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Clinical Trial Business Legacy

Top of Mind for Clinical Development Operations

The major industry milestones of the past 20 years.

CRO Timeline 1981-2012

Companies are facing challenges in adopting and implementing integrated and more strategic relationships. While organizations have embraced these relationships as strategically critical to their long-term viability, and adoption has increased substantially in the last year, it has progressed in unexpected ways, leaving the outsourcing landscape misshapen and unstable. 

A bird's eye glimpse of today's outsourcing landscape reveals:  

Small and mid-sized contract research organizations (CROs) have largely been left behind while major CROs—the only organizations with sufficient scale and diverse talent—service a growing number of integrated relationships. 

Many smaller and mid-sized CROs have looked to joint ventures in order to scale up and jump on board in servicing integrated relationships of their own. 

Sponsors have compelled their preferred CROs to customize each integrated relationship in order to accommodate company-specific systems, processes, and cultures. 

For these CROs, customization means higher costs to service integrated relationships and lower operating margins. 

In response, large CROs are poised to continue reducing fixed infrastructure costs and to move into more profitable service areas along the R&D continuum.

For industry insiders and observers alike the coming 18 months will be anything but smooth sailing, as sponsor sourcing requirements diverge from the operating needs and long-term strategies of the major CROs. 

In addition, the suboptimal implementation of integrated relationships during the past two years has prompted many sponsors to modify their governance practices and to rein in their collaborative control. 

Global operating conditions during the past five years have prompted pharmaceutical and biotechnology companies to seek new approaches to contain costs, improve infrastructure utilization, and facilitate operating efficiencies. 

Clinical Research Revenue Proportions by Type of Sponsor 

Weak consumer demand and restrictive price controls have dampened revenue and profitability. Facing an unprecedented near-term $125 billion in revenue at risk due to patent expirations and competition from generic drug equivalents, sponsor companies are aggressively reducing fixed costs and vying for ways to develop drugs more efficiently. 

Clinical and nonclinical services outsourcing have been essential solutions, helping companies achieve their operating and economic objectives. Without exception, pharmaceutical and biotechnology companies have increased their use of and reliance upon CROs to secure project-specific niches and full services as well as portfolio-wide functional service, multi-functional service, and alliance-based service support. 

Smaller and some mid-sized pharmaceutical and biotechnology companies are primarily using transactional relationship outsourcing to augment capacity for a specific task in support of a given project. This approach affords small and mid-sized sponsors variable multi-functional capacity to support the peaks and troughs of their portfolio resource requirements. 

The largest and some mid-sized sponsor companies are actively using more integrated and strategic relationships (e.g., functional service providers (FSP) and alliances). These relationships offer major sponsors the opportunity to transfer operating risk to better leverage their internal resources, and to streamline select non-core functional areas. Integrated functional and alliance relationships also permit CROs to become essential to, and embedded within, sponsor company portfolios. 

For sponsors with large and very active development portfolios, FSP and alliance partners hold promise in establishing longer-lasting relationships that benefit from strategic insight into and engagement in future portfolio needs. Under these relationships, sponsors partner with a much smaller number of contract service providers. They gain the assurance of dedicated global capacity and expertise under shared governance, coordinated communication, and issue resolution, and integrated operating processes and systems. Integrated relationships also offer higher revenue per client to CRO partners. 

Recent published reports affirm this promise: Pfizer and Eli Lilly, two of the earliest adopters of integrated alliances, report that their three-year-old relationships have resulted in significant cost savings, cycle-time improvements, and fewer contract delays. Eli Lilly, for example, has reported 20% cost savings on data management and monitoring and a 93% improvement in monthly patient-enrollment volume. Pfizer has reported saving $20 million annually through consolidating its vendors from 150 to 17; a 26% reduction in enrollment cycle time, and an 80% reduction in the number of contracts delayed by more than 120 days. 

