Untying the Outsourcing Knot - Pharmaceutical Executive


Untying the Outsourcing Knot
Outsourcing promises to be a major strategy for pharma in the years to come. But too often, it doesn't work the way it should. To get an expert's view, Pharm Exec talked with industry veteran Jon Koch, vice president of clinical operations, Americas, for Charles River Laboratories about the problems companies most often encounter when working with CROs. Here, Koch illuminates the top five—and provides some suggestions for sponsor companies to help keep their CRO relationships on track.

Pharmaceutical Executive

Lack of Team Support Expectation management is all about communication. But lack of team support is a problem rooted more in execution and metrics. The warning signs are familiar:

  • Performance deviates from expectations or contractual obligations
  • Decisions are made slowly, so issues take too long to be resolved
  • Financial or contractual issues linger, or there are unidentified scope changes
  • Senior management is involved late and is pressured for quick decisions.

A Sunny Forecast for CROs
The problem in many cases is that management gives most of its attention to the project up-front. The project teams within both companies get lots of attention at the beginning and are set on their path. But it's easy for these teams to get lost in day-to-day execution and lose sight of broader goals.

What happens when they lose sight? Several sponsor companies in the survey told similar stories: They were working with a CRO, and three-quarters of the way through the study, there was a scope change or financial amendment to the project that almost doubled costs.

Support is often (mis)handled today, but there successful models to follow. The key differences have to do with how senior management, outsourcing/contracts, and account management approach the project. In a successful model, those people stay in touch throughout the duration of the project, ideally on a quarterly basis, or even more often in some cases. The idea is not to use up a lot of executives' time, but rather to establish a continuous cycle of visibility.

To make this work, it is essential to put in place mechanisms that force interactions at all levels and across functions. The following five mechanisms have proven effective:

  • correlated performance reviews
  • project halfway point assessments
  • planned financial meetings
  • project steering committees
  • post-study evaluations.

Participants can include senior management, the outsourcing, contracts or finance departments, project representatives, and quality assurance. A benefit of any of these mechanisms is that they put upper-level managers together with project-level teams. Occasionally, when project-level teams work closely together, they may hesitate to raise concerns or give critical feedback because they must get along with each other. People from the next level up will tend to be more objective and better able to handle the issues.

Lack of Performance Measures One concern raised by companies is that day-to-day, week-to-week, and month-to-month performance isn't visible. If there's low visibility of performance, or it's difficult for executives to really understand the performance measures, it's a sign that those metrics were never established—or simply aren't being followed.

For instance, one metric in clinical trials is how many case report pages are completed, but still out in the field. It's a basic number that can identify a backlog. If too large a backlog of pages builds up, it will be a struggle to meet a database lock deadline. Yet, surprisingly, some sponsors and CROs don't track pages.

Sponsors seem to have two philosophies of metrics. In one, the company outsources its research and holds the CRO accountable to timelines, milestones, and so forth. The sponsor company, meanwhile, doesn't hold its own internal team accountable in the same way. This creates the frustrating situation when a CRO meets its deadline, submits material to the sponsor expecting a three-day turn-around, and then waits weeks for a response. (CROs, of course, do similar things to sponsors.)

Some smaller companies are starting to adopt a different philosophy. They don't differentiate: They hold their internal team to the same expectations for timely completion and turn-around and feedback as their CRO. That trend needs to accelerate.

To solve the problem of missing objective measures:

  • Performance measures should be identified at the proposal stage and be included in the contract
  • Tracking mechanisms must be in place prior to the initiation of the study
  • Both parties should agree on predefined assessment points
  • Results should be reviewed at multiple levels.


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