Chris Hamilton

	There are two main trends in outsourcing: the first is the project-based model. The difficulty with this model is that big pharma, used to in-house groups, often have a continual flow of questions going to the study teams because they are accustomed to making changes and leveraging internal resources to achieve often-changing requirements. When this approach is used with a CRO, they encounter change orders and then become dissatisfied.
	
	

The second trend is toward managed, full-time equivalent (FTE) pools, otherwise known as functional service provision (FSP). This is of most interest to medium or large companies who may have internal teams but want to augment them for fixed periods to manage peaks or simply keep their employee overhead down.
	
	The following are the four main delivery models for FSP:

 – This often entails using the systems and SOPs of the pharmaceutical company. It can be low profit work if the CRO does not achieve the correct blend of senior-to junior-resources or higher cost regions to low cost regions. However, it is a straightforward delivery model and agreeing change orders is less contentious. Price increases tend to be inflation-linked and usually work on a two or even three-year pricing model.

 – Generally performed using the CRO’s own systems and SOPs, less commonly using the pharmaceutical company’s infrastructure. Pricing can be difficult to get right when delivery is on the pharmaceutical company’s systems as it involves processes of which the CRO has no experience at first. Pharmaceutical companies should allow time for learning followed by efficiency gains over the period of the contract. Fixed fee FSP can include lengthy projects and can be of high complexity. For the CRO, defining the complexity levels during or after the bid process is key to avoid making a financial loss on high complexity work. This model can cause conflict within the pharmaceutical company, pitching procurement needs against the requirements of the operations department. This potential risk needs active management.

	The CRO needs to fit in with both the sponsor’s procurement and operations teams and needs to be strict on working to contract, as change orders are difficult to obtain. The CRO is often treated as part of the pharmaceutical company’s own delivery team; the FSP manager is, therefore, key to this relationship and the customer procurement team will expect pushback if their operations team start requesting work outside of contract. The CRO is expected to police the scope to ensure what is delivered is within it and to ensure change orders are managed up front and prior to work being completed. The pricing of hours required to deliver units has to be correct or the profit margin slips away very quickly. Creating a pricing model that the pharmaceutical company can use before allocating the work will help build confidence and trust; change orders may then be more easily accepted. Fixed fee usually operates on a three-year pricing model.

 – This often entails using the systems and SOPs of the pharmaceutical company. The key is to manage caps very carefully using percentage complete versus hours worked. Capped T&M can first appear to be quite profitable for the CRO. The risk is that caps are hit before the work is completed and no change orders have been agreed in advance. The CRO may have to write off hours that cannot be charged. The CRO must review and monitor project performance constantly. It also needs to manage the workload, not take on too much or commit too many employees to the contract, as the work can suddenly disappear. This applies to all delivery models. Typically, capped T&M also operates on a three-year pricing model.

 – This is a T&M model fundamentally, but the sponsor buys 100% of the resources’ time. They, therefore, pay for the resource whether they use them or not. The pricing is often annual and linked to inflation. The model is again often used working on the pharmaceutical company’s systems and SOPs. It is usually low profit as the pricing is restricted due to the pharmaceutical company comparing the cost to that of contractors or in-house resource, forgetting that the FTE is managed by the CRO. There can be a risk that the CRO cannot ramp up as the price is too low for the salaries required to recruit the level of staff the customer wants. Staff may be required on customer site at times and the customer will want senior staff as often they expect them to manage/interact with their own employees. Often the work is not complex and this leads to boredom and a high staff turnover.


	
	For CROs, there are a few critical success factors to consider to reach a long-term sponsor/vendor relationship. The vendor needs to guarantee “sustained” quality. It is not acceptable to deliver 10 good people (who are perhaps more expensive) and then, in an effort to get to a target margin, reduce the quality of the next 10 by buying in cheaper resource and repeat that again with the next 10. Any plan needs to deliver an agreed margin, which may be lower than the vendor wants but will unlock more work in the medium/long term. The CRO needs to conduct ongoing pre-selection of candidates to avoid rushing and recruiting sub-optimal resource.


