In 2017, the Tufts Center for the Study of Drug Development (Tufts CSDD) estimates that contract research services overtook all other areas as the single largest category of R&D spending. Pharmaceutical and biotechnology reliance on outsourcing is high and increasing as companies continue to seek lower fixed cost operating models while leveraging externally-sourced global capacity and expertise.
Full service outsourcing is the most prevalent model used with functional service a distant second. Despite the outsourcing model introduced and adopted by sponsor companies during the past two decades, drug development operating performance has not improved. Overall, drug development failure rates are higher than they were in the mid-1990s; development cycle times are longer; patient recruitment and retention rates are lower; and drug development costs have continued to escalate.
Anecdotally, sponsor and CRO executives frequently point to the lack of trust and poor communication as the major factors challenging sponsor-CRO collaborative effectiveness. Recent research conducted by Tufts CSDD suggests that there are more tangible and practical executional areas contributing to inefficiencies and ineffectiveness.
The results suggest that pharmaceutical companies aren’t fully invested in their external collaborations and that CROs remain vendors, not partners. Outsourcing practices implemented by sponsor companies lack discipline and ultimately compromise the ability of collaborations to deliver on their objectives and promises. Sponsors inconsistently use a variety of approaches and models that produce internal friction and uncertainty.
Practical insights from Tufts CSDD research highlight two core areas that would better leverage sponsor-CRO collaborations: Accommodation of CRO input into development planning and protocol design; and more consistent and disciplined implementation of collaborative relationships.
CRO Input into Planning and Design
In past studies, Tufts CSDD found that more than 80 percent of CRO companies report that sponsors rarely if ever accommodate CRO suggestions to improve protocol design executional feasibility. CROs also report that key measures to monitor and reward their performance are intimately tied to the executional variables dictated by protocol design.
The most frequent key indicators used by sponsors to evaluate CRO performance include enrollment speed (34 percent), data quality (27 percent) study start-up speed (18 percent), and the number of change orders (14 percent) – all areas that are highly associated with protocol design elements. And research has shown that protocol complexity is associated with a higher number of amendments; unplanned, unbudgeted and disruptive changes.
Given the collective expertise of study teams comprised of internal and external members, early collective engagement, related to planning and study design, would contribute to a shared vision, better alignment of effort and incentive around performance goals, and more operationally feasible protocols.
Disconnect Between Strategy and Execution
Despite the best efforts that go into conceptualizing and structuring outsourcing relationships – steps typically handled by more senior management – during execution, these relationships underperform. Past and current Tufts CSDD studies show that in all but rare instances typically involving very small sponsor companies, no CRO partnership is used in the way it was intended. Sponsor companies use a variety of conflicting outsourcing models to support their studies, mixing and matching the use of internal staff with niche and full service providers under various relationship arrangements simultaneously. In many instances, sponsor companies vary the types of outsourcing relationship models used on a study-by-study basis.
There is a complete lack of standardization about how an outsourcing strategy is defined, understood and enforced within organizations. Some strategic partners receive less work than do non-partner CROs. Project teams often give non-partner service providers work that already has been contractually promised to alliance partners. Although there are situations where these approaches may have been justified, most often they reflect reactive or project specific choices made without awareness for, or regard to, the company’s overall outsourcing strategy and tactical intent.
Sponsor companies report that they have difficulty standardizing and enforcing consistent outsourcing approaches for a variety of reasons. Many companies are simply too large and too fragmented. Many clinical teams do not even know what outsourcing relationships are being used to support active and recently completed studies.
Legacy activity underway when new partnerships form also contributes to the problem. Clinical teams typically have established their own relationships with select service providers and resist handing-over existing projects to new partners. Companies going through mergers and acquisitions, in particular, often find themselves forced to allow inconsistent practices across organizational functions to ensure that legacy projects are completed as new approaches are introduced.
Another dynamic that contributes to the inconsistent use of multiple sourcing models includes turnover of key senior staff championing, overseeing and implementing collaboration strategies. Partnerships that have not sufficiently been adopted are prone to fall apart when new executives, who might have different ideas about sourcing models, take charge. And many large sponsor companies that have formed strategic outsourcing relationships still have significant in-house development resources creating internal competition with comparable external resources.
Inconsistent and undisciplined approaches are the enemy of efficiency. They introduce incremental direct and indirect costs required to support customized approaches. In addition, collaborative practice experience and efficiencies are isolated to individual studies and don’t scale across the development portfolio.
Achieving Collaborative Effectiveness
Sponsor companies must fundamentally change their outsourcing execution to capture a higher proportion of expected collaborative value. Introspective assessment of current practices will play an important part in identifying opportunities to drive more consistent outsourcing execution. In-depth open discussions with CRO partners will be equally revealing. Two frameworks may also help drive more consistent, disciplined and focused CRO usage.
The adoption of adaptive designs helps facilitate a shared line of sight into development planning and study design. Adaptive trial designs offer internal teams, supplemented by external staff, the ability to shape and anticipate study design changes through scenario planning and trial simulation prior to finalizing the protocol. Rigorous upfront planning will force partnerships to collectively challenge protocol feasibility at the right time.
A second framework, patient engagement, holds promise in changing the CRO-sponsor relationship in a variety of ways, including shared interactions with patient advocacy groups, health care providers and payers to shape development planning. Robust analysis of patient health information and real world observational data will support better protocol design, investigative site and patient recruitment planning. Additionally, professional and patient feedback on draft protocols will inform improvements in access to clinical trials and participation convenience (e.g. study volunteer assistance services, telemedicine, home care and mobile nursing networks; interactive and wearable technologies).
Sponsor companies are piloting and adopting a variety of patient engagement initiatives. Industry consortia – most notably TransCelerate – are also focusing on new approaches to support patient engagement and clinical study operating efficiency. Many CROs are looking to proactively innovate under a patient centric operating environment. These initiatives must be well coordinated across the clinical research enterprise if they are to produce the desired impact on drug development efficiency and performance.
There is much practical and actionable work to be done to better leverage the value of collaborations. Tufts CSDD research reveals two major opportunity areas that may yield an immediate positive impact: systematically engaging CRO partners to participate in planning and study design; and consistently implementing an outsourcing strategy and tactics across the portfolio.
Given current global drug development operating realities, where performance as measured by success rates, cycle time, and cost is not improving, it’s essential sponsors focus on executional excellence to optimize the value of their CRO collaborations.
Associate Professor, Director of Sponsored Programs