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
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 reen-gineering 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. CP
“Recently, the industry has seen
a significant consolidation of the
CRO industry despite sponsors
increasing the proportion of
outsourcing spend going to