Does Size Matter in Partnerships

Applied Clinical Trials

Applied Clinical Trials, Applied Clinical Trials-09-01-2009, Volume 0, Issue 0

An exploration of how a company's size influences partnerships.

When it comes to partnerships there are an array of factors that will effect the relationship—one of them being a company's size. With size as an influence, the question burns, do sponsors seek out similar sized providers?

When we asked our audience this question at appliedclinicaltrialsonline.com, 65% voted yes, only 6% no, and the remaining 30% had never heard of this trend. Now the question turns to, why?

One possibility, according to Denise Calaprice-Whitty, PhD, executive director of The Avoca Group (Princeton, NJ), is that smaller sized sponsors "appear to be substantially less efficient in their management of providers. Top ten companies have more structured strategies and systems for managing providers."

A recent survey conducted by this company asked respondents, "Has your company been successful in forming truly strategic relationships with CROs?" This generated a response of 61% yes from top ten companies and only 31% yes from small, midsized ones.

While first instinct may lead to the belief that larger sponsors receive more attention from providers because they have larger pipelines with greater budgets—and though this may be a realistic assumption—large sponsors will simply always have more resources and manpower to better manage partnerships.

Large sponsors "appear to have more focused outsourcing strategies, more outsourcing tools and templates, and better means of measuring CRO performance and relationships and for sharing this information," Whitty elaborated.

The survey also asked respondents if their companies had a formal set of relationship metrics to evaluate its relationships with clinical service providers and 48% of top ten companies said yes versus 12% of small or midsized companies.

"We have seen that smaller sponsors are more likely to be dissatisfied, as opposed to having neutral feelings" about work performed for them by providers, Whitty noted.

Though evidence of this trend may not be concrete, recent alliances have followed suit: Eli Lilly–ICON, ProTrials–Medivation, and Pfizer–Almac.

In following Whitty's explanation, sponsors must choose a provider based on management capabilities. So, a small or medium sized sponsor should not select a CRO that is larger than itself. Doing so would put the sponsor in a position of biting off more than it can chew and potentially contribute to an unsatisfactory relationship.—Marissa Shapiro