Although many sponsor companies have embraced strategies to establish integrated outsourcing relationships, most sponsors have executed these strategies poorly during the past 24 months. Interviews with, and anecdotal reports from, sponsor companies indicate a large number of implementation shortcomings, including:  

Coordination and communication problems among local affiliates and lower-level management—parties who have had limited to no involvement in establishing integrated relationships—and CRO project teams

Failure to communicate the new outsourcing strategy to support functions, resulting in confusion and inefficiency

Organizational commitment to integrated relationships has waned as governance roles and responsibilities of personnel at varying levels in the sponsor organization have not been clearly defined

Realization that too much responsibility has been transferred to CRO personnel, resulting in more strained relationships between sponsors and their valued investigative sites and subcontractors

Senior management at both sponsor and CRO companies has failed to adequately convey relationship expectations to study teams, resulting in redundant activities and poor communication

Failure to communicate the rationale for the new strategy throughout the enterprise—forcing staff at the execution level to establish their own practices and processes, resulting in inefficiency

The results of a 2011 survey conducted by CenterWatch echoes these anecdotal reports on the challenges of implementation. Conducted between March and June, 134 respondents from CRO companies evaluated 52 FSP and alliance relationships and reported that sponsors were having major difficulties providing adequate oversight, clearly defining governance team roles, and establishing efficient issue-resolution processes. With experience under their belts, having now recognized that the implementation of their new outsourcing strategies was weaker than expected, sponsors are modifying and adjusting governance structures and collaborative processes and practices. 

A number of sponsors are exploring ways to empower internal staff at the execution-level, more actively manage communication and coordination processes and systems, and more effectively measure collaborative performance. 

Sponsors are also closely watching regulatory agency response to integrated sourcing relationships in anticipation of tighter scrutiny of clinical trial oversight and issue resolution. FDA and EMA have both signaled strong interest recently in understanding how integrated outsourcing relationships impact global clinical data quality and compliance. 

CRO customization and eroding profitability

As sponsors move to adjust—and in many cases increase control over—their integrated relationships, CRO partners appear to be moving in the opposite direction. Many top CROs are consolidating assets; subcontracting non-core capabilities that are a drain on their profitability; and looking to tie into more variable approaches to accessing a diverse pool of talent specializing in a wide variety of drug innovation areas. 

Regardless of the types of relationships that sponsors and CROs form, contract services profitability is being challenged. Sponsors want more flexible and fluid drug development operations at lower relative cost. Pharmaceutical and biotechnology companies are requiring CROs to provide more favorable preferential pricing for both project-based tasks and portfolio-based services. This practice alone is putting downward pressure on CRO company margins. 

Integrated relationship customization is also deeply squeezing large CRO profitability. No two sponsor-CRO relationships are the same. Every sponsor wants to establish relationships that uniquely suit their culture, their operating style and practices, their systems, and their management models. Those CROs that have entered into a number of FSP and integrated alliances have had to increase their own operating capacity, infrastructure, and capabilities in order to service the unique demands of each partnership. Customization cannot be scaled. It demands more infrastructure and management and eats into the CRO's ability to operate efficiently. 

Sponsor company adoption of FSP and alliance relationships has pushed CROs of various sizes to pursue widely different strategies:  

Small CROs are focusing on servicing transactional relationships and subcontracting out their capacity and capabilities to larger CROs. This segment has reported relatively strong performance during the past several years.

Mid-tier CROs have been blocked out of the outsourcing market's movement toward more integrated and strategic relationships. These companies lack sufficient operating infrastructure and expertise to secure and support integrated relationships. Mid-tier CROs have turned to the private equity markets to build through acquisitions and mergers—resulting in more capacity and capabilities to compete with the market leaders and play in the integrated relationships arena.

The largest CROs—those uniquely capable of providing the depth of capacity that sponsor portfolios require—have been the primary recipients of integrated relationships. The vast majority of newly established FSP and alliance models have been awarded to the top 10-largest CROs. According to investment banking firm Fairmont Partners, the market for integrated alliances may be even more lopsided. The top five-largest CROs alone have entered into more than 100 alliances during the past several years.

According to CenterWatch, the majority of revenue for leading CRO companies now comes from strategic integrated relationships (e.g., functional and alliance relationships). Among the top 10-largest CROs, one third of their reported revenue comes from functional service provider relationships, 39% from integrated alliances, and 29% from transactional relationships. In contrast, the majority (60%) of revenue for niche and mid-sized CROs comes from transactional service relationships. 

In addition, CenterWatch reports that an overwhelming number of CRO professionals (80%) expect sponsor use of integrated alliances to significantly increase during the next three to five years. Almost half of the 134 respondents believe that the predominance of transactional and functional service provider relationships will either decrease or not change during that same time period. 

The largest CROs have highly diverse revenue portfolios. Many of these companies have recently reduced headcount and consolidated infrastructure (e.g., PAREXEL, Kendle, Covance, and PPD) to meet short-term profit objectives. 

