Sourcing Process & Negotiation

Sourcing Process & Negotiation

Working with a mid-sized specialist pharma company to negotiate a full service CRO scope and costs across three pivotal Phase II and III studies.

To discuss how we can help you with similar challenges please contact Will Sillar.

The Problem

  • Prior to partnering with 4C, the client had embarked on a selection process for a new CRO to deliver their Phase II study, but communication of needs and gathering of proposed solutions and costs had been inconsistent.
  • Previously the process had been led by clinical operations and development with little procurement or clinical operations support.
  • The proposed CRO was known to our team to have ongoing performance issues as well as premium rates.
  • The CRO had been informed that they were to be awarded this study, with the expectation that they would also be awarded two further Phase III studies, but they were not demonstrating transparency in their pricing or collaborative behaviours.

The Solution

  • Through analysis of the cost proposals, reverse engineering unit costs and comparing industry benchmark rates, our team developed a negotiation strategy for the Phase II study.
  • We became an integral part of the client team, briefing them on the process to be followed and leading the negotiation discussions with the CRO.
  • For the Phase III studies, we developed a business case for re-opening the RFP process and placing the CRO back into a competitive environment, including study level “should-cost” estimates for senior leadership.
  • A robust, systematic and compliant vendor selection for the Phase III studies was implemented, setting a level baseline for all companies involved.

The Impact

  • We achieved a 20% reduction in direct fees versus the original bid for the Phase II Study through the removal of unnecessary tasks, rate reduction, effort consolidation and bottom-line discount.
  • For the Phase III Studies, all CRO cost proposals were within the price range estimated via the “should-cost” process, enabling better planning.
  • The Phase III Studies RFP was praised by one global CRO as the “best they have seen all year” and enabled a fair comparison across suppliers.
  • Upfront activities on scope enabled a more robust contract and reduced cost and scope creep, expected to deliver ~15% savings.
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