Q: How will sponsors and CROs achieve competitive advantage in todays clinical development environment?
A: Be the first to make hybrid outsourcing models work with much greater efficiency and effectiveness.
The most recent CRO industry report in Contract Pharma highlights some of the most pressing thoughts on the minds of executives from the service provider side of the equation.
In summary, there is continued focus on how the service needs of sponsors are changing because of:
- Exploring treatments for niche and rare diseases
- The increasing complexity of trial designs
- Greater application of technology solutions, AI & Machine Learning
- The expansion of clinical trials into new geographies and regions
- An increased need for speed and reduction in cycle times
Put even more simply… we want more “stuff”, it’s harder to do, it has to be quicker, and there are many more options out there.
As outlined in the report this presents an opportunity for CROs to grow, but also a threat of falling behind the competition if they are unable to provide the talent, specialist knowledge and keep abreast of the very latest technology and digital tools.
The typical response from the big CROs to increased uptake by sponsors of new service demands has been to incorporate capabilities, skills and geographic coverage into their organisations through acquisitions; each year we seem to see record M&A deals being reported in the service provider space.
However, under volatile and fast paced conditions, where current working practices and technologies could be superseded or replaced within 12-18 months it makes less sense for CROs to follow this path. Therefore, much like the “make vs. buy” question in the sponsor, the CRO should be looking at “acquire vs. partner” options.
In my opinion, the “partner” option will be the way to go because it means companies can:
- Hedge their bets on which technology will become market leader.
- Reduce competition to hire for specialist (and rare) resources, leading to artificial wage inflation.
- Create a more flexible, nimble and scalable model to meet varied market demands.
- Focus on their core skill set
- Try before they buy… or keep on renting?
But…as an industry we are not actually very good at partnering. I have managed multiple hybrid working strategies in the past with mixed results, ranging from “mildly frustrating” to “rage inducingly dysfunctional”. So, if we are to actively pursue an increase in hybrid working strategies there needs to be a focus, from all parties, on implementing mechanisms which can make them work far better than they do right now.
Here we can learn from other industries which have experienced similar problems, such as IT, financial services and construction. These industries had similar issues with their complex business process outsourcing (BPO), but through the application of new operational solutions and contractual frameworks they were able to deliver substantial (up to 40%) efficiency gains.
The sponsor and service provider companies which are the first to grasp this opportunity and adapt to new ways of partnering will have a competitive advantage.
At 4C we have been working with companies to turn this into a reality through the Cellular Services Model.
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If you would like to find out more, please drop me a line through LinkedIn or send me an email: rob.aitchison@4CAssociates.com