Many of the largest CROs have turned to the private equity markets to get out from under public market scrutiny and visibility. Doing so allows them an opportunity to "fix" their revenue mix quietly, with less transparency. It provides longer time horizons free from outside influence and reactive public market pressure to change and eliminate holdings. 

Indeed, publicly traded CROs seem to be a dying breed. During the past eight years, 13 contract clinical research service providers that were formerly public companies have moved into the private equity markets. 

Much to the confusion and surprise of many professionals in the clinical research enterprise, some of the largest market-leading CROs— including Quintiles, PRA International, and PharmaNet—have transitioned out of the public markets. The recent acquisition of Kendle International by privately held INC Research and the acquisition of PPD by The Carlyle Group and Hellman & Friedman continue this trend. 

Poor global economic conditions for drug developers and unforgiving and intensifying investment community scrutiny have made the public markets less attractive to CROs. In the coming years, behind the veil of the private markets, large private CROs may look to sell off under-utilized and low-margin-producing assets. Some may seek to expand their offerings to include novel, high-growth, and higher-margin services, such as R&D and health service technologies; nonclinical services; clinical supplies; regulatory sciences; and R&D and health consulting services. These novel service areas extend the integration of CROs into all areas of R&D. Long-term interaction between these areas in a more coordinated and integrated fashion promises to drive higher levels of drug development performance and efficiency. 

Private equity investors, in turn, appear to be bullish about the life sciences industry in general, and they find the CRO market to be particularly attractive. CROs now double the global capacity of drug development professionals and play a critical and essential role in supporting pharmaceutical and biotechnology company R&D operations. Sponsor company reliance on CROs is certain to grow. CROs typically generate strong cash flow, manage their operating expenses prudently, and most have taken on minimal debt to fund their growth. Private equity investors will help reshape the CRO landscape and create substantial value through—in many instances—the eventual sales of CROs via initial public offerings. 

The market for contract clinical services is changing profoundly. On one side are small and mid-tier CROs servicing primarily niche and full-service transactional relationships. The top mid-tier and market-leading CROs are concentrating on large pharmaceutical and biotechnology companies to obtain and establish more integrated relationships. Mid-tier CROs appear poised to continue to consolidate the outsourcing market in order to supplement their capacity and capabilities. Market-leading CROs will continue to pursue higher-margin businesses, expand their portfolio of service offerings, and increase their client base of integrated relationships. 

Although FSP and integrated alliances offer the largest CROs continuity, upfront planning, and stability during periods of global economic growth, these same relationships can be more volatile as portfolio-wide delays and cancellations tax CRO operations during global economic downturns. 

Continual change is coming as sponsors' sourcing requirements diverge from the major CROs.

Outsourcing Landscape

In case you have not noticed, there have been some massive changes in the pharma services industry over the past six months: mergers, acquisitions, more mergers, venture capital/ private equity buy-outs, capital infusions, and even more mergers. What not too long ago was a group of top 10 CROs has quickly been cut to six with inVentiv purchasing i3 Pharma Services and PharmaNet and INC Research purchasing Kendle. So now what do we talk about as an industry? 

My wise grandfather used to say "Great minds discuss ideas, ordinary minds discuss events, and simple minds discuss people." It was his way of reminding us that talking about people isn't overly productive. But what if your ideas are triggered by people or events? I think my grandfather would have gotten a kick out of trying to answer questions like that. Often the three are indistinguishable. It's hard to talk about an event without talking about the people involved. It's hard to talk about ideas without talking about those that had them first. This article focuses on all three elements of the saying my grandfather liked: ideas, events, and people. We will take each of these points in reverse order, starting with people. 

What happens when an industry grows up together? We have obviously witnessed this before with the transition of the early PC/web/technology companies. Microsoft went through it when Bill Gates stepped aside and they, after a few hiccups, are doing just fine; Marc Andersen (Netscape) simply sailed off into the sunset and Netscape, as an entity, is no more; Larry Ellison is still actively at the helm of Oracle; and Apple needed Steve Jobs to come back and save them after he decided to pursue other interests. Needless to say, many a corporate strategy map was created, modified, scrapped, and redesigned during these periods. And while we weren't there in the trenches, we'd hazard a guess that the strategies of these companies depended on who was driving the company. 

