Resourcing and Outsourcing Trends in Drug Development

In June and July 2025, I interviewed 25 individuals in the biopharmaceutical community who either manage teams and vendors or have had influence on resourcing and outsourcing decisions. These included CEOs, CSOs, vice presidents of clinical operations, directors, and study managers.

I asked them about their preferred resourcing models, what models they were currently using, and what their perception of the current outsourcing landscape was. This article will look at the trends and common threads that were expressed throughout these conversations.

In addition, I also spoke with individuals who are part of the outsourcing community including large/mid-sized CROs, boutique CROs, and expert consultants to obtain a more balanced perspective and determine whether they are observing the same trends.

Throughout the article, I will reference ‘Sponsors,’ ‘Biotechs,’ and ‘Pharma’ companies. As a point of clarity, this refers to the aggregated opinions, views, and feedback I received from the individuals I interviewed rather than any official opinion of record by the organizations for which they work.

Overall trends in resourcing and outsourcing

Overall, the individuals interviewed for this article described a shift away from traditional full service CRO outsourcing models and towards more hybrid resourcing solutions. This continues trends published by McKinsey and company in 2022.¹

This shift does not preclude using CROs and most sponsors indicated that they do rely on CROs for many services. However, except for a few pharma companies that continue to use established preferred provider models, most of the interviewees indicated a shift toward hybrid outsourcing models.

They acknowledged the need to use CROs to cover multiple roles but also a desire to keep critical roles either as in house positions or with highly trusted consultants. As part of the conversations, I asked the participants what their experiences were with different outsourcing models and what was driving the trends.

Some traditional CRO models are being questioned

Some large pharma companies are moving back to primarily insourced models, preferring to keep the majority of roles in house. These functions are staffed by either full-time employees or long-term contractors.

This model was perceived as providing improved operational control but that was paired with increased bureaucracy. This model was assessed to provide strong program oversight, but it was not necessarily seen as cost effective.

Preferred partner CRO models are still being used by some of the larger pharma companies. All the individuals interviewed who had experience with this model expressed some level of dissatisfaction with it from an operational perspective.

This model was seen as inflexible and one that created disincentives for team member performance. This was attributed to the fact that winning the contract was a sure thing for the preferred provider CRO and this effectively incentivized complacency in the teams.

Collecting data about actual team performance was beyond the scope of the interviews for this investigation so this assertion is not directly supported by any specific data. However, it is worth understanding what the perceptions of the sponsor companies are irrespective of any specific supporting evidence.

These perceptions drive the communication dynamics between sponsors and service providers. Understanding them more fully is an important step in ensuring the communication between sponsors and CROs is clear and productive.

Sponsor companies using preferred provider CRO models felt that they spent a higher percentage of their time discussing out-of-scope activities and negotiating change orders when compared to competitive bid CRO models. One of the advertised strengths of the preferred partnership model is improved cost containment because rates are pre-negotiated and typically include volume discounts.

This advantage was seen as negligible in practice due to the perceived higher number of change orders that occurred. Change orders were a fairly significant point of concern for some of the interviewees because they were difficult to predict and made accurate financial forecasting more challenging.

For smaller biotech companies with more limited resources, the uncertainty in forecasting caused by change orders introduces significant risk to their development programs. Again, no data were collected during these interviews to support or refute the relative number of change orders occurring in the different models.

Nonetheless, change orders were universally viewed as undesirable and something that strained relationships between sponsors and vendors.

Another advertised strength of the preferred partnership model is the consistency and continuity gained by sponsors when they utilize a single service provider. However, the sponsor teams using this model reported low satisfaction in this dimension.

The turnover for these CRO teams was assessed to be no better than average, which negated any perceived continuity advantage gained by using a single service provider. Overall, the operational leaders interviewed did not agree that the preferred provider model was delivering on its promise of improved operational consistency.

There was a widely shared perception that teams at CROs did not often feel strong ownership of projects. The individuals I spoke with felt more strongly that this was the case at larger CROs, but this perception extended somewhat to smaller CROs as well.

CRO teams were generally given high marks for their understanding of study protocols and study procedures. However, that expertise was not seen as something that extended into the implementation of effective initiatives that could make meaningful differences to accelerate enrollment or resolve operational challenges.

Overall, sponsors felt that CRO teams did not possess strong critical problem-solving skills. Further, they were seen as expecting to be told what to do rather than presenting solutions to sponsor companies.

