The relationship between biopharmaceutical companies and contract research organizations (CROs) is evolving as the industry's
need to outsource key service platforms has increased. There is a pronounced strategic realignment under way, with the CRO
morphing from a narrow service provider—used primarily as a source of spillover capacity—to a strategic partner with individual
companies around a more diverse range of activities, including mission-critical tasks such as drug development. Overall, the
revenue base for the CRO market was estimated at $21.7 billion in 2010. CROs range from large, international full-service
organizations, to small, niche specialty groups, and can now offer clients support in moving a new drug from proof of concept
to marketing approval without the drug company sponsor having to maintain a staff for these services.
More marriage than casual dating, the relationship between the two sectors has had its ups and downs. But given Big Pharma's
increased dependence on outsourcing, the relationship is here to stay. This is a signal finding of The Avoca Group's annual
survey of attitudes toward the outsourcing function among Big Pharma and the CRO community. On the eve of the 20th Anniversary
Celebration for Partnerships in Clinical Trials Conference, which will take place later this month in Arizona, Avoca shares
with Pharm Exec a sneak preview of this year's survey. The fundamental question is: How are the two groups getting along?
The envelope, please ...
Figure 1: Sponsor Satisfaction with the Work Performed by Clinical Service Providers
The key conclusion from the 2011 survey is that, in contrast to the negative trend of previous years, attitudes of each side
toward the other were considerably improved. Some 80 percent of sponsor respondents expressed satisfaction with the work performed
for them by clinical service providers, and only 7 percent reported dissatisfaction (Figure 1). Fifty-two percent were satisfied
with the value received for their outsourcing dollars, up from 42 percent in 2010, and only 14 percent were dissatisfied,
down from 23 percent (Figure 2). Provider satisfaction with relationships also increased substantially, from 74 percent of respondents in 2010,
to 90 percent in 2011 (Figure 1). These were the highest levels of satisfaction reported by both sides since 2006.
Figure 2: In general, how satisfied are you with the value that you have received for the money spent on your Clinical Service
What could explain this turn of events? Which companies have become more satisfied, and why? Could the difference be attributable
to only a select group of companies—perhaps sponsors with significant outsourcing infrastructures, large volume, and ample
bargaining capacity, or perhaps those that outsource to the most sizable CROs? Most importantly, is the uptick in satisfaction
likely to be an aberration, or could the new wave of outsourcing practices discussed in the 2009 and 2010 surveys be responsible
for true and positive transformations in sponsor/provider relationships? While we can't answer these questions definitively
at present, the analyses performed to date suggest that the positive changes may be real, enduring, and accessible to companies
outside of the Big Pharma realm.