Focusing back on the CRO industry; what are the implications when the innovator CEO retires, become less engaged, gets bought out, or gets moved out? Does the company inevitably change direction? Does it recalculate on the fly or is the destination, the goal, already programmed into the corporate consciousness? It would be one thing to try and judge the potential impact on a single company if/when the founder moves on. It is quite another exercise to hypothesize how this could play out on an industry-wide scale. Most of the major players in the CRO industry were formed within six or seven years of each other. And this makes for a fairly homogenous group. Let's also not forget that the research tells us that most of these companies struggle to differentiate themselves, with personal/past relationships being perhaps the single most important driver of new and repeat business. 

What makes this phenomenon more pronounced is that you have arguably the three largest clinical development service providers (Quintiles, PPD, and PAREXEL) still being run by their founder. PPD is included in this mix as Fred Eshelmen, PharmD, is still very active in the company. Remember that back in 2001 Dennis Gillings, PhD, Quintiles ceded the CEO position only to take it back after two years. 

What you are starting to see is a dichotomy between new management and industry stalwarts. We've recently witnessed one of the long-timers, Candice Kendle's company, being acquired by INC Research and we've previously seen Eshlemen vacate the CEO role at PPD. The average tenure as CEO for the non-Founder CEOs is about five years while the average for the Founder CEOs is about 31 years. 

This isn't good and it isn't bad. What we are proposing is that carefully monitoring how the inevitable transitions take place for INC Research, PAREXEL, maybe PPD again, and Quintiles will dramatically shape industry events in the coming years. 

The next generation of CRO leadership will have to operate globally and be able to grow the core clinical development revenues while vertically integrating up and down the value chain in order to grow revenue and expand/hold margins. 

The CRO industry has been the place to watch if you are looking for meaningful events. You don't have to look far to find inVentiv's purchase of i3 Pharma services, Campbell Alliance, and PharmaNet; INC Research's sale to private equity and then their purchases of Avos Consulting, Kendle, and Trident; LabCorp's purchase of Clearstone Central Labs; and a host of corporate rebranding and restructuring. ISR believes this round of much needed CRO consolidation will likely continue. Consolidation will not simply be mergers of like organizations, but will be predicated on broadening their service offerings and geographical reach. The next set of companies to watch are PRA, Medpace, and BioClinica. 

There are two ways to get from point A to point B: the direct route and the indirect route. ISR believes if you look into the future, the biopharma outsourcing industry is a growth industry. There will be more revenue generated five years from now than is being generated today. That said, we are not in the most stable of times for service providers. Global biopharma is reeling from patent expirations, ineffective pipelines, and adjusting to the seemingly endless parade of mergers themselves. All of this is having a significant impact on CROs. Want proof? Take a look at the recent financial volatility surrounding the publicly traded CROs. Over the past four quarters we have seen book-to-bill ratios between 0.20 and >2.00, we have seen cancellation rates as low as the mid-teens to over 50%, we have seen market capitalizations cut by 30% in a day. 

Talk about recalculating a strategy or tactical operations, try and manage a corporation where swings like this are occurring. Keeping an eye on operational consistency, ISR's measure in its Service Variability Index (SVITM), will be vitally important to CROs as they grow and especially important for those going through recent mergers. The SVITM measures how well a service provider meets customer expectations on a variety of important service quality attributes. 

The good news for CROs is that most biopharma companies are increasing their outsourcing activities; many in the form of large, multi-year strategic arrangements. Again, this creates wild swings in new business wins, revenue, and hopefully profit. The ups and downs of biopharmaceutical outsourcing can be summarized by looking at Pfizer's recent strategic decisions. Pfizer is shedding thousands of R&D jobs and is shaking up how it does research. The company is closing a research hub in Sandwich, UK, and moving some activities out of its Groton, CT R&D headquarters as it narrows the number of therapeutic areas it is working on. While these changes sound somewhat macro to most people, these changes have real and sometimes dramatic impacts on service providers. If you are a CRO that worked with Pfizer on one of the therapeutic areas they are no longer going to participate in, then this announcement could be fatal. On the other hand, if your company was lucky on two counts: to work with Pfizer and your therapeutic area is unaffected; you are still not out of the woods. Pfizer R&D is certainly in a period of turmoil causing delays in decision-making and budgeting, the inevitable game of human resource musical chairs has started, and most importantly, the process of compound prioritization and resource rationalization has begun. Only time will tell how successful CROs like PAREXEL and ICON are at navigating the ups and downs of Pfizer clinical development organizations. 

