If you have a study ongoing at a CRO and you decide to cancel (stop) the study, be prepared to pay a cancellation fee. The CRO needs to cover its costs for the time and resources that were committed to that study. Some sponsors are surprised and sometimes even angry that a CRO will charge delay and cancellation fees. This reaction generally arises from the lack of understanding of what it costs to run a research facility. Few Pharma and Biopharma research facilities are managed with the financial rigor/oversight seen at CROs. Ironically, the sponsor company facilities incur the same costs as a CRO but this is less apparent due to cultural differences. Whether it is at a CRO or a sponsor’s own facilities, research staff and study rooms cost money just by existing, regardless of their level of activity. This is critical concept that is lost on many sponsors.

Budgetary Decisions that are not Aligned with Outsourcing Strategies

Increased competition, pricing pressures, and research spending are among the factors that cause pharma and biopharma companies to scrutinize their spending. Through many of the examples above, we have shown how some business practices can actually increase outsourcing costs. If you understand the business, preclinical outsourcing can be a cost-effective strategy when compared to a sponsor’s internal research costs. However, companies will often unilaterally implement cost saving guidelines without understanding the potential business ramifications. Here are a few examples:

• Business travel restrictions

When companies implement budget-cutting exercises, spending for business travel is among the first items to be reduced. This is understandable because effective belt-tightening initiatives may diminish the need for layoffs. The downside is that these initiatives often originate from areas in the company that don’t comprehend the business need to visit outsourcing providers. The FDA expects sponsors to demonstrate their familiarity with pertinent details during the conduct of studies at a CRO. Sponsors often address this expectation through study monitoring, which entails an on-site visit at the CRO. Sponsors review raw data, observe study activities and receive updates from study personnel. Beyond FDA expectations, study monitoring is a good business practice by providing oversight of study activities. When a sponsor’s company implements unilateral travel restrictions, study monitoring visits can be reduced or eliminated. This quest for savings has now altered a vital process that was designed to address regulatory expectations and assure quality. A cost-effective alternative for sponsors who encounter this dilemma is to engage contract study monitors who can fulfill this business need on their behalf.

• Changing providers

Every sponsor should expect good service and performance from their CRO provider. If a sponsor’s expectations are not met, it should determine if another CRO can do a better job. Changing CRO providers for performance reasons is a smart business practice. Changing CRO providers because the sponsor is mandated to accept the lowest study bid may seem to be a good financial practice but it may not always be the best outsourcing decision. Remember, sponsor-CRO business relationships are critical to a successful outsourcing experience. You won’t achieve the quality of this relationship if your provider selection decision is solely based on identifying the lowest CRO bid. In fact, that is probably the worst criteria for a provider selection. Accepting the lowest CRO bid does not always result in a satisfactory outsourcing experience. Sponsors who are faced with these mandates need to educate their finance colleagues about outsourcing and risk mitigation. After assessing scientific and performance criteria, consultants will often request bids from three different CROs. Studies are generally awarded to the CRO that submitted the bid that falls between the low and high bids.

From Working with Study Directors – July 2009

Study Director Challenges and What Sponsors Can Do To Alleviate Them

Let the CRO know what your expectations are regarding communication, both frequency and mode. Some folks prefer e-mail and never answer their phone, while others prefer talking on the phone, so let your CRO know what works for you. Let them know what you want in your protocol, your general expectations on treating animals if they have a non-test article related health issue, and if you have special reporting requirement. This should be done upfront, rather than after a problem arises. If you as a sponsor don’t like what you are seeing, let the study director know so that it can be changed. Open communication between the study director and the study monitor, in both directions, is critical.

Share information regarding findings from previous studies.

Provide information on therapeutic class and indication.

Provide timely delivery of all vehicle and test articles prior to study initiation and provide for any further deliveries of additional material in a timely manner.

Provide timely delivery of all required test article information, such as Certificate of Analysis, stability and homogeneity documentation, MSDS, and expiration or retest dates.