	
	The cultural fit between the pharmaceutical company and individuals in the FSP team is important. The sponsor must be able to screen to ensure there is a fit with the person and not just technical suitability. Character profiling is often overlooked in the heat to meet demand. It is important that individuals can work to the values of the pharmaceutical company. Getting the pharmaceutical company involved to some extent in the CRO’s HR processes can be beneficial in aligning expectations and building trust with the selected CRO.
	
	


	
	Communication is crucial. Therefore, if key performance indicators (KPIs) can be agreed in the area of communication, both parties can agree on their expectations. Typically, the team will be located in different offices and different countries. This can be acceptable to a pharmaceutical company in the knowledge that they may get the necessary blend of high/low cost with some team leads that are local to their own for regular communication. For example, the mix could be 40% high cost, 20% medium, 40% low and the geographical spread may enable the appointment of more experienced resource in each country. Time zone is important to achieve essential day-to-day communications to get the work done.
	
	


	
	Technology-wise, it is often most efficient for the CRO team to access the pharmaceutical company’s technology environment remotely and work within it. One person or a small group can be trained directly by the sponsor who in turn can train others as needed. This is known as the “train the trainer” model. The CRO should deploy internal management to monitor quality and productivity. KPIs should be monitored in this respect and shared with the pharmaceutical company at regular governance meetings. The FSP manager at any given location is critical to the relationship. Typically, the pharmaceutical company and vendor can agree a ratio of one FSP manager to a particular number of resources.  
	
	


	
	Team attrition can be a big factor in achieving an on-going quality service. If the team is located in an unattractive location, attrition can be higher. In addition, the team lead plays an important role in keeping individuals motivated and happy in their place of work. Salary is of course a key factor, so if the CRO has agreed to a five-year price deal that is unsustainable due to demand and salary increases for a particular skill set, then attrition only increases as employees are lured to higher paid positions in other companies.
	
	Sponsors have often found that CROs who are good at delivering fixed fee projects are not good at delivering FSP and vice versa. FSP is a very different mindset and modus operandi. Sponsors and vendors need to be aware of this if trying out FSP for the first time. Oftentimes, it works best where the sponsor supplies the team leads and the CRO employees are treated as an extension of the sponsor’s own in-house team.
	
	


	
	An important factor in evaluating a vendor is to see some evidence of their ability to ramp up to meet the pharmaceutical company’s work plan. A typical question is how many resources does the CRO have in the particular functional area. The answer may be a high or a low number, but whatever the case, it does not bear any relation to the number of resources available to the sponsor. No CRO has idle staff in great numbers so the sponsor has to expect a ramp-up period. The CRO needs to have a credible ramp-up plan, preferably with some previous track record of success. It should be transparent to the sponsor how many resources will be existing employees and how many will be recruited.  
	
	


	
	On the subject of pricing, a blend of low cost resources with medium/high cost ones ensure a competitive overall price but it is important to build in inflation if the pricing is to last more than a year. If the bid is via an online reverse auction, robust models will need to be built to quickly calculate margin at different prices. The downside of this procurement method is the significant risk to sustainable quality if the price is driven too low. It can become impossible to recruit the right level of resource so the vendor fails and the sponsor is left with an urgent problem to solve to avoid pushing out study-end dates.  
	
	


	
	Overall, sponsors who already have experience with FSP should evaluate what aspects are working and which are not, as there may be a better model available. They should also make sure that the contract details are going to be sustainable for the CRO because they will ultimately be affected by resource constraints or team turnover. CROs need to evaluate if they can really meet the experience levels, resource numbers and pricing sought by the sponsor. A realistic ramp up plan should be agreed between both parties to align expectations.
	
	

Articles

Functional service provisions can provide sponsors and CROs with a way to efficiently manage clinical trial outsourcing methods.

Achieve Sustained Clinical Trials Quality in a Functional Service Provision

	A recent initiative (April 2014) by the European Medicine Agency (EMA) on data transparency was finally passed into draft law by the European Union, requiring that detailed summaries of clinical trials are published in a publicly accessible database once marketing authorization is granted. Sponsors could face strict fines for not complying. Also, in March 2014, the EMA published the first summary of a risk management plan (RMP) for a newly authorized medicine, stating “the Agency will pilot the publishing of RMP summaries for all newly centrally authorized medicines during 2014 and at a later stage will start producing RMP summaries for previously authorized medicines”. The RMP will be a publicly available document that describes all that is known and unknown about a drug’s safety and what actions will be taken to monitor the drug on the market and mitigate any risks. 