So, while the tide might be rising for all CROs based on an increase in clinical development outsourcing, (longer strategic partnerships, pharma mergers, and sponsor internal R&D cuts) the activity has become a lot more volatile. 

Clinical trials are long endeavors, often lasting two or three years (or more if you have long-term registry studies or strategic partnerships in place), which makes the effects of succession planning, strategic planning, and resources planning, or lack thereof, quite important. Biopharma sponsors don't make many short-term purchases from clinical development service providers. They can't simply change providers at the drop of a hat should things start to deteriorate. This is even more pronounced when thinking about the strategic partnerships sweeping the industry. Often these are multi-year deals come with sharing IT infrastructure, shared performance metrics, shared SOPs, and senior management governance and responsibility. 

In the end, the business of clinical development outsourcing is about people and trust. All the mergers in the world can't impact a study as much as the quality of one project manager. How do we know? We ask pharma decision-makers what is important to them when they outsource a clinical development study. Do they tell us global reach? Not very often. Do they tell us innovative solutions? Sometimes. The one consistent thing they tell us is experience and expertise of the service provider's people. 

As CROs become larger and global, project managers will work more autonomously within their own organization. While it has probably always been the case, ISR believes as CROs grow, their success or failure will depend more on micro, yes micro factors like individual project managers. Finding, hiring, training, and retaining high quality clinical project managers will be the keys to long-term CRO growth, profitability, and stability. The way to consistent delivery, low service variability, is to have high quality individuals running the studies. 

There are a few significant questions to ponder as a result of recent or highly anticipated industry events. ISR looks at potential changes to the outsourced clinical development industry by stratifying companies by size. 

 These companies can continue to stay the course and try to build their customer base through specialization (therapeutic, procedural, and expertise) and relationship building, probably targeting small/emerging biotech companies. If you can find a sister company that can add capabilities/capacity without much overlap, then growing by merger is a real potential. The goal is to reach a critical mass large enough to play in the mid-size pharma segment. These providers definitely serve a valuable purpose in the clinical development world as they often specialize in services that large-scale companies (CROs or Pharma) could not profitably provide. 

 These companies are probably under some pressure, especially some of the larger ones that have been passed over in the recent merger activity. There are some obvious advantages to being a large, global, full-service service provider. This allows you to play in the sandbox with the large pharma customers, where clinical development activities are centralized. However, ISR's research shows that sponsors are generally more satisfied with mid-size CROs than they are with the traditional set of large CROs. So how do you grow, but maintain your service quality? Concentrating on organizational development strategies that focus on service delivery and constantly monitoring your service quality through a customer satisfaction program are two recommended approaches. There will be continued consolidation at this level. Whether this consolidation is through a merger of peers (PRA and Medpace) or though multi-mergers focusing on a technology or approach (Aptiv via Averion, Fulcrum Pharma, ClinResearch, ADDPLAN, Trio Clinical Resourcing, and Niphix) or therapeutic mergers (US Oncology and Ockham and MedSource), we see the trend continuing.  

The playing field has suddenly become more crowded in the past 12 months. There are now more service providers that can legitimately call themselves large, global, and full-service. Over the next 12-24 months, companies like Quintiles, PAREXEL, PPD, and ICON (maybe especially ICON) will start to feel more pressure from the new kids on the block; large pharma RFPs and awards will now be split among a larger group. How do you differentiate yourself once size is no longer the same strategic asset it once was? Some have gone the way of tacking on consulting capabilities (Quintiles, INC Research, PAREXEL, and inVentiv). Some have tried the technology route (PAREXEL and Perceptive Informatics). Some have gone to integrated clinical and commercial capabilities (inVentiv, Quintiles). 

ISR believes the next step in the evolution of large CROs will be the establishment of a category killer. Potential category killers could be: 					

PAREXEL + Covance: PAREXEL is in need of a central lab and Covance gets more scale in its Phase II/III operations.

PPD + ICON: geographical strengths make this a combination with less operational overlap than other large combinations.

Quintiles + Accenture: gives Accenture a stronger operational arm and gives Quintiles access to the C-suite to effectively implement its joint clinical, commercial, and capital strategy.

Several companies could have been mixed-and-matched in this analysis and a myriad of technology plays could be throw, but the general point remains the same; the establishment of a category killer is a next logical step for the large CROs. 

