Integrated, strategic alliances hold the promise of contributing to faster and more efficient drug development activity, yet new research from the Tufts Center for the Study of Drug Development (CSDD) finds the promise remains elusive since sponsor companies aren't fully invested in their alliances and continue to use a variety of competing outsourcing models simultaneously without a clear and consistent approach.
Tufts CSDD conducted its most recent study on integrated alliances in the spring and summer of 2014. Nine major and mid-sized pharmaceutical companies – each having had a minimum of three years since implementing one or more integrated alliances — provided data on contract service usage for 43 individual phase II and III clinical studies. For each study, companies indicated whether internal staff or CROs provided functional support and the relationship model used (e.g., transactional, functional service provider, and integrated alliance). Participating companies also provided study performance (e.g., start-up time, cycle time, enrollment rates) and quality data (e.g., queries per thousand clinical data points collected; number of protocol violations; number of change orders) for each individual study to determine if the outsourcing relationship model used had a measurable impact.
The results of the study indicate that sponsor companies are using a variety of outsourcing relationship models to support their studies, mixing and matching the use of internal staff, and utilizing traditional transactional relationships, functional service and integrated alliances simultaneously. Although each sponsor company had entered into one or more integrated alliances at least three years ago, in no instance did a single CRO manage all functional areas supporting an individual phase II or III study. The results also showed that sponsor companies vary the types of outsourcing relationship models that they use inconsistently, on a study-by-study basis.
Despite the investment and effort required to identify, select and integrate their outsourcing relationships, sponsor companies choose to keep all options on the table.
Adoption and integration of a new outsourcing approach that requires collaborative planning, shared governance and operating systems, and that transfers substantial operating risk to a contract services provider, is clearly very difficult. Sponsor companies have a long-established culture of mistrust in vendors and service providers and poor communication. The long-held view that CROs are commodity service providers that must be carefully policed and from which some information cannot be shared, is hard to change. The size and scale of many sponsor organizations also plays a part. Highly fragmented companies, many deeply involved in integrating recent mergers and acquisitions, often must accommodate inconsistent practices across functions to ensure that the demanding workload is completed.
Many sponsor organizations point to the disruptive nature of internal and collaborative partner turnover – a relatively common occurrence – as a contributor to relationship inefficiency and failure. When key staff leaves the partnership – particularly those involved in critical operating roles and in ensuring consistent practices – old habits and novel approaches fill the vacuum.
A highly risky and demanding operating environment also plays a major role. Aversion to risk entices sponsor company staff to hedge their bets by maintaining multiple contract service providers under a variety of sourcing models.
Based on interviews from this study, Tufts CSDD also found that legacy activity contributed to implementation challenges as sponsors were frequently compelled to entertain entrenched relationship preferences and approaches simultaneously while new models were vying to take hold.
The conceptual promise of integrated, strategic alliances remains compelling but it appears to be beyond reach in the near term. Many sponsor companies believe that continuous improvement and refinement in their outsourcing models and technology adoption will help realize the benefits of integration. Some of these improvements focus on facilitating higher levels of operating interdependence where internal staff and their many collaborative partners acknowledge and support clearly defined and delineated roles and responsibilities without necessarily aiming for broad-based systems integration, and consistently shared practices and procedures.
But in the absence of widespread, clear successes and measured return on investment, sponsor organizations and their CRO partners may lose patience. It will become harder to implement refinements and take remedial steps as levels of organizational resistance and fatigue grow.
Organizational change and enterprise-wide commitment to consistent outsourcing practice is essential. A mix-and-match approach compromises the promise of integrated strategic alliances and reinforces the need to simultaneously accommodate multiple, inconsistent relationship models.