The interviewees more frequently associated this trait with larger CROs, but it was a fairly consistent throughline for all CROs and was reported in several of the interviews.

Larger CROs were perceived by biotechs to have a higher proportion of junior staff assigned to teams. This factor may be linked with the previously discussed perception of less developed critical thinking skills, as these types of skills are learned more through on-the-job experience rather than something that can be easily taught in a workplace training environment.

The more junior staff were perceived to be less professional and less mature in the way they presented themselves to both the sponsor and research sites. This perception seems unsurprising as professionalism tends to develop with experience; however, it was still a concern for multiple respondents.

There was also some agreement that junior staff were not typically fully self-aware about their own knowledge gaps. One interviewee observed that junior staff often seemed impatient to be promoted, which suggests their perceived degree of mastery exceeded their demonstrated mastery.

It is important to note, however, that all experienced drug development professionals started somewhere and were once inexperienced and untrained. There is an urgent need to recruit and train talented staff who have less experience and provide appropriate training in order to support ongoing research.

Large CROs have a history of fulfilling this need, and it is vital to the industry. Based on the feedback received for this article, sponsors would like to see more effective training for new staff, especially around Good Clinical Practice and soft skills, but this shouldn’t be mistaken as a mandate that only experienced staff are acceptable.

It was generally acknowledged by the interview participants that having some proportion of less experienced team members is both expected and reasonable as long as appropriate training is in place.

It was observed that some activities at CROs, especially larger CROs, were overly structured to the point of feeling like they were meaningless check-box activities. One example cited by a sponsor was the weekly team meetings run by their large CRO.

They indicated that the meetings were very rote and didn’t effectively address the sponsor’s concerns. Further, the meetings were seen as a significant driver of costs because some of the team members who attended every call were not needed.

This included senior content experts that presumably had a high bill rate in the budget. The biotechs generally preferred more streamlined project updates that focused on presenting issues and solutions over a perfunctory reading of the status of every activity.

Pricing remains a key factor in outsourcing decisions

Several of the sponsors interviewed observed that larger full-service CROs are less cost effective for functions such as database administration and Trial Master File (TMF) management. Multiple individuals observed that they were able to save several hundred thousand dollars by switching database management or TMF services from a large CRO to a smaller bespoke vendor for these services.

The boutique vendors were seen to have both more flexibility in the pricing structure they were able to offer as well as flatter organizations with less overhead.

The pricing structures offered by larger CROs were almost universally seen as far too high and not practical for smaller biotech companies. There was a perception at the small biotechs that larger CROs have inflated their margins because larger pharma clients are willing and able to absorb those costs.

Additionally, they thought that when CROs see enormous funding rounds by small biotechs they feel justified in implementing more significant profit margins for themselves. This perception by the interviewees was speculative, and no direct evidence of this type of motive was offered.

Nonetheless, the biotechs who expressed this view did have an acute awareness that even a $10,000,000 raise represented only a fraction of what is needed to get a drug to market. This perception was coupled with a dissatisfaction with how these CROs engaged with small biotech companies who felt that they were viewed as commodities rather than partners in research.

It is important to biotech companies that collaboration on a program be treated as a relationship rather than just a contract. When the sponsor/vendor relationship becomes too transactional that is seen as undesirable.

The feedback I received from CROs acknowledged the challenges around pricing. They stated a desire to provide good value to sponsor companies while balancing their own business objectives for returning a profit.

The CROs pointed to cost efficiencies that sponsors don’t often leverage such as optimizing protocol design to control costs. For their part, CROs expressed an interest in partnering with sponsors sooner to help implement these types of efficiencies.

Experience and quality of teams matter

The importance of the quality of deliverables was frequently repeated throughout almost all of the conversations I had for this article. One respondent specifically indicated that they would be willing to pay a premium for the right team that could deliver high quality.

However, although sponsors were very interested in having an assurance for high quality that was not typically consistent with what they were experiencing. One expert interviewed specifically called out what they saw as a lack of understanding of quality and GCP regulations at the CROs with which they worked.

This trend was worrisome, especially when it was observed on clinical research associate (CRA) teams who are charged with ensuring that those principles are being followed at the sites. Although CROs do require and document GCP and quality training for their teams, this feedback suggests that some of these trainings may not be fully delivering the desired outcomes.

There was also repeated concern that less experienced CRAs on the project teams did not focus their attention on critical safety and data quality tasks. Instead, they tended to focus more on accurate transcription of data and the logical consistency of the data.