So what does it all mean to you? How do you prepare in the event your corporate or department or group navigation device starts blinking "recalculating?" 

 Develop programs that constantly measure your organization's internal satisfaction with your service providers. 

Look to outside sources for independent assessments of service providers. There could be better/alternative options available to you (e.g., high quality service providers you don't have direct experience with). 

Move to penalties or bonuses for CROs that retain their staff through an entire project. 

Know your service providers. Ask, what has changed in the past six months that I need to know about? If they have gone through a recent merger ask about the make-up of the study team. For example, do you have a PM from inVentiv, a CTL from i3 Research, and a CRA corps from PharmaNet? 

Measure twice and cut once. Measure your customers' satisfaction with your operations and your people.

Keep your strategic options open and keep abreast of your competition and how their actions affect your selling messages and business models.

Invest in key personnel training and reward high customer service.

Develop transparent systems. These systems will quickly alert senior management if there are issues and keep your customers aware of your activities.

Prepare internal infrastructure, systems, and processes for increased accountability (e.g., bonus/penalty clauses).

Keeping these points in mind today will help biopharmaceutical sponsors and service providers better manage through the detours, areas of lost signal, outdated strategic maps, and course corrections over the next few years. Now more than ever, accessing timely, intelligently designed, and appropriately analyzed data will help CROs confidently deliver on their corporate strategies. 

 is CEO at Industry Standard Research, PO Box 1842, Cary, North Carolina, 

Where do CRO's turn next? What does pharma do about it?

What to Know About CROs

has been publishing articles based on solutions to the tightly regulated and highly competitive clinical trials industry for the past 20 years—the legacy of the industry is now being faced. 

You are probably well aware of the stats that underpin many of the articles, news stories, and presentations surrounding the clinical trials industry specifically, and drug development in general. For instance, how much is the cost of clinical trial delay is to a pharmaceutical company ($600,000 to $8 million). The average per patient cost in a Phase III trial for one year ($28,500). How much Phase III work is outsourced to CROs and service providers (54%). How much of a clinical trial budget is spent on subject recruitment (32%). What is the likelihood that a drug will reach the market from an IND (1 in 5,000). Taken separately, the stats drift around as big numbers. Taken together, what they mean is an unsustainable situation.  

In response to its own challenges in the lack of pipeline drugs for development and loss of revenue from drugs coming off patent, pharmaceutical companies have turned to mergers, acquisitions, cutting jobs, and outsourcing. In response to that, CROs are trying to become more proactive partners to its clients as both move from transactional to functional alliances.  

Each of these statistics and developments has its own list of sub-challenges as well as proponents for change. Minor change or systemic change within the industry is needed. And it is in this industry backdrop that late last month, 25 leaders from the clinical development operations sector convened in a private roundtable to discuss current major issues affecting their business. The Linking Leaders roundtable,* held quarterly with this being the fifth such gathering for the clin ops sector, took up the following topics in a day-long open dialogue:  

The effect of changing sponsor-provider partnerships

How the increase in outsourcing has effected sponsor oversight responsibilities

Improving site performance through site management

To get some insight into the roundtable, 

interviewed four participants prior to the event. We uncovered some great ideas for small changes, as well as those that would mean change to the whole system. 

"For me, the most interesting is the topic around building partnerships with external vendors and CROs," said Andrew Lee, Deputy Head of Clinical Sciences and Operations at Sanofi. "This is a major trend in the industry. We're all going down this path of selecting preferred providers and taking that from a provider sort of relationship into a strategic partnership. So it's an evolution and it's taking up a lot of resources and new modeling in the industry." While Lee says that this topic has been discussed at this venue before, as well as many others, there are certain components that need to be addressed. First, the mechanical component that requires shifting resources from within large organizations into a flexible or variable resourcing model with external partners. Lee says that this is a fundamental but not trivial event because "managing human capital transfers is not easy." 

The second component is behavioral and includes three other segments:   

Does the partner have the expected capabilities, such as geographic spread, skill, expertise, and competence? 

How do you build an alliance to achieve a win/win relationship?

How do you extract a value that is valuable for the sponsor as well as the CRO or vendor?

In that value exchange, Lee says, "We're looking at that from both sides. So the CROs are looking for that and so are the sponsors. And the Holy Grail is how do we make this more valuable and see that our investment returns more than if we did this alone?"  

