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Research shows that the potential of integrated alliances remains elusive in the near term.
"Open integration" has been a primary objective of technology and collaboration adoption for more than five years. Recent research from the Tufts Center for the Study of Drug Development (Tufts CSDD) indicates that the clinical research enterprise is far from achieving this objective.
Time-savings, lower cost, and increased efficiency have been the promises of integrated technologies and multi-functional alliances. Ideally, open integration should leverage the benefits of advanced collaborative planning; standardized, compatible, and interoperable systems; accessible and transparent data and information; shared governance, risk, and operating practices; dedicated staffing and reduced numbers of sponsor staff overseeing execution.
During the past five years, pharmaceutical and biotechnology companies have moved to revise and restructure their operating models and introduce new internal mechanisms to facilitate the adoption of open integration. It is estimated that at this time more than 90% of major sponsor companies and 70% of mid-sized companies have entered into at least one integrated alliance with a contract research organization (CRO). But the promise of open integration remains elusive.
The results of several studies published in 2011 and 2012 provided early indications of the challenges in implementing integrated alliances. A study among 89 sponsor companies conducted by the Avoca Group noted that approximately one-third of sponsors found that their integrated alliances were falling well short of performance and cost-saving expectations and nearly half of sponsors did not believe that their strategic relationships would ever achieve the intended outcome. That same study found that one-out-of-five sponsors had already terminated an integrated alliance despite the high cost and labor-intensive investment required to do so.
A study conducted by Vantage Partners among 81 sponsor company representatives and 88 CRO company representatives found that nearly half of integrated relationships were unable to establish a collaborative working style, and failed to align expectations and capabilities. One-third of sponsor organizations reported that their strategic alliances had not delivered expected cost and time savings. Nearly 60% of CRO companies reported that their sponsor partners were unable to work collaboratively.
As part of a broader study, in 2012 Tufts CSDD assessed the frequency of change orders in studies for which the majority of their budgets were allocated to contract service providers. Tufts CSDD hypothesized that change orders—formal, written changes to the original scope of work agreement—would occur less frequently under integrated alliances because the parties share planning and governance, and offer the CRO partner more operating autonomy. The study results showed no difference in the frequency of change orders between traditional transactional relationships and integrated alliances.
Tufts CSDD conducted its most recent study in the spring and summer of 2014. Nine major and mid-sized pharmaceutical companies—each having had a minimum of three years since implementing one or more integrated alliances—provided data on contract service usage for 43 individual Phase II and III clinical studies. For each study, companies indicated whether internal staff or CROs had provided functional support and the relationship model used (e.g., transactional, functional service provider, and integrated alliance).
Participating companies also provided study performance (e.g., start-up time, cycle time, enrollment rates) and quality data (e.g., queries per thousand clinical data points collected; number of protocol violations; number of change orders) for each individual study to determine if the outsourcing relationship model used had a measurable impact.
The results of the study indicate that sponsor companies are using a variety of outsourcing relationship models to support their studies, mixing and matching the use of internal staff, and utilizing traditional transactional relationships, functional service, and integrated alliances simultaneously. Although each sponsor company had entered into one or more integrated alliances at least three years ago, in no instance did a single CRO manage all functional areas supporting an individual Phase II or III study. The results also showed that sponsor companies vary the types of outsourcing relationship models that they use inconsistently, on a study-by-study basis.
Despite the investment and effort required to identify, select, and integrate their outsourcing relationships, sponsor companies choose to keep all options on the table.
Lastly, with two exceptions, no statistically significant differences in performance and quality were observed between the types of outsourcing relationship used. The number of screen failure rates was higher, and the frequency of protocol amendments was lower, among studies managed by integrated alliances. This suggests that upfront planning and established site relationships supported by these alliances may be contributing factors. No observed differences in cycle time and cost measures, however, indicate that pharmaceutical and biotechnology company inability to successfully implement integrated alliances is creating operating friction and inefficiency.
A study soon to be published by Tufts CSDD found similar results with respect to technology adoption. Despite efforts to implement a variety of technology solutions during the past five years, sponsor and CRO companies participating in the study showed high levels of disparate—and often incompatible—systems use across functional areas. In another Tufts CSDD study, described in a past Clinical Trial Insights column, of nearly 300 approved drugs, those that were developed under a collaborative or shared innovation model (e.g., in-licensing, co-development, merger or acquisition) took 20% longer—an additional 14.8 median months from clinical testing to approval—than drugs whose development program was not shared.
Avoca and Vantage Partners concluded that the primary causes of relationship failure include a long-established culture of mistrust in vendors and service providers and poor communication. The long-held view that CROs are commodity service providers that must be carefully policed and to which some information cannot be shared, is hard to change. The failure to achieve buy-in from senior staff and affiliates and the setting of unreasonable expectations were also cited as factors contributing to relationship failures.
Tufts CSDD found that similar conditions played a role in the most recent study findings. In addition, legacy activity contributed to implementation challenges as sponsors were frequently compelled to entertain entrenched relationship preferences and approaches simultaneously while new models were being implemented.
The size and scale of many sponsor organizations is also a key factor. Highly fragmented companies, many deeply involved in integrating recent mergers and acquisitions, often must accommodate inconsistent practices across functions to ensure that the demanding workload is completed.
A number of sponsor organizations also point to the disruptive nature of internal and collaborative partner turnover—a relatively common occurrence. When key staff leaves the partnership—particularly those involved in critical operating roles and in ensuring consistent practices—old habits and novel approaches fill the vacuum.
A highly risky and demanding operating environment also plays a major role. Aversion to risk entices sponsor company staff to hedge their bets by maintaining multiple contract service providers under a variety of sourcing models.
The conceptual promise of integration remains compelling but it appears to be beyond reach in the near term. Many organizations believe that continuous improvement and refinement in their outsourcing models and technology adoption will help realize the benefits of integration. Some of these improvements focus on facilitating higher levels of operating interdependence where internal staff and their many collaborative partners acknowledge and support clearly defined and delineated roles and responsibilities without necessarily aiming for broad-based systems integration, and consistently shared practices and procedures.
But in the absence of widespread, clear successes and measured return on investment, sponsor organizations and their CRO partners may lose patience. It will become harder to implement refinements and take remedial steps as levels of organizational resistance and fatigue grow. A mix-and-match approach compromises the promise of integrated alliances and reinforces the need to simultaneously accommodate multiple, inconsistent relationship models.
Kenneth A. Getz MBA, is the Director of Sponsored Research at the Tufts CSDD and Chairman of CISCRP, both in Boston, MA, e-mail: [email protected]