Outsource from the Inside

When it comes to clinical teams, the question of whether or not to outsource brings some untraditional answers
Jan 01, 2008

The message is clear: Pharma needs true innovation to get its pipelines flowing. But if the industry is serious about pursuing new science, then it should devote more resources to searching for it.

Michael Gamble
Pharma scientists and engineers in charge of clinical research and testing don't have much time to spare, but they are still often pulled into mundane and routine operations. Scientists, for example, spend an enormous amount of time on stability testing. This strains already limited internal resources and leaves them unavailable for more strategic and critical functions, such as formulation and product development.

Most companies look to contract research organizations (CROs) for help with this problem. In 2006, CROs brought in $7.44 billion, according to Frost & Sullivan, and that market is projected to grow to $20 billion by 2013. Yet the growing specialization of science, the need to optimize R&D spend, and a changing regulatory landscape that demands more studies quicker means that, for pharma, the traditional outsourcing approach won't always work.

Increasingly, some companies are forgoing the question of whether or not to outsource. Instead, R&D execs are looking at another model, where—rather than taking the work out of the pharma organization—they ask consultants and researchers to come inside and work alongside in-house staff.

On-site Teams 101

On-site scientific teams work on company premises but are managed by a solutions provider. This frees up in-house staff for more critical activities.

Chris Hediger
Certainly, these services hold the greatest value for companies who want clinical functions to stay internal, have the necessary equipment and infrastructure to house a project team, and seek a true partner. Small organizations that don't have space, equipment, or capacity to handle additional workers may not be able to best leverage this service.

For the appropriate company, on-site clinical teams offer several advantages:

Greater control By keeping work on-site, companies have greater control over the team members and work processes. The pharma company knows that the scientific team put in place is the one that will work on the particular project. Project teams can also expand or contract in a planned fashion according to workflow.

Fewer communication barriers Physical separation can lead to separate thinking. Scientific teams that share space can more easily build relationships with company personnel and better understand the work.

Cost saving Clinical teams can offer a cheaper alternative to traditional outsourcing. The model allows pharma firms to use their own overhead and equipment, for which they have already invested. In addition, the pay packages for clinical teams are less expensive than for pharma company employees.

Predictability of costs Companies that outsource clinical teams pay a fixed rate for the services. This allows for predictable expenses within a budget, even through ebbs and flows of volume. For example, spikes in the tests needed for a trial may require more man hours, which might mean overtime costs. However, if the company pays a fixed rate for the service, it doesn't have to worry about budget overuns due to overtime expenses.

HR away! In the majority of organizations, the average time to fill a position is 90 days. Very often, positions remain vacant because managers don't have the time to find and interview candidates. As a result, projects can fall behind schedule. In this area, outsourcing organizations generally have a pipeline of candidates, thereby reducing the amount of time needed to fill a vacancy and eliminating the time managers spend interviewing candidates and dealing with human resources issues.

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