	These latest developments signal a significant step towards greater clinical data transparency in the European Union. The ultimate aim is to make it mandatory for Sponsors to respond to reasonable requests from the public to access the data, not just the results, collected during clinical trials. For this reason, clinical trial Sponsors need to evaluate whether they are prepared for the upcoming legislation which is anticipated to take effect in 2016.

	The EU states its objective in the opening section of the legislation, 

“In a clinical trial the rights, safety, dignity and well-being of subjects should be protected and data generated should be 

 Ensuring clear traceability of clinical data is therefore imperative to satisfying not just the EMA but also EU law. Being mindful of this requirement from Phase I will pay dividends for Sponsors later on. CROS NT is a strong advocate of centralizing data from the outset because it has seen so many of its customers benefit from this approach in terms of efficiency, cost savings, standardization and regulatory approval. For Sponsors selling the product license to a larger pharmaceutical company a centralized approach can enhance the value of the intellectual property because everything is in the one place, fully traceable and due diligence ready.

	If one study team is assigned to statistical trial design, data management, data analysis and medical communications from the start, common data standards can be applied throughout the drug development process. Continuity of team members creates a consistent style of medical communications and important collaboration between statisticians, data managers and medical writers. All data are stored in a central data warehouse and/or archive which avoids having to keep track of multiple repositories.

	Centralizing clinical data in the early phases of drug development facilitates better integration of studies across all phases with common assessment methods, uniform traceability of data as well as the centralization of study metrics and study reports.

Ensuring traceability for regulatory submissions

	In order for data to be transparent to the public, it must also be traceable. Implementing CDISC standards helps both traceability and cross analysis of datasets. There must be clear traceability from analysis results, to analysis datasets, and to SDTM datasets.

	There are two types of traceability: data-point traceability and metadata traceability. ADaM datasets allow for the creation of variable or observations that are not directly used for the statistical analysis but support traceability. For example, re-allocation of data may happen for early termination visits in accordance with the Statistical Analysis Plan whereby both original visit name and re-allocated visit name are kept within the ADaM dataset. Metadata traceability includes documentation required to clearly describe information that already exists in the SDTM database together with algorithms and methods used to derive an analysis result.

	Preparing Your Data - Integrating Technology

	Clinical data visualization can be an important component for Sponsors conducting trials in Europe who need to make more informed decisions and make sense of clinical data which could eventually be shared publicly. Conducting a trial generally leads to data being spread across multiple databases including EDC, CTMS, ePRO, safety databases, etc and if a centralized approach is not employed, such databases can be spread across multiple vendors and countries.

	Data visualization tools facilitate drill-down and click-through to multiple levels of detail, allowing for the analysis of specific subsets and sub-populations. Customizable dashboards allow the clinical team to create ad hoc reports on site performance, data quality, safety and efficacy, drug supply, patient management etc.

	Using data visualization tools, clinical leaders can see information that is beyond the capability of the CTMS report set. They also facilitate Risk Based Monitoring which vastly improves data quality and cuts monitoring costs. Most importantly, they allow clinical study teams to make crucial decisions from the information and trends revealed during the study rather than at the end.

	If the EU legislation takes effect, Sponsors will need to be able to produce data for publication in an EU database. If all trial data are already centralized then they will be indexed, traceable and transportable. This means they can be easily transferred to a publicly accessible database. Centralized storage can produce additional benefits like greater efficiency and cost reduction. Review cycles can be reduced with standardization. Sponsors can also avoid paying for multiple global library set-ups, programming macros and validation checks.

Author: Chris Hamilton, Global Head of Business Development & Marketing, CROS NT

With the rationale of making Europe a better environment for clinical research, the European Union is taking steps towards greater transparency of clinical trial data.

Chris Hamilton

Articles

Achieve Sustained Clinical Trials Quality in a Functional Service Provision

Upcoming European Clinical Data Transparency Regulations - How to Prepare