In the end, Lee believes that none of the relationships that are formed between sponsors or CROs are inherently difficult if you have trust and understanding. 

For Mitchell Katz, PhD, Executive Director, Medical Research Operations at Purdue Pharma, risk-based monitoring is a key discussion. "That's an area that is really new to the industry. People are not really sure how to approach it—from their perspective, what's the right balance? And how to have a hands-off approach, yet stay involved in the program. Also, how to look at information and take advantage of the technology that might be available for us to continuously look at the data and the quality of data at these investigational sites." 

For decades, most sponsors have conducted on-site monitoring visits every six to eight weeks with the goal of 100% source document verification, for all of the data, on all of the subjects. In its guidance document released in August 2011, the FDA put forth its thoughts on risk-based monitoring as a way to create a monitoring plan, as well as determining centralized monitoring over on-site monitoring needs. As far as the hesitancy of industry toward adopting a risk-based monitoring approach because of FDA concerns, Katz believes this guidance is an opportunity for industry to make a change.  

Said Katz, "Historically, we always looked at monitoring as something you had to do on a routine interval for any program. And it's extremely costly. Yet it's known that the increased frequency in monitoring doesn't necessarily deliver better quality. So how do we manage quality in such a way where we're not separating ourselves from the study, but we're intimately involved in the nature of the patient information that we're capturing?" 

Katz views this discussion as an opportunity for industry to standardize approaches by leveraging each other's experience and expertise as organizations.  

"Individually, our organizations are very used to the old way and change doesn't come easy within organizations' leadership. People who experience successes are okay with doing it the old way. And what we need to do is introduce change," said Katz. 

Craig Wozniak, Head Americas Region, Clinical Operations, at GlaxoSmithKline, is focused on how sponsors can help sites be more productive and drive better quality. "I think it's important for us to share what our approaches are for site selection, qualification, training. Are there some new models or methods that people are using to try to improve that?"  

But aside from sharing and having site representatives at the roundtable to offer a different perspective, Wozniak is a firm believer in the need to look inwardly. "We have to look at what we're designing in terms of protocol, materials, instructions. If you hand somebody something that's not simple or not clear, then it doesn't set it up for success," said Wozniak. 

Unlike an area of clinical operations that has a specific regulatory piece around it like risk-based monitoring, improving the site management and productivity is an ongoing process, explained Wozniak, one that may not necessarily be unique and is related to the dynamics of conducting research. One example would be engaging with investigators, which is done continuously, and on a global basis. In this way, the processes are similar, such as making sure to take into consideration their regional differences or cultural norms. Said Wozniak, "It's not something that there will be a start and an end. I think there's a totality of looking at the opportunity that needs to be done." 

As one of the few CRO participants in the roundtable, Adrian McKemey, PhD, Managing Director, The Consulting Group at Quintiles, offered a different perspective not only because he is with a CRO, but because he spent many years at Boston Consulting Group. And as McKemey explained to 

his position in Quintiles' consulting is to help sponsors see what the next model is going to be beyond the current CRO model. He gives advice to help sponsors anticipate and adapt to the future, which is very separate from the clinical operations arm. 

So for McKemey, the connections between the major topics covered at the roundtable and what it means to the clinical trials industry is most interesting. He said he looks at this meeting as "a grassroots movement to dispense with much of the idiosyncratic behavior across companies that's getting in the way of being more efficient." And to do that, one has to look at the big picture, or in McKemey's words, big data.  

"What makes all of these topics—pressing the reset button on monitoring; pressing the reset button on regulatory oversight; pressing the reset button on investigators, or on how one handles one's relationship to CROs—the common theme that makes all of those conversations possible is data," said McKemey.  

In comparison to other industries that have already tackled the big data issue in previous years, such as financial services or consumer packaged goods, is that biopharmaceutical operations hasn't looked for the cumulative intelligence across companies, geographies, or phases to get to the next stage. Said McKemey, "Although few could exceed [biopharma's] excellence on the science and biostatistic side, we do everything in a very anecdotal kind of way. Whether it's choosing investigators or a CRO partner, deciding how to represent what we're doing to the agency, everything is created de novo."  

To that observation, the two current changes that will be leveraged are: real standards being applied to data which allows all these disparate silo sources of data to be conformed and looked at in aggregate for pattern recognition and trending across them; and the grid or cloud computing approaches that are being applied to big and complicated data. 

