Pharmas and biopharmas should adopt a “nimble”, more flexible approach when building relationships with CROs to stay ahead of the changing market, according to a new report.
The study – by Irish CRO (contract research organisation) Icon in partnership with Booz & Co – suggests that a lot of companies do not change and adapt their partnerships, and do not utilise providers as “valuable partners”.
It warned those companies outsourcing simply to cut financial pressures to re-think their model, and to treat service providers as “strategic partners” which can allow a firm to meet the increasing demands of the industry with just a few fixed cost core capabilities.
“Increasing business pressures around the globe are forcing pharmaceutical companies to acknowledge that it is impossible to be the best at everything in the wide-ranging and complex business of drug discovery and commercialization,” said the team, led by Icon’s VP of proposals and business information James McSweeney.
The analysts added that a “properly designed” CRO relationship is crucial for firms as they experiment with new strategies in a constantly evolving scientific and business environment.
The solution? “A new nimble approach based on developing differentiated internal capabilities and building on outside partnerships allows pharmaceutical companies to stay ahead of changing market dynamics and generate value at every point in their organisations.”
One solution, says the report, is identifying which of four different types of alliance – ranging from straightforward vendor arrangements to highly integrated alliances – best suits.
“To choose the most effective partnership structure, pharmaceutical companies need to first assess their internal capabilities to identify those areas where they already excel or where they want to make additional investments,” the researchers added.
The analysts said companies that constantly assess their core capabilities, and which are willing to outsource crucial activities that are not a speciality, are the most successful.
It cited Citing Pfizer’s recent clinical trial management alliances with Icon and Parexel as an example, saying: “Pfizer’s stated strategic intent is to sharpen its research focus and create a more flexible cost base by transferring responsibility for managing global clinical trials to CRO strategic partners.”
Now with global research and development (R&D) outsourcing is expected to soar from $29bn to $35bn by 2015, the report says the time for action is now.
“The days of rapid, broad-based expansion and ‘staffing to the peak’ are over. For example, regulatory requirements and cost pressures compel companies to expand global clinical trials.
“To secure strong returns in today’s low-growth environment, pharmaceutical firms must continue to achieve high capacity utilization and efficiencies from scale. At the same time, they have to remain flexible enough to respond to rapid changes in the market and new scientific developments, such as biosimilars and personalized medicine.”