Vendor Selection and Management from a biotech perspective

2nd December 2016 (Last Updated July 18th, 2018 14:17)

Karina Nymark, Savara Pharma, offers insight on things to consider when selecting a vendor

Vendor Selection and Management from a biotech perspective

In the biotech space, internal resources are often limited – both in terms of time, expertise and finances.

In order to be cost effective, the priority is not to build an entire organization that is capable of handling everything in-house, but to build an organization that has the knowledge to be able to bring in the best vendors in order for the company to gain access to world-class solutions.

In biotech highly qualified collaboration partners that are experts within their field are required. Since they will be the experts, it’s important to build a relationship based on confidence and trust.

Outsourcing Strategy

Before the selection of specific vendors, it’s important to outline the outsourcing strategy. What is the ideal set-up for your company? Consider two strategies:

Project outsourcing – choose a clinical CRO capable of handling the majority of the tasks – like statistics, Data Management, regulatory, Pharmacovigilance, supply and monitoring - further vendors like lab, spirometry and imaging to be handled by the clinical CRO

Or

Partial outsourcing – can some tasks be handled in-house? Can the vendor selection and management of additional vendors be done in-house, to keep control and knowledge in the company?

CRO Strategy

What is the best match for your company?  - Small, midsize or big?

Small to midsize CROs could be preferred in order to get enough attention or due to specific expertise. An important question to evaluate is whether they have the expected capabilities and the expertise for the world-class solutions that your company would like access to.

It’s important to consider whether big CROs will pay enough attention to a small biotech company. In my experience, the interest from the big players offering their assistance on our projects has been huge. The big CROs say approximately 40 percent of their customers are biotech companies – so this might not be a real threat.

The big and important question to evaluate carefully is obviously - where doesthe company get most value for their money?

Vendor Selection - Selecting the right vendor

Selecting the right vendor is critical for a biotech company. The expertise is not available in-house/ or at least you don’t have colleagues with equal experience to discuss with and therefore you are dependent on the expertise within the CRO. When issues arrive you need to be able to seek advice from the CRO and take decisions based on these advices.

In order to select the right vendor, it is very important that a formal selection process is in place. One thing to be aware of is that the selection process takes time and requires resources –and it has to be prioritized.

Request for proposal

A process for request for proposals (RFP) is recommended to include at least three proposals. You need to set the frame in order for all to bid on exactly the same work – otherwise it is impossible to compare the proposals. If you are in doubt whether to include certain parts, it is recommended to include and then deselect afterwards, which is much easier than having to request for the price later on, plus you will have a comparable price. Another decision you will have to consider when sending out your RFPs is whether to create your own template for the proposal or accept the standard template from the vendors. Accepting the template from the specific vendors might give you a bit more work in comparison. On the other hand there is a risk that the vendors will miss some details or make mistakes if you force them to use your own template. Another risk is that the timing slips if vendors have to use your templates, due to the fact that it takes much longer to provide the proposal.

Selection criteria

Decide upfront what is important for your project

1). Experience:

  • Quality track record
  • Does the CRO have offices/experience in all planned countries and are they capable of providing all services themselves, or do they need sub-contractors?

2). Technical capabilities and competence

3). Project management structure

  • Communication skills
  • Location and language
  • Responsiveness

4). Cost

  • Does the proposal include the hidden costs which can be huge, for example, milestone payments, investigator payments, travel costs, shipment, training, and participation in meetings?

5). Timelines – Is the CRO able to accommodate your expectations to the timelines?

6). Flexibility (Keep in mind it is likely that timelines might change due to internal delay of the project)

  • How quick can an urgent requirement or change be implemented?

Bid defense meeting

A bid defense meeting is important for both parties. The vendors get a chance to defend their proposal and there you can determine what is included and what is not.

It is also the opportunity to see if your expectations match and to sense if there are possibilities to establish a relationship. Can you trust the vendor? And would you be able to rely on their advice?

Selection

Once you have decided your chosen partner, the next important step in the process can begin. The project deliverables have to be agreed on and written down in a work order. Be sure to share the responsibilities.

Define the expectations and how you want to work together. Agree on the timelines and how you communicate. Have close contact and regular meetings especially in the start-up phase.

Vendor Management

You have to manage your vendors carefully. The more you get involved – the more you will know about your own project and the better chance you have of discovering if something is not going according to plan. When issues occur keep in mind that you have a shared goal and the main focus should be on finding the best solution – not placing the responsibility, this can be sorted out afterwards – to keep your project moving in the right direction.

The fact that the sponsor always has the overall responsibility of the trial has put more and more focus on sponsor oversight. Trial managers are generally doing a lot of oversight in their daily work – having meetings with vendors and internal team members, checking site status, AE status, looking for trends in protocol deviations, and so forth. It is very important to track these activities, as documentation of the sponsor responsibility is critical. If it is not documented, it did not happen.

Make sure you have a process for sponsor oversight in place including a template for a sponsor oversight plan. Do an oversight plan before the study starts and remember to follow it and update as needed. The sponsor oversight plan could include information on the considerations you have done regarding the level of oversight, you need to identify the vendors to include for oversight – remember you only need oversight of the outsourced activities. Furthermore, an overview of the activities you plan to do as part of your oversight is important (Example of sponsor oversight activities in relation to trial progress can be seen in Table 1). An overview of the documents that are to be prepared including who are reviewing and approving is also recommended.

Tabel 1. Example of Sponsor Oversight Activities related to Trial Progress.