Outsourcing Strategies and Practices to Improve Efficiency and Performance

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Applied Clinical Trials

Demand for outsourced services to provide clinical development capacity and expertise has grown substantially over the last 10 years.


Demand for outsourced services to provide clinical development capacity and expertise has grown substantially over the last 10 years. At the same time, the structure and nature of outsourcing relationships continues to evolve, with increasing demand for strategic and more integrated alliances. In theory, through shared governance, systems, and more extensive involvement from planning through execution, integrated relationship structures offer improvements in efficiency, development speed, and cost compared to the more traditional transactional relationships.

Recent studies examining the effectiveness and performance of integrated relationships, however, offer mixed results about the impact and satisfaction with integrated relationships.1,2,3

In 2012, for example, Tufts Center for the Study of Drug Development (CSDD) examined change orders associated with various outsourcing relationship models utilized. Clinical teams evaluated the frequency of change orders, or formal written changes, to the original scope of work agreements in clinical studies.1 The budgets of these studies were primarily allocated to contract service providers. Tufts’ CSDD researchers expected that studies managed under functional service and integrated alliances would have fewer change orders as parties share in planning and governance and contract research organizations (CROs) have more autonomy in this partnership. Tufts CSDD, however, found no differences in the frequency of change orders between traditional, transactional relationships, and strategic relationships.

 A study conducted by The Avoca Group (2013) found that respondents from sponsor organizations were less satisfied than CROs in a few key areas including relationship quality, communication, and meeting expectations.2 In addition, a sponsor-CRO collaboration study by Vantage Partners (2013) revealed a number of areas that contribute to sponsor-CRO relationships that are performing well below expectations in terms of cost, quality, and efficiency.3 Sponsors report requiring more time and resources for about 70% of trials conducted with CROs while CROs indicated that more-out-of-scope work, typically under fixed-fee arrangements, is not yielding additional compensation and is driving profitability downward.4

Sponsors and CROs remain committed to refining their strategic and integrated relationships. To inform this commitment and gather insights into priority refinement areas, Tufts CSDD-under an unrestricted grant from Biogen-conducted a survey of biopharmaceutical companies to understand their current use of CRO alliances and their level of satisfaction with them.

Study methods

Tufts CSDD established a working group of 10 companies from the top 50 biopharmaceutical companies to collaboratively frame the study and develop a data collection process. A survey was distributed to all participating companies through an e-mail link using Qualtrics survey software. The survey was designed to gather both qualitative and quantitative data. The qualitative section focused on respondents’ perceptions and experiences with regards to the effectiveness of outsourcing strategies and practices used by their organizations. It also examined organizational systems and processes that have been implemented in order to strengthen relationships and operations.

The survey also gathered robust quantitative data characterizing CRO partner use on actual clinical studies. Participating companies provided detailed data on the use of CRO partners, by individual functional areas, for 56 studies, across a broad range of therapeutic areas. We examined services outsourced across studies as well as the type of relationship models used for each functional area supported by outsourced services. Definitions of outsourcing relationship models were agreed upon by the working group in advance and included niche, full service, functional service, and alliance providers (see Figure 1).

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Tufts CSDD also measured the impact of outsourcing relationship strategies on a number of performance and quality variables, including planned to actual study start-up cycle time; planned to actual study conduct cycle time; planned to actual study close out cycle time; screen failure rates; dropout rates; change orders; protocol amendments; CRO audits; and queries per thousand clinical data points. Other key issues that were explored in the survey through examining respondent perceptions included examining criteria used to evaluate a potential CRO partner and those qualifications that determine the selection of a partner. Participants reported key performance indicators (KPIs) used to measure the effectiveness of their outsourcing collaborations.

Practices that organizations have used to contain costs and improve quality and operations were also examined. These areas included cost comparisons made between in-house and outsourced studies, and the use of quality agreements and their perceived effectiveness in establishing clarity on milestones and overall scope of work. Incentive mechanisms and penalties and their impact on performance were also evaluated.

Operational issues were explored in the survey, such as type of standard operating procedures (SOPs) that are implemented by organizations and overall effectiveness of steering committees in supporting the work of cross-functional teams. Additionally, the use of technology was investigated, including which systems are most commonly integrated and shared among organizations, as well as the challenges to integrating technology.

Tufts CSDD implemented data collection activities among participating companies during the spring of 2014. Company representatives occupied diverse roles and included senior level managers (e.g., directors of global outsourcing or vendor management), clinical team members and middle level staff involved with procurement and project management. All participants were instrumental in evaluating outsourcing at their organizations.




Perceptions and attitudes about outsourcing practices

In exploring the strategies used to evaluate a potential CRO partner, Tufts CSDD found that a formal RFI (request for information) was the most commonly used method (33.3%), closely followed by quality assessments (27.8%). The top initial qualifications in determining whether to work with a CRO partner were global access (15.4%), therapeutic expertise (15.3%), and prior experience with a CRO (15.3%). Other criteria mentioned were strategic fit of an organization (11.9%), staff background and experience (10.2%), financial stability of a potential partner (10.2%), and cost (10.2%) (see Table 1). Cycle time metrics that organizations reported using to measure relationship effectiveness included last patient visit to database lock, enrollment, and study start-up. Although these metrics are typically used, respondents did not offer a strong endorsement of their utility. One respondent indicated that these were “very effective” at measuring relationship quality, while five companies indicated they were “somewhat effective,” and three company respondents were unsure.