The impression was that this strategy provided less value to the sponsor as those types of checks could be better addressed by data management and stats groups. It is, again, worth mentioning that CROs do provide and document training for their CRAs, which presumably includes effective monitoring strategies.

The experience of the team assigned to a project was seen as a critical factor in their performance. Most of the individuals interviewed acknowledged that good teams with highly experienced members can be found at CROs of any size.

However, large CROs were generally seen as less adaptable and a poorer fit for small biotechs. A common grievance expressed by small biotech companies is the assumption that they will not get the most experienced team if they use a large CRO.

They believe that even if a strong team is presented at a bid defense meeting that this will be either a bait and switch situation or that the most experienced team members will have a short tenure on their program as they will quickly be promoted or reassigned to more lucrative contracts with larger pharma clients. This was a concern for biotechs because it created a lack of consistency in the study team.

This inconsistency, in turn, led to lower quality in operational execution and study deliverables. It also meant that there could be a deficit of institutional knowledge for the overall history of a program that may lead to potential issues during a regulatory inspection.

A relevant example of this, from my own experience, occurred during an MHRA inspection that was being conducted as part of a New Drug Application. Holes in the story boards created by high team turnover were a significant finding during the inspection. This required a substantial effort on the part of the sponsor to address and created uncertainty in the approval process.

It is important to highlight that CROs do agree with the need to reduce turnover and are fully aware of the risks associated with it. Based on my own experiences working at a CRO and based on conversations I had with CROs for this article, staff turnover is seen as highly undesirable by CRO leadership.

Efforts to try to control and reduce turnover are actively pursued. However, for publicly traded CROs and CROs with significant private equity backing, it can be incredibly difficult to manage.

Executive leadership teams at these companies have a primary obligation to their investors and those goals are not always aligned with employee satisfaction and retention. An example of this can be seen when a publicly traded company is quick to lay off staff to protect their profit margins.

This is understood by the employees who don’t have any expectation that a company will be loyal to them. Consequently, the employees themselves don’t feel obligated to return loyalty and, for their part, they are quick to jump to another company that can offer them better compensation.

Privately held smaller companies, like many boutique CROs, were seen as having an advantage in terms of staff retention. This perception makes sense as these companies do not necessarily have a board of directors to whom they must answer.

Consequently, they are free to prioritize staff satisfaction and meaningful employee retention strategies.

Large CROs present strength in multiple areas

Even smaller biotechs who stated a strong preference for using consultants and/or small boutique CROs acknowledged that for large international Phase III trials, they rely on big CROs for the management of those studies. There was also an acknowledgement that smaller CROs don’t always have the appropriate resources in place to move quickly.

Large CROs were seen as having a strength in being able to assemble rapid response teams, especially CRA teams, very quickly. Boutique and smaller CROs tended to have fewer full-time resources on staff and required additional time to increase their staff.

This means that they were slower to react to urgent requests for more resources.

Large CROs were also seen as having a significant strength in being able to provide seasoned subject matter experts. Although these experts were not typically individuals that sponsors could work with on a day-to-day basis, the ability to access them when needed was seen to add real value.

A preference for small to mid-size CROs when possible

The plurality of the small biotechs interviewed indicated a preference for hybrid models and the use of smaller boutique CROs for smaller studies performed in a single country. The quality of the deliverables at boutique CROs was assessed to be higher than the quality delivered by larger CROs.

However, it was generally acknowledged that not all smaller CROs delivered the same level of quality and finding a good cultural fit was important.

The level of engagement and personalization from the business development teams at boutique CROs was perceived to be higher. For small biotechs, this added value and was especially appreciated by some ex-US biotech companies.

Biotechs in smaller European markets that had lean staffing relied on the feedback of their small CRO business development director and the CRO’s subject matter experts to help inform their strategies. These sponsors also indicated that using a full-service CRO was an attractive option for them if they were located in a region where it was challenging to attract appropriate talent locally.

Smaller CROs were observed to have their own unique set of risks, including being acquired by a larger competitor. Although mergers and acquisitions in the CRO market were acknowledged as inevitable the sponsors I spoke with stated a strong aversion to them.

Multiple sponsors shared their experiences dealing with CRO mergers and the negative effects these had on the quality of their ongoing projects. This was assessed to be driven by the priorities at larger CROs, especially those funded by private equity, to be more concerned with containing costs over delivering quality.

