Sponsors look to cut overhead costs, reduce timelines with ‘lean’ outsourcing models

By Zachary Brennan contact

- Last updated on GMT

Sponsors look to cut overhead costs, reduce timelines with ‘lean’ outsourcing models
As pipelines dwindle in a post-blockbuster world, pharma and biotech R&D operations are looking for new ways to take on non-traditional product development strategies that allow for less internal resources and increased efficiency while reducing costs, a new report finds.

Sponsors are turning to more outsourcing models that rely on less internal oversight of CROs as R&D headcounts continue to be slashed, according to the Avoca Group report, which was based on interviews with executives from three CROs and 14 sponsors and funded by Purdue Pharma.

For the report, Avoca said that the term “lean​” was used as a general and relative term, with “lean outsourcing models​” defined as those models designed by sponsors to reduce or to minimize the level of resources used for CRO oversight compared to traditional outsourcing models.

Denise Calaprice-Whitty, PhD, Senior Consultant at the Avoca Group, told Outsourcing-Pharma that for a lot of companies, the motivation to move to a leaner approach comes down to reducing costs as internal R&D headcounts are reduced. One of the major takeaways was that “most companies using these models were finding success with them​,” she said.

But sponsors looking to undergo this shift were also turning to CROs with which they’ve had prior experience.

The sponsor companies involved in this research did not typically move into full-service lean outsourcing without having had years of positive experience with a given CRO in a more ‘traditional’ outsourcing model prior to the transition​,” the report says.

The survey also found that successful “lean​” outsourcers had made carefully considered decisions about each of the following:

  • What core competencies to retain in-house, based on the corporate value system and starting point;
  • Functional vs. full-service engagement of providers;
  • Number and types/sizes of CROs to engage;
  • Type of trials to be outsourced under the lean model;
  • Contractual model, i.e. risk-sharing;
  • Use of independent contractors; and
  • Supporting tools and best practices in which to invest.

Protocol development also seemed to be an area where the landscape is shifting to allow more CRO responsibility under the lean model.

It should be noted that although the protocol concept document was generally developed by sponsors in-house, it was quite popular to have the CROs build the full protocols from these outlines,” ​the report says. “CROs were thought to have the operational expertise to do this skillfullyl, as well as to feel greater ‘ownership’ in execution when they had a significant role in protocol development​.”

Specific examples

Mitchell Katz, Head of Medical Research and Drug Safety Operations at Purdue Pharma explained to Outsourcing-Pharma.com what it was like for Purdue to shift to a leaner outsourcing model as the company went “through a significant downsizing​,” while at the same time receiving approvals  for two new drug applications and submitting two additional regulatory applications,  all within the same year.

The most critical aspect of these most recent regulatory submissions from Purdue were “based on compressing timelines amidst a competitive landscape. However,  we wanted to ensure that as we were tightening timelines, we weren’t going to compromise quality​,” Katz said, noting that Purdue hired additional vendors to look at data quality at the site level to ensure that faster timelines weren’t compromising quality.

More generally, he said the survey was put together to “look at industry best practices​” and to “ultimately put together critical info for senior leaders on where the industry is heading​.”

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