Contract Research Organisations: Considerations for Global Outsourcing

Pharmaceutical companies that are outsourcing pre-clinical trials globally are a progressively more important element of drug development. In this article we are going to look at some of the factors a sponsor should consider when outsourcing to a contract research organisation.

Strategic decisions behind outsourcing

It is important that a sponsor gives time to these decisions to make sure they are optimising the relationship and getting the best out of a partnership with a contract research organisation. Study planning is paramount with the three main considerations being the quality of the trials, the flexibility of the trials and the reporting strategy/speed. A sponsor that gives these factors appropriate consideration is far more likely to succeed. Sponsors must also understand that study planning is crucial to maintaining a similar level of control that they would have if they were conducting the trials in-house.

The main reason that pharmaceutical companies decide to outsource trials is the reduction of fixed costs. Also, it is more than likely to be cheaper to use a contract research organisation that already has access to cutting-edge technology rather than try and implement this technology in-house. The same applies to professional expertise. Using trained staff in another facility can be cheaper than providing the necessary training to their own workforce.

Outsourcing globally adds data quality, communication processes, cultural implications, regulatory guidelines and legalities to the equation.

Labour costs

Labour cost is the primary motivation behind outsourcing as it normally comes in at around 80% of the trial cost. While international labour costs are significantly lower in emerging markets, the staff turnover at international facilities could be considerably higher. This is due to the rapid expansion in the number of laboratories. As new facilities open, qualified staff members are headhunted and move on from existing facilities. The sponsor should survey the training records of any prospective partner and choose an organisation that has well-trained staff who have been at the facility for a considerable amount of time.

Local resources

International laboratories may have cheaper access to certain trial elements. For example, colonies of cynomologous monkeys are abundant in China. It would be far cheaper to setup and run a trial involving cynomologous monkeys in China than it would be to start the same trial in the United States.

Future business

It is always worth letting the contract research organisation know the long-term objectives of any set of projects. If numerous future contracts are on the table, the facility is more likely to keep costs down for the initial studies. It is not uncommon for contract research organisation to use preliminary trials as loss leaders.

Increment by increment

As with any business engagement, it is often good to test the water with a small trial or set of trials and evaluating the results before committing extensive time and financial resource to a large trial. Assess the trail on the elements mentioned in Part I of this article along crystal-method with the speed/efficacy of any measures taken to resolve unforeseen difficulties. For example, if the trial output is significantly different from the predicated results, does the laboratory troubleshoot the data and prepare and offer follow up trials or wait for the sponsor to react to the discrepancy?

Communication

This aspect is vital to the success of any partnership between a pharmaceutical company and a contract research organisation. This is a particularly relevant element when outsourcing globally as different countries have different communication styles dependent upon culture. For example, in Western culture, mistakes and errors are often brought to light quickly and their exposure is encouraged. For some foreign CROs, this admission of a problem may be considered dishonourable. It is critical that a study plan has been meticulously approved by both parties and that expectations are set and 100% transparent.

Legalities

It is natural for any pharmaceutical company to be highly cautious of intellectual property infringement. Similarly, it is expected that any contract research organisation will be wary of the damage caused to its reputation due to accusations over misappropriated information. International laboratories can have significantly different attitudes towards insurance cover and dispute resolution. Given these factors, it’s imperative that all contract clauses have been fully assessed and absorbed prior to any agreements. They need to be crystal clear. For example, what happens in the event of a pharmaceutical company rejecting trial results and claiming costs back? Laws can differ widely between countries and pharmaceutical companies may want to consider hiring a local legal representative to advise them on any contracts.

 

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