Very few respondents indicated that they evaluated the costs of conducting studies internally compared with outsourcing them, also referred to as “make vs. buy assessments.” Of the four companies that indicated they conduct these assessments, three indicated that they were “moderately valuable” and one reported that they were “not very valuable.” One respondent offered insight on the value of these cost comparisons:

“How to use information from the make vs. buy analysis is still being determined. Many think outsourcing decisions can be made based on this type of analysis in silo; however, others feel these analyses are directional in nature only and should not drive strategic decisions.  Quick cost comparisons are done to give teams an idea at the onset of the studies, but formal analyses have not been routine.”

Another shared that these assessments were conducted to simply gain an understanding about cost differences rather than to make strategic decisions:

“A rough assessment on the cost of running studies internally and outsourcing trials across a standard set of trials to better understand the cost differences in general. However, the analysis is not performed on a study by study basis to determine whether or not a study should be outsourced.”

The majority of companies reported using quality agreements, although perceptions about their effectiveness were mixed.  Respondents were equally divided as to whether these were “somewhat effective” or “not very effective” while one indicated that they were “not sure.” One respondent indicated that “quality agreements get lost as part of the contract. Often it is something negotiated quite early but never referenced again during the project.” Another shared that “quality agreements allow an easier flow of information and information-sharing between sponsors and CROs.”

In a similar fashion, although most participating companies used incentives for project milestones delivered on time (35.3%) or for quality of project milestones (29.4%), respondents indicated these were either “somewhat” (n=5) or “not very effective” (n=4). Respondents held similar viewpoints about penalties. The types of penalties were either no repeat business (31.8%) or renegotiation of the contract (removal of services or transfer of services) (22.7%). These, however, were regarded as either somewhat effective (n=2) or not very effective (n=5). (See Tables 2 and 3)



Usage of CRO Partners on Actual Studies

The analyses focused on 43 Phase II and III studies since Phase I studies are differentiated from later stage clinical trials. Tufts CSDD examined the incidence of services that were outsourced for each of the Phase II and III studies evaluated. Nearly all (95%) of the studies outsourced site monitoring, and 86% outsourced site identification and selection. The majority of studies also outsourced data management (80%); medical monitoring (73%); patient recruitment and retention (68%); and statistical analyses (63%). 

Although each sponsor company had entered into several strategic, integrated full-service relationships at least three years ago, Tufts CSDD did not find one CRO responsible for managing all functional areas supporting an individual Phase II or III study. Internal staff typically managed protocol design and regulatory affairs functions, with less than one in five supported by a transactional or strategic outsourcing relationship.




Site management and study monitoring functions showed the highest incidence of outsourcing. These functions were supported by transactional relationships that ranged from 40% to 50% of studies. Strategic relationships were used for 25% to 40% of all studies.

Outsourcing relationship models used for data management and dossier creation and submission were the most varied. For the majority of studies, internal staff was used to support medical writing and regulatory document submission preparation. Data management and statistical analysis functions, however, used outsourcing relationships extensively. Approximately 40% of all studies used transactional outsourcing relationships, and between 25% and 40% used strategic outsourcing relationships.

Clinical research studies conducted by the same sponsor company varied in their use of relationship models. One company, for example, used in-house staff, transactional (full-service provider), as well as strategic relationships on each study to manage the site monitoring function. Another company alternated between transactional service providers and a strategic partner to provide statistical analyses. The same variation in outsourcing relationship usage was observed in site identification and management and in data management functions.

Tufts CSDD found only two statistically significant differences for performance and quality measures between studies managed by transactional versus strategic and integrated relationship partners: the number of screen failure rates was higher among studies managed by strategic outsourcing relationships (mean difference 0.133; standard deviation 0.22, p<.03); and the frequency of protocol amendments was lower among studies managed by strategic outsourcing relationships (mean difference 1.28; standard deviation 2.01, p<.02).

Changes to improve effectiveness

Perceptions about the efficacy of steering committees were mixed. While an overwhelming majority implemented steering committees, five regarded operational steering committees as “somewhat effective,” and four indicated that executive steering committees were “somewhat effective.” One respondent related that steering committees had “proper representation of functions and levels,” and another indicated that there was “deep and broad engagement from both partners, timely follow-up, and good use of metrics.” The challenges were reflected by another participating company representative who reported that “there is a poor communication flow from the operations steering committee to operational teams conducting the study.” One participant felt that “agreements made and supported by steering committees are not always communicated downward to the staff responsible for the deliverables.” Steering turnover rates were variable, ranging from no turnover to more than 50% of steering committee staff being replaced across six organizations reporting.

