The Avoca Group conducted a survey in 2011 to examine how outsourcing strategies, practices, challenges, and outcomes differ
by the size of the sponsor and the size of the provider when outsourcing clinical research (1). The survey was conducted to
determine whether there is a pattern whereby sponsor companies of different sizes (i.e., small, medium, and large) choose
to work with providers of different sizes or type. And if so, was the association a rational one? That is, do sponsors select
the types of providers that will provide them with the best service? The survey also addressed what this association means
for clinical service providers.
The survey was taken by a total of 193 respondents; 109 were sponsors representing a mix of small, medium, and large-sized
companies, and 84 were providers of varying sizes. The survey focused on a wide range of sizes of sponsors and providers with
respect to the following: provider selection; provider performance, overall and by task, by both the size of the provider
and the size of the sponsor; sponsor strengths and weaknesses in provider engagement and management, by size of sponsor; and
by specific CROs that perform particularly well for sponsors of different sizes.
Survey results
The data from the 2011 survey suggest there is a close association between the size of the sponsor company and the size of
the CRO selected to perform clinical trials. Most survey respondents felt that large sponsor companies (i.e., annual revenue
> $1.5 billion) are best served by mid-sized to large CROs (i.e., top 15 and top five), whereas smaller sponsor companies
(i.e., annual revenue < $100 million) are best served by small to mid-sized providers (i.e., top 15 CROs and below). This
perception is supported by an analysis of satisfaction rates by percentage of outsourcing spend allocated to the largest CROs.
The size of the sponsors tends to go with the size of the providers.
Survey data revealed that for 67% of the Big Pharma companies surveyed, most of their outsourcing spend goes to the top five
CROs. Seventy percent of small pharmaceutical companies dedicate less than 10% of their outsourcing spend to the top five
CROs.
On the providers' side, for most of the top five CROs, the majority of revenue comes from Big Pharma and less than 25% derives
from small sponsor companies. For most of the small, full-service CROs surveyed, less than 25% of revenue derives from big
pharma, and most revenue derives from small biotechnology and pharmaceutical companies.
Figure 1: Sponsors’ responses when asked what size of clinical service provider they felt provided the best service.
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Rational selection. Do sponsors associate with the types of providers that will provide them with the best service? Or is it only the perception
of "right size" that drives sponsors to select vendors of corresponding sizes?
Figure 2: Providers’ responses when asked what size of clinical service provider they felt provided the best service.
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The reported rates of satisfaction among both the sponsors and providers were examined, and they showed that respondents from
Big Pharma, medium-sized pharmaceutical companies, and small pharmaceutical companies were all most likely to feel that they
were best served by mid-sized CROs rather than by the top five CROs or smaller providers (see Figure 1). For their part, clinical service providers felt that large pharmaceutical companies are best served by the top 5 CROs (see
Figure 2).
The data show that even though sponsors of different sizes generally select different sets of providers, their satisfaction
rates are remarkably similar. Similarly, providers also are most likely to be satisfied with relationships with like-sized
pharmaceutical companies. The data show:
- Small and midsized sponsors that use the top five CROs to meet less than 25% of their outsourcing needs are generally more
satisfied than are small and mid-sized sponsors who use the top five CROs more liberally.
- In contrast, large sponsors that use the top five CROs to meet at least 50% of their outsourcing needs are generally more
satisfied than are large sponsors that use the top five CROs less.
Thus, it does appear that the observed association is rational. Sponsors are selecting the providers with whom they are most
satisfied.
