(PHOTOGRAPHY: STEPHEN E. MUNZ ILLUSTRATION: PAUL A. BELCI)
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The use of CROs, an expanding multibillion dollar business, is expected to continue its growth in the coming years.1 And since overall R&D costs and productivity represent one of the most pressing issues industry leaders face today,2 outsourcing will almost certainly continue to play a major role in drug development.
The University of the Sciences in Philadelphia (USP) and TTC, llc are conducting a multiyear research program on the factors
associated with improving the speed and cost effectiveness of clinical studies, including the role of outsourcing.
Our research study includes a Web-based survey of sponsor pharmaceutical companies and CROs in a range of areas, from how
CROs are used to the process of selecting and managing a CRO. Other papers in this project have addressed a number of these
CRO-related topics.1,3
In this study, participants identified two related, yet distinct, outsourcing management areas: selecting a CRO and managing
a CRO. We found that a company that considers itself as performing well in managing a CRO tends to believe that it is good in the
previous step of selecting a CRO. Similarly, companies skilled at CRO selection also consider themselves to be especially
competent in the management processes that lead up to selecting a CRO, such as using a common bid grid. However, the reverse
does not hold true. Respondents in companies that consider themselves effective in selecting CROs do not necessarily assert
that they are adept at the subsequent step of managing a CRO.
Managing outsourcing involves many areas and processes. This study examined four key outsourcing-related activities: annual
budgeting, the use of bid-grids, CRO selection, and the management of outsourced projects.
Budgeting outsourced studies
The annual budget sets the operational parameters for almost every organization. Tracking and understanding operational variances
from budgeted numbers is a demanding task, both for those who collect the numbers and for those who make decisions based upon
those numbers.
Figure 1.
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Yet few sponsor company participants in this study thought their ability to budget annually for outsourced studies was more
effective than their counterparts' in other companies. But even fewer considered their company less effective than competitors
in the budgeting process (see Figure 1).
As one senior outsourcing manager put it: "Budgeting is something we need to get right, but often do not. Many times, though,
it is really because the scope of the project changed, and no company will ever be able to anticipate all the changes. We
could still do a better job of budgeting...particularly because no one likes having to go back for more money."
Selecting a CRO
There is a large variation in the way study participants evaluated their company's ability to select CROs, a greater variation
than we found in their responses to the use of budget and bid grids. Although most participants felt that their company was
similar to others in its ability to select a CRO, a third of those surveyed thought their company was better than other companies
in selecting a CRO. At the other end of the spectrum, fewer than one in 10 considered their company to be ineffective in selecting
a CRO.
Apparently, the ability to effectively select a CRO is not concentrated in any particular pharma company, whether large or
small, or limited to a particular geographic area.