Provide storage requirements for all materials prior to shipping so the CRO can be prepared to meet these requirements.

If you don’t have a formulation, you don’t have a study. Scaling your formulation up from discovery to a large toxicology study may not be as straightforward as you think. Test articles can and frequently do perform differently when formulated in large batches. Make sure you have sufficient time prior to starting a study to do the prestudy formulation and analytical work, so you aren’t surprised on Day 1 of a study.

Make sure that the analytical and bioanalytical methods are validated prior to starting your study. If the methods aren’t validated prior to study initiation, and you run into issues, you then have stability issues to contend with as well. Different matrices can act differently, and study validity is questionable if the exposure can’t be determined. With the complex molecules/formulations we are working with today, this is becoming more and more of an issue.

Let the CRO determine the appropriate wording in the protocol to ensure that the technical staff completely understands what needs to be done. Every institution has its own language, so when a sponsor insists on using its own wording in a protocol, it has to be interpreted for every technician who is working on the study. This leads to errors being made on a study.

Approve and sign the study protocol in a timely manner and certainly before animal receipt. Ensure that the protocol accurately reflects the intended study design, to avoid last-minute changes that can lead to study deviations.

Approve and sign all protocol amendments in a timely manner and understand that sponsor-directed changes in the original study design can lead to increased costs and timeline changes.

Respond to all Study Director inquiries in a consistent and timely manner as you would expect them to respond to your inquiries.

Communicate your expectations of the type of frequency of study updates (including data receipt) with the Study Director prior to study initiation.

Be flexible in your technical expectations. The CRO strives to be an extension of your facility, but it cannot duplicate it. Most technical procedures can be conducted successfully and with high quality in several different ways, so let the technical staff at the CRO do it the way they were trained and know best.

If the sponsor has some study aspects being conducted in-house or at a third-party facility, ensure delivery of these reports to the Study Director in a timely manner. This remains a significant issue for the CRO in meeting report timelines.

Recognize time zone differences: a west coast sponsor calling an east coast CRO at 3:00 PM PST will make it very difficult if not impossible for a change to be made immediately on the same day.

Document a backup decision-maker for the Study Director to contact if the primary contact will be out of the office, and/or always provide the cell phone number of the primary contact.

Have a clear agenda of what you want to accomplish when visiting the CRO to monitor a study and provide this information to the Study Director at least several days prior to the visit so that your agenda can be accomplished.

Remember that a study’s success may well depend upon good lines of communications between the sponsor and the CRO, but communication is a two-way street.

Regarding report finalization: if a sponsor knows when it is filing its IND, it is prudent to tell the study director. The study director can help track the date and ensure that the timeline is met. If you are using draft report for the filing, tell the study director, and keep track of the filing date, so that when you get close to the 120-day mark, you have a finalized report to submit to the FDA. Sometimes the finalization and archiving can take some time; the CRO wants to help you but can’t if it isn’t fully informed.

Reports must be finalized, regardless of the status of the test article (progressing through development or dead). The longer it takes to finalize the report, the more work it is to get it finalized. Some sponsors will let a report sit unfinalized at the CRO for (literally) years, because it is no longer a high priority. This puts the CRO in jeopardy of receiving a FDA 483 citation, and it is much more work in the long run to get the report finalized; SOPs may have changed, there are new interpretations to the regulations, critical staff (study director, pathologists, toxicokineticists) may have left the company and the report needs to be reassigned, etc. It may be preferable to finalize the report, and amend it later if changes need to be made.

From CRO Business Development – November 2006

Remember, preclinical outsourcing is a relationship-based business. All of the clever business development ideas, acquisitions, or names of prominent industry veterans are useless if the CRO can’t establish a relationship with sponsors. What sponsors want in a CRO is for someone to look them in the eye, tell them what they can or can’t do, and then stand by their word. For the sponsors out there, you also have a responsibility in this business relationship. . . . Do your homework and accept responsibility for own outsourcing experience!