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A new approach to CRO partnerships

Published on 06/04/09 at 01:41pm

Contract research organisations now play an indispensable role in helping pharmaceutical companies develop their drugs. But as the number and complexity of their relationships with CROs multiply, are pharmaceutical companies really making the most of their CRO partnerships?

Currently it is common practice for large pharmaceutical companies to work with a wide variety of CROs across its drug development portfolio, using the Full Service model.

This is where a CRO performs all operational and managerial aspects of a specific protocol. While this one-stop shop approach has numerous benefits, there are also a number of obvious downsides.

Firstly, there is no standardised approach across different business sites and from legacy organisations.

Secondly, it is quite common for a CRO to be working with a sponsor on two or more separate and independent projects, liaising with different individuals within the sponsor company. The complexity of these multiple yet separate relationships are a challenge to manage efficiently for both sides.

At the same time, the system does not allow the sponsor company to exploit its buyer power to its maximum potential in negotiations with top CROs.

In light of these shortcomings, a new approach has now emerged - the Functional Service Provider (FSP) model. At Pfizer, this is the model that we have been using for several years, and we believe it is now proving its value.

The FSP model

The FSP model addresses all of the shortcomings of the full service approach. In a nutshell, it involves a CRO providing a specific functional service to contribute to a clinical trial programme, rather than providing all services for the whole programme.

So for instance, a CRO might be contracted to oversee only data management for a clinical trial programme, or just statistics, project management or administration instead, rather than all of these together. In this way, CROs can provide vertical specialist services rather than a horizontal full service approach.

And by unbundling the CRO services, a sponsor can choose the best-in-class providers of specific services. This means that instead of just working on one isolated programme (or numerous self-contained ones), the CRO can provide the same service or services across the sponsor's projects.  

This gives a clear focus to the service being provided, and naturally brings with it a more transparent relationship, which is easier to manage and evaluate.

Another important component of the model is a closer integration of CRO staff into the sponsor's systems.

The CRO is responsible for managing and training its own staff, but they will be granted direct access to the sponsor's IT systems & processes.

Partnership and training commitments

The long term result is that less project management is required from the sponsor and through improving planning capability, a greater transparency and capacity is needed.  

In addition, the CRO staff will act as a true extension of the sponsor teams  creating a genuine long term partnership that both sides find easier to invest in.

In terms of line management, the CRO commits to providing an adequate level of training, supervision, and support of its own staff.

In return, the sponsor agrees to provide protocol-specific training, knowledge of studies as well as access to policies and procedures.

If for any reason the sponsor requests removal of a resource, the sponsor will pay the training costs for replacement if performance of resource was acceptable.  But if the performance of the resource was unacceptable, the FSP will pay the training costs for replacement.

Performance management is conducted through an FSP Oversight Plan, which is generated and maintained by the specific sponsor country. The local sponsor study manager is responsible for tracking FSP staff against targets.

From the contractual perspective, after a Master Service Agreement is in place, the FSP provider can be engaged to provide study functional services.  The service is usually negotiated for at least a two-year period and there is one MSA per FSP.

The scope of services includes definitions of key contractual elements such as pricing, potential services and expected metrics.  

Work orders are issued per country, per study, which define resource needs, estimated total price, timelines and payment schedules for a finite set of work for a specific duration.

An example of selection

To clarify how the process might work, let's look at a hypothetical example.  The process would begin with selection of up to seven supplier participants, who are pre-screened and qualified.  These suppliers would usually already be well known to the sponsor and/or currently working with them. An online reverse auction event (using e-sourcing technology) would then be held, and vendors scored based on a combined weighting of quality assessment and quantitative pricing from the reverse auction. Pricing is a majority consideration in the awarding of business.

In terms of supplier selection, different approaches can be adopted, but it could involve targeting two suppliers to cover a specific geographical region, to deliver a specific activity (eg monitoring services).

The result can deliver around a 30% reduction in existing quoted costs, which for a large pharmaceutical company can be $25 million or more in potential savings.

Has the FSP model been a success?

The success of the model can be measured through key performance indicators, such as provision of trained staff, productivity, cost and customer satisfaction.

For Pfizer, the positive outcomes of the approach have been numerous. They include the ability to monitor resources in a tight labour market, and a new flexibility to adapt to portfolio demands. The FSP model has also seen a lighter burden of admin tasks (specifically training, IT support & line management) while customer satisfaction - both internal and external  has been maintained.

Since introducing the FSP model, a number of lessons have been learnt on how the system can be tweaked and improved.

This includes adapting the training model to include an operational person/superuser as opposed to dedicated trainer approach.  Also, the format of the service work order would be an umbrella approach to cover many activities versus a per-project basis.

There may also be a need for flexibility regarding the minimum experience required (eg two years) when selecting CROs.  

The MSA defined engagement time would be a reduction from 90 to 45 days. A performance scorecard would be important to define and this would include a goal to achieve higher productivity of FSP monitors versus sponsor.

Lower costs could be delivered through efficiencies and leveraging of FSP expertise, which are a long term goal.

Conclusion

In summary, pharmaceutical R&D needs to be more productive, cost effective and nimble than ever before, and the FSP model can help address this challenge.

The essence of the model is that by unbundling the services it contracts from CROs, the pharmaceutical company can chose a few best in class providers in these specific fields, make relationships simpler and more transparent, and drive down costs.

Quality also remains a core consideration. When selecting an FSP partner, the sponsor can build in quality criteria into the pre-selection process, and service providers who do not clear the quality hurdle will not be asked to bid.

It also allows a sponsor to use internally developed and integrated systems and processes. And finally, the engagement of the FSP model has delivered certain benefits and with further fine tuning can continue to achieve even greater efficiency.

BENEFITS OF FSP RELATIONSHIPS

  • Allows large pharmaceutical companies to exploit their scale in pricing. This means it can provide cost efficiency alongside speed and quality.  
  • Scalability of solutions and pricing and a single point of contact for cost negotiations.  To ensure the relationship is governed appropriately, a formal governance structure needs to be in place, involving senior members at the sponsor and vendor.  
  • Opportunity to harmonise standards and processes. Linked to this, the CRO requires access to sponsor technology and systems and therefore some integration needs to be achieved. To make the most of these arrangements, it is important to foster a continual improvement and shared learning in the relationships.

 

Gareth Lewis is director of clinical research at Pfizer UK. He would like to thank Pfizer's Dr Dennis Joseph and acknowledge his insights and perspectives in the preparation of this article.

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