A culture of change order management at CROs

Excessive change orders implemented by CROs was seen as a significant risk for drug developers. The size and timing of change orders is hard to predict.

They impact the ability of biotechs to accurately forecast their costs and they can have an outsized effect on financial runways. Additionally, respondents said that in their experience, CROs were generally not open to having meaningful discussions about how budgets could be optimized with an emphasis on reducing potential change orders.

CROs tend to be incentivized to be cost aligned with their competitors because this is essential to winning new business. CRO bids that are price outliers, either too high or too low, can be viewed as more inaccurate by sponsors and that can cost the CRO business, even if, in the end, they presented the most accurate pricing model.

The critical role of expert consultants

The use of expert consultants was seen as critical, especially at smaller biotechs with lean staffing models. Early in the development cycle, before a CRO can even be considered, having an SME consultant for areas such as regulatory strategy and program management were seen to add significant value.

However, the use of consultants was not seen as a replacement for using CROs. Most small biotechs interviewed felt that they lacked the internal bandwidth to manage larger teams of consultants and contractors so there are still a lot of core functions that require outsourcing to CROs.

Consultants were seen to have a higher degree of engagement, enthusiasm, and ownership when compared to teams at CROs. Consultants and independent contractors were generally seen as more flexible and able to respond in real time to requests made by sponsors.

They could quickly assess how many hours a request would require and provide a commitment in real time. This made the costing and forecasting easier for sponsors.

CROs were seen to be less flexible in this dimension. Requests tend to require approval from senior management or CRO leadership, leading to larger than expected change orders and delays in implementation.

This was viewed negatively by most of the biotech experts in the survey who valued speed and flexibility.

Although most of the sponsors interviewed expressed high levels of satisfaction with their consultants there were some observed weaknesses as well. There were multiple reports of consultants not always pushing strongly enough to advocate for the solution that they felt was a best practice in their area of expertise.

Rather, there was a tendency to express their positions as recommendations only. This leaves the door open to interpretation.

One program director indicated that this approach felt incomplete. It muted the authority of the consultant’s advice, which led to company priorities not being aligned with best practices.

In a similar vein, it was observed that consultants with a high degree of specialization and expertise did not always provide recommendations with enough background information to allow decision makers to effectively act on their advice. Small biotech companies are often in a position of not knowing what they don’t know, which can make it difficult to formulate the correct follow-up questions to ask when advice lacks appropriate background context.

One respondent also indicated their expectation of a good balance between subject matter competence and soft skills. SME consultants were singled out as having a higher probability of being prickly or overbearing.

These individuals were seen as less effective than consultants who exhibited more polished communication skills.

Critical roles kept in house

It was generally acknowledged that whichever resourcing/outsourcing model was used that a strong internal program director to manage the teams was essential. This role may be an internal resource, or it may be a highly trusted expert consultant that essentially operates inside of the company.

It was seen as crucial that this person should be highly invested in the company’s outcomes and would generally be included on inside communications. Other roles that were often prioritized as being important to keep in-house included regulatory strategy and medical oversight as these can have a significant impact on a program’s success.

Conclusions

Overall, the plurality of the sponsors who were interviewed expressed a preference for using a hybrid resourcing model. Leadership and critical functions, such as program management, regulatory strategy, statistics, and medical/safety oversight, were often either kept in-house or were staffed by highly trusted consultants.

CROs continue to be used to cover multiple core functions including project management, data management, TMF maintenance, safety, and medical writing. It was generally acknowledged that there is enough complexity in clinical research that using a CRO to cover multiple functions adds value as the internal staff did not have sufficient bandwidth to manage everything that needs to be done.

Sponsors are looking for cost-effective solutions that place an emphasis on the quality of deliverables. Although it is widely accepted that speed to market is critical in drug development, none of the individuals interviewed for this article specifically identified speed as the most important attribute desired in their outsourcing partners.

Interestingly this is not entirely consistent with my own experience working at a large CRO where it was often the case that sponsors would prioritize speed to achieve short term goals. Nonetheless, the feedback I received for this article does support a strong desire for a culture of high collaboration and quality within CROs and consulting partners.

About the Author

Matt Barnes, CEO, Principal Consultant, Praecur Consulting Services

Reference

1. Bleys J, Flemming E, Mirman H, The L. CROs and biotech companies: Fine-tuning the partnership. McKinsey and Company white Paper. 09 Jun 2022.