First of all, learning to “avoid choosing the wrong CRO” is neither science nor an art. There is no right or wrong. Over the years, I have selected many CROs – small to large – using various outsourcing strategies, and I’ve supported many biotech companies in their outsourcing strategy. What I’ve discovered is that choosing the wrong CRO mostly depends on the sponsor, and their outsourcing strategy and oversight.

Outsourcing poses a unique challenge to any organization and the challenges are multi-faceted. Traditionally many companies choose CROs based on:

  • Reputation
  • History of working relationship
  • Cost-effectiveness, price, and affordability
  • Experience with similar products/Investigational products (IPs)
  • Regional knowledge
  • Availability of facilities/services/personnel
  • Location of the CRO

Setting a Viable Strategy

The outsourcing strategy defines when and how an organization will outsource. And here lies the problem of pharmaceutical and (especially) biotech companies. In many cases, companies don’t have a strategy available that determines which activities are outsourced and which activities should be kept in-house. But a clearly defined outsourcing strategy helps the company and the CRO much in outsourcing and performing the service(s).

Outsourcing is often a significant challenge because many department members who are managing CROs grew to that level of responsibility by successfully managing internal personnel and sites directly. In other words, they know how to manage personnel to successfully conduct trials; they do not know how to ensure a CRO is effectively managing its staff to conduct trials successfully. That does not mean experience in managing internal staff and sites aren’t necessary to manage CROs; it simply means this experience is not enough.

In many cases, the companies (i.e. the clinical development department or outsourcing department at larger companies) don’t know when, how and which activities to outsource. In many cases, I have seen the company´s outsourcing department is not prepared for this activity and therefore not prepared for success. The decision is taken very often too late because a draft synopsis or a draft protocol is not available, which gives a CRO a good understanding. As a result, a CRO is chosen that is fast in providing a cost proposal, and crucially they’re cheap – a tell-tale sign of a journey headed in the wrong direction.

The Role of Quality Assurance

What’s more, quality assurance (QA) can play a fundamental role throughout the life cycle of any GxP-related outsourcing partnership, as well as the selection of the wrong CRO. After the screening stage, QA or external qualified audit or should conduct a qualification audit of the pre-selected CRO with the aim of verifying the critical parameters (e.g., quality and compliance etc.). Already at this stage, a back-up CRO should be in mind.

In many cases, because the outsourcing department or manager is under time pressure by senior management, the work is already started under a “letter of intent” (LO). This is without knowing the outcome of a qualification audit of the QA department or (external) auditor. Even if major concerns are raised by the QA department/auditors, the collaboration with a pre-selected CRO is kept because a change would mean a delay in study start. Many managers and senior management don’t consider that going forward with the wrong CRO is much more time consuming and is probably much more expensive.

There are also numerous advantages of a QA audit/review of the contract, although this is not always done. A QA audit of the contract is primarily done to help ensure compliance with the applicable GxP requirements. Additionally, important issues may be identified during the qualification audit that may need to be stated in the contract. For example, a QA review may indicate a need to include a clause/condition in the contract that any qualification issues must be resolved prior to a set date (depending on the criticality and impact). Another important aspect of avoiding the wrong CRO is timelines.


We all know meeting timelines is very important to the success of a critical trial and very important for senior management. Every CRO is going to promise that they will deliver on your aggressive timelines. But how can you ensure this is true? When evaluating CROs for their ability to deliver on-time results, look for a prior track record of proven success in meeting milestones. Your CRO should be one that has consistently delivered milestones on time or ahead of schedule. Another way you can help ensure the CRO will meet timelines is to have certain assurances and even incentives built into the contract.

There can be a monetary bonus to help motivate the CRO to deliver results ahead of time. On the flipside of the coin, if milestones are missed, it could lead to a penalty to be paid back to the sponsor. Thus, by clearly setting expectations ahead of time, both parties will be held accountable to deliver on those milestones.

The final step in selection is negotiation. Some people look forward to doing battle with the service provider, but keep in mind the people you are negotiating with (against) are the very people who will be responsible for your success. This must be a win-win situation. If you get the lowest possible price, good business sense says the difference in price has to come from somewhere. Once you know your first choice, negotiate a final price by telling the selected service provider the contract is theirs to lose. Then work with them as a partner to put together an agreement that serves the best interests of both parties.


Dr. Volker Scherhammer

VS LifeScience Consulting




The views and opinions expressed in this article are those of the author’s and do not necessarily reflect the official policy or position of any agency or pharmaceutical company.