To relate this data to a topic at the roundtable, McKemey chose the site, and specifically, investigators. Institutions and CROs have used investigators as a proprietary and competitive advantage. "Turns out when you actually do the analysis—all the sponsors are working with the same investigators. There are very few who are unique to one particular company." 

Because of this and the lack of standardized data, McKemey says that when a sponsor looks at a particular investigator set or when they're trying to find them, they're missing out on 90% of the experience that the industry has with an investigator. "And that just gives you a massive liability because that's the person who's going to recruit your patients, it's a person that's going to keep your trial on time, it's a person that's going to decide how clean your data is, and we're selecting them with very partial intelligence," says McKemey. 

For McKemey, the solution is obvious. Take the so-called competitive advantage out of the picture. "Let's not see it as a competitive advantage. Let's see, in fact, it being a disadvantage that we're not sharing our cumulative experience. Let's put all of that information in one place." 

Not only would the elimination of this de rigeur competitive advantage change the industry through the sharing of big data, but the working together to streamline and or standardize the practice of clinical trials could eliminate costs and truly re-invent the industry. McKemey uses the airline industry as an example. 

"Last time you got on an airplane, you went through security and, got onto the plane and the pilot was there clicking switches above the cockpit console. And you probably would be hard-pressed to remember which airline it was because they have conformed everything it takes to get on a plane and be stewarded to a destination by a pilot. And they're competing on something different. They're competing on routes or they're competing on frills, but they're not competing on the basics. They've stripped all of that and said, "Let's make it all the same. Let's share all of that infrastructure." 

In comparison, the biopharma industry is not conformed. Says McKemey, "When you start a journey of a patient going into a trial, you know, being taken on that journey by an investigator who's looking after their passage, it's different every single time. The way sites are selected, the way the patients get enrolled—so much of the process is done in a particularly unique, bespoken, customized way that needn't be." And these unique ways impose a lot of time and money into the system. "Every single way of engaging a biopharma company is different. It's exhausting," says McKemey.  

And in particular to the investigator issue, with the well-known decline in the number of investigators engaged in clinical research contrasted to the increase in requirements from the industry, McKemey says is a recipe for disaster. The investigators are a shared, highly specialized resource on which everyone relies but nobody has accountability to sustain. And that, says McKemey is destroying the resource. However, he does see that changing in the near-term. Through discussion at roundtables, as well as creating pre-competitive alliances around investigators, and using the big data to have a cross-company perspective on the entire global investigator population, will offer a window into the capabilities; as well as performance. "And for those that are performing in the bottom quartile, they'll be able to make investments to increase sustainability of those researchers staying involved with developing new medicines. Because it's a finite population. You can't afford to have the massive churn rate of investigators at the moment to find a way to sustain those and a good potential but find the economics or the process too confusing." 

As these clinical development operations executives noted, meetings like these facilitate solutions and keeping on top of industry trends. As Lee said, "I think we've all realized that operational excellence is not an issue of intellectual property. This is something we all struggle with. And if we work together to solve the problems, we have a much better shot at being better as an industry. Our industry is under pressure. It's not our companies. We're all under intense stress. So if we work together to solve these problems, we have a much better shot at solutions." 

For more discussion with Andy Lee on these current operational challenges, register for our free live webcast "Top of Mind for Clinical Development Operations" on Wednesday May 23, and on-demand after that, 

 would like to thank Lesly Atlas and Pam Sobotka, the founders of Linking Leaders, for allowing us access to interview members of their Clinical Operations Roundtable. This network provides clinical trials executives with a unique interface to share insights and experiences, benchmark progress, and collaborate on solutions among a group of influential peers facing shared industry obstacles. Their boardroom-style roundtables, hosted on a quarterly basis, offer participants exclusive access to the latest thinking and full-day, intensive networking and idea exchange. Atlas and Sobotka have over 20 years combined experience in collaborating with senior-level clinical development operations, outsourcing, quality and CRO executives to develop industry-leading educational and networking meetings. 

 is Editor-in-Chief of Applied Clinical Trials, e-mail: 

Roundtable explores relationships, outsourcing, risk-based monitoring, and site performance.

Applied Clinical Trials Supplements-05-01-2012

Top of Mind for Clinical Development Operations

CRO Timeline 1981-2012

Outsourcing Landscape

What to Know About CROs

Affecting Real Change