One of the hallmarks of the growth of outsourcing in the pharmaceutical industry has been the evolution of new sourcing models. As outsourcing gains acceptance, pharmaceutical companies and contract service providers experiment with and adopt various approaches to the packaging and delivery of services. The major themes in model evolution include
- moving from bidding individual projects to establishing preferred provider relationships covering multiple projects;
- various approaches to bundling services together versus outsourcing the delivery of a single capability in support of multiple projects or studies.
Sourcing models pursued in clinical and nonclinical development services have evolved in somewhat opposite directions. For most of the past 10 years, buyers of clinical research services have preferred to buy contract research organization (CRO) services on a full-service basis. That is, they have tended to buy the range of services needed to complete a clinical study—study management, site monitoring, data management, biostatistics, and medical writing—from a single CRO for a fixed price. By contrast, buyers of nonclinical services have tended to buy the necessary services for a particular drug candidate—process development and manufacturing for active pharmaceutical ingredients, dose formulation and development, clinical packaging, and analytical services—from multiple vendors, each specializing in a particular discipline.
Today, the trends in the two sectors are moving in opposite directions. Major pharmaceutical companies are embracing a functional outsourcing approach for clinical research under which they contract with a single provider to deliver a particular service in support of all their clinical trials. In the nonclinical realm, the trend is toward a full-service model, often referred to as the one-stop shop.
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These opposing trends reflect some very different dynamics in these two sectors of the pharmaceutical services industry. The rise of functional outsourcing in clinical research is being driven primarily by the industry's embrace of clinical information technology (IT). This change brings with it the need for new areas of expertise such as systems integration as well as new opportunities to realize cost savings by offshoring software development and data processing. Creating a single data infrastructure for all clinical trials facilitates using clinical data for applications beyond the study for which it was collected, including strategic planning, marketing, and disease modeling. Contracting with a single, dedicated information technology services provider to build and maintain the clinical data infrastructure offers the promise of best-in-class capabilities and cost savings across all clinical operations.
The functional outsourcing model in clinical research has been adopted in several major pharmaceutical companies, including Pfizer (New York, NY) and Wyeth (Madison, NJ), and based on discussions at April's Partnerships with CROs conference in Orlando, Florida, more companies appear to be adopting it. Furthermore, the model is moving beyond data management into other clinical research areas: Wyeth has struck a deal with ReSearch Pharmaceutical Services, Inc. (Dallas, TX), a clinical CRO, to provide site monitors for clinical trials, and the company recently contracted with DHL (Plantation, FL) to provide logistics for distributing clinical supplies to investigator sites.
One interesting implication of the trend toward the functional model is that it has opened the door to new competitors in the clinical research sector. IT outsourcing giants Accenture (New York, NY) and Tata Consultancy Services (Mumbai, India) have become important players in clinical data management, and it is widely speculated that Federal Express and UPS will join DHL in competing with established clinical packagers and couriers. That specter of increased competition from global leaders has traditional CROs very worried.