Over the summer, the 4C Life Sciences has been looking at the latest clinical outsourcing trends in discussions with biopharma sponsor companies and leading CROs. The key question has been: “Are the current outsourcing models and relationships really adequate to meet current and future demands?”. The answers we received were revealing, and several themes emerged.
The focus we saw among sponsors – on cost and time – is hardly news. But that focus is undoubtedly intensifying, as is frustration at the limited options available to them. Meanwhile, trial volumes continue to grow, CROs are busy and the sense of pressure in the market is yet to appear. More objectively (we hope) the forcing functions in the Pharma/CRO equation continue to rise in force.
- Pharma company strategies on time to market, R&D yield and ROI are moving with rising market expectations. Rising demand for CRO services comes too from new biopharma entrants.
- The focus that sponsors place on CRO performance is growing. The ability of suppliers to offer new solutions and improvements is becoming a key buyer value.
- Among practitioners on all sides, previously invoiceable questions are gaining currency, like, “how do we reduce time from last patient/last visit to submission by 50% or even 75%?”
- New product pricing pressures – historically muted – are emerging via legislation like the Inflation Reduction Act. Pharma board concerns are rising: could this pressure eclipse that of interest rates, inflation or even rising competition and disruption?
- 2024 budgets will pass on this concern to R&D leaders. Every sponsor we talked to is looking to reduce clinical development cost, starting as ever with external – i.e. CRO – spend.
- Likewise funder scrutiny is tightening in small and emerging biopharma companies, for all that money continues to pour into the sector.
- So while R&D gross spend rises reassuringly, so will the challenges to CRO margins, capacities and performance across the board.
And a new slant on productivity…
- In another perspective, constraints on crucial skills and capacity in the industry are intensifying too. History suggests that those with creative solutions to this will garner disproportionate returns in margins, competitive power and thus the ability to drive growth and service it.
- With limited patient populations and ongoing challenges of trial recruitment forming other bottlenecks, might new approaches in trial planning and delivery increase productive capacity in another, equally critical, dimension?
Lessons of the past in other sectors show that disruption comes most readily when stasis meets step-changes in the technical, commercial and societal imperatives of the day. We were left thinking, after our discussions, that for the CRO market this could be one of those times. We feel the tried and tested outsourcing models may serve for a while to come, there are real and significant opportunities for first movers – or new entrants – in a wave of change we feel is imminent. During the autumn we’ll be exploring this from different angles, with insights from other industries, and bench-testing some of the concepts and models that have taken financial services, electronics and IT industries through the same rough waters that we see ahead for the life sciences domain.
If you’d like to get involved in the discussion, add your views and get access to our early-stage reports on the future of clinical research outsourcing, please get in touch with Rob Aitchison, Will Sillar or Libby Burn – or visit 4cassociates.com today.