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Outsource from the Inside


Pharmaceutical Executive

Pharmaceutical ExecutivePharmaceutical Executive-01-01-2008
Volume 0
Issue 0

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

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.

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.

Michael Gamble

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.

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.

Chris Hediger

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.

Resource bound At a time of cost cutting, many pharmaceutical companies are bound by headcount restrictions. An outsourced team, on the other hand, allows for the expansion of staff without an increase in headcount. This is particularly important for drug launches, when additional studies are needed or tied to the FDA approval process.

Project Manager Checklist

Training An All-star Team

Effective training of on-site clinical teams starts with the project manager. More than anything else, the hiring of the team's project manager is critical to the placement's success. (See "Project Manager Checklist," above.) It's necessary for pharma companies to buy in to the project manager because—once vetted—he or she plays a critical role in building the rest of the team and evaluating what resources and levels of expertise are required to accomplish goals.

Every pharma firm has established standard operating procedures for training its personnel in all good manufacturing practices, safety procedures, and other general facility processes. Much of this training is required by company policy or through federal requirements. And while the pharma company must supply all the necessary pieces—test certification, training sessions, client-specific tracking processes—the project manager and the solutions provider handle overall implementation and coordinate all training for team members.

Other training is more job- and test-specific. One helpful technique the project manager could employ is to create a matrix of all possible tests and each scientist's capabilities. This immediately identifies any training gaps, while highlighting people's skill sets.

As the on-site clinical team is ramped up, it's important to manage company personnel, who may feel threatened by the outsourced group or concerned that their roles will be the next to be outsourced. Product managers can assuage fears by interacting with other groups and establishing a vision for the project team. Knowing that the outsourced team has a clear role within the company and that the leader of that group can be trusted goes a long way in getting other teams to focus on their strategic responsibilities.

Measuring Performance

People must be managed and motivated, and by bringing in on-site clinical teams, pharma comanies can hold the hiring firm accountable for the team performance. They can request a training matrix and use it as a checklist for completed and pending training. They also can set a service-level agreement that guarantees all team members are certified in a particular test by an agreed-upon date. This can include ongoing training deadlines to ensure all workers have the most current information.

The pharma company and hiring firm should discuss and agree upon the scope of the project and key performance indicators during initial negotiations. This will allow the team's performance to be best measured throughout the engagement. While each project is unique, there are some common key performance indicators to consider:

  • Turnaround time If the team operates efficiently, trials should run according to schedule. Just take stability testing: If the objective is to verify the drug's composition within a window of time (usually two weeks), anything outside the given time frame devalues the test because it doesn't provide accurate time-appropriate data.

  • OOS (out of spec) issues Setting tolerances and monitoring the team's generation of OOS issues invites the company to hold the clinical team to quality standards.

  • Compliance actions All teams are subject to regular audits, whether they are internal to ensure quality assurance or external to ensure compliance with FDA, GMP, and GLP regulations.

  • Staff turnover Companies with minimal staff turnover are more productive, and they reduce the time and expense of hiring and training.

  • Capacity levels This defines the level of work volume across the team and can determine the number of team members that are needed to meet productivity goals.

Scientific team placement is an alternative to outsourcing the work to CROs or CMOs. Beyond traditional staff augmentation, it gives companies stability, efficiency, and flexibility. This solution helps ease companies' resource strain and provides the logistical freedom for greater innovation—the ultimate goal of all forward-thinking pharma firms.

Michael Gamble is group manager of Yoh Scientific. He can be reached at michael.gamble@yoh.com

Chris Hediger serves as VP of managed services operations for Yoh Scientific. He can be reached at chris.hediger@yoh.com

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