Future outlook

Tufts CSDD explored the use of technology and integration of systems between sponsors and CROs. Respondents forecasted that systems that could potentially be integrated in the future included clinical trial management systems (27.3% of mentions), document repositories (18.2% of mentions), and other systems (18.2% of mentions). Less common mentions included electronic trial master files (eTMF), safety data, interactive voice/web response technology (IVRS/IWRS), and workload planning. Respondents shared their perceptions about the challenges of integrating systems with their CRO partners. In addition to technical challenges, time and costs were also perceived as barriers. One respondent indicated that “in order for the CRO to operate within their own process and standard operating procedures, there can be duplicate efforts.” Another commented that “CRO partners generally have their own systems, and it is much easier to use their products than it is to integrate systems.” Other areas of challenge included firewalls, gaining access to each organization’s systems, and willingness to let go of existing systems.

Overall, participating companies expect to increase or maintain their level of outsourcing and their use of integrated relationship structures. Eight companies indicated that outsourcing would either increase or remain the same for 2014. Only one respondent indicated that outsourcing would decrease.


The results of this study suggest that outsourcing relationship model use is highly variable and inconsistently applied across organizational product portfolios. Tufts CSDD analyses revealed use of in-house resources in addition to strategic and transactional relationships that varied from study to study within organizations. And, between organizations, the use of integrated alliances was not uniform.

Strategic integrated alliances do not appear, as yet, to measurably impact performance or efficiency. The highly variable and inconsistent use of strategic alliances is likely creating friction and inefficiency within the organization that is challenging the conceptual benefits of such a relationship structure.

Tufts CSDD found that site management and monitoring were the most frequently outsourced functions while protocol design and regulatory affairs tended to be managed internally. These results are not surprising given organizational concern with safeguarding their intellectual property that the use of outsourced services was the most variable for data management and dossier creation.

Although the use of outsourcing is widely accepted across the biopharma industry, the current results can be seen as highlighting the opportunity to apply more of the strategic best practices seen in other business sectors. Both the feedback of participants in the current study, as well as published information about biopharma company outsourcing, demonstrate a lack of standardization in how outsourcing is used and how outsourcing strategy is defined and understood. Given the inefficiencies inherent in this approach, it is not surprising that many respondents in the current study did not perceive outsourced relationships as contributing in ways that exceeded expectations.

Results of the current study indicate that site management, monitoring, and data management are still the most frequently outsourced activities. This is not surprising, considering that each of these areas offer a long history of practice as well as highly reliable measures of quality and success. The challenge for sponsor companies is to rapidly create robust mechanisms that will allow them to develop analogous oversight mechanisms for those services that have traditionally been held “close to the vest.” While it may be possible, despite challenging financial considerations, to maintain adequate sponsor resourcing for these more strategic kinds of activities, the constantly evolving regulatory and global environment will likely render it inefficient for all but the largest sponsors to have in-house expertise in all the critical areas of drug development.

As an organization that has invested heavily in change management in order to support its commitment to a strategic outsourcing relationship, Biogen can attest to expectations and perceptions being key drivers of eventual success. One of the areas where both sponsor and CRO have had to work hard at “upscaling” the mindset is that of the CRO’s ability and empowerment to contribute to strategic decisions. Biogen has found that it is not enough to encourage sponsor personnel to solicit and rely on CRO expertise-it is also critical to regularly remind the CRO, at both the governance and project levels, that they have accountability for bringing the right personnel, with the right knowledge and skills to the table in a very timely fashion. 

Biopharma companies must embrace and facilitate CRO involvement and empowerment at the strategic operating level before the full benefits of integrated outsourcing can be realized.   

Mary Jo Lamberti, PhD, is Senior Research Fellow, Tufts CSDD; Frances Grote, MBA, is Senior Director, Clinical Vendor Management, Biogen; Murray A. Abramson, MD, MPH, is Vice President, Clinical Operations, Biogen; Kenneth Getz, MBA, is Director of Sponsored Research Programs and Associate Professor, Tufts CSDD



1.     Kaitin KI, editor. Outsourcing to maximize clinical trial operating efficiency.  Tufts Center for the Study of Drug Development R&D Management Report. 2013 Oct; 8(4).

2.     2013 Avoca Report. Sponsor and Provider Perceptions on Managing Clinical Development Risk. Executive Summary.

3.     Sponsor-CRO Collaboration Study. Vantage Partners 2013.

4.     Schmidt W, Uydess I.  Smart Outsourcing: Strategic Alignment, Risk Management, and New Relationships BiopharmaInternational.com, March 2, 2013 http://www.biopharminternational.com/smart-outsourcing-strategic-alignment-risk-management-and-new-relationships?id=&sk=&date=&%0A%09%09%09&pageID=3 Accessed January 30, 2015.

5.     Henderson, L. The State of CRO and Sponsor Relationships, October 1, 2013, appliedclinicaltrialsonline, http://www.appliedclinicaltrialsonline.com/state-cro-and-sponsor-relationships   Accessed January 30, 2015.