As pharmaceutical companies increase their level of outsourcing, the models for partnering ar evolving. Preferred-provider
relationship are highly collaborative and strategic partnerships between pharmaceutical companies and select CROs, CDMOs,
and CMOs. The author examines recent examples of such collaborations.
Facing pressure to improve timelines in drug development and reduce costs in drug development and commercialization, the pharmaceutical
majors are increasing their level of external development and manufacturing. At the same time, they are looking to manage
these external relationships more efficiently and cost-effectively. The result is the preferred-provider relationship in
outsourcing. Unlike simple transactional or fee-for-service outsourcing, preferred-provider relationships represent a deeper,
more collaborative, and enhanced strategic partnership between sponsor companies and their third-party providers and satisfy
an interest by pharmaceutical companies to work with fewer suppliers. During the past several years, select pharmaceutical
majors have entered into preferred-provider relationships, particularly with CROs, although manufacturing-based relationships
also have been formed.
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Big Pharma partners
In May 2011, Pfizer formed strategic partnerships with the CROs Icon and Parexel, both of which will serve as strategic providers
of clinical-trial implementation services over a five-year period beginning in June 2011. The new partnerships will be fully
implemented over an 18-to-24 month period.
In announcing the collaborations with Icon and Parexel, Pfizer said that the two-partner model will simplify its processes
by reducing the number of external service providers that the company uses for clinical-trial execution. Pfizer says this
new strategic partnership model does not substantially change the proportion of clinical-trial implementation services that
the company outsources. Pfizer is retaining scientific ownership of the clinical-development process and is maintaining oversight
and quality standards relating to patient safety and regulatory compliance.
"We've also [have] taken a look at the value chain inside our research organization and have outsourced a lot of our clinical
work with a strategic partnership with Icon and Parexel," said Ian Read, chairman and CEO at Pfizer at the JPMorgan Healthcare
Conference, which was held in January 2012 (1). "I think that's a major strategy for us. We've rationalized our efforts there.
Before we were dealing with 18, 19, 20 plus partners. It was very difficult to control. It was very difficult to get quality
work and get savings. We now have a strategic partnership with two global players."
Pfizer's partnership with Icon and Parexel followed an earlier partnership made by Bristol-Myers Squibb with Icon and Parexl.
In June 2010, Bristol-Myers Squibb signed three-year agreements with Icon and Parexel for joint strategic, operational, and
capability support of Bristol-Myers Squibb's clinical-development program. In August 2011, Bristol-Myers Squibb selected Icon
as a preferred provider for full-service clinical pharmacology and exploratory clinical studies
Table I: Publicly announced preferred-provider deals.
Bristol-Myers Squibb has since followed with other preferred-provider arrangements. In March 2011, Bristol-Myers Squibb and
the CRO WuXi AppTec formed a strategic partnership for stability studies of small-molecule new chemical entities. Under the
agreement, WuXi will build, equip, and operate a dedicated, fully cGMP-compliant 25,000-ft2 analytical testing facility in Shanghai to store and test stability samples and to perform other services for Bristol-Myers
Squibb. WuXi also will employ a dedicated staff for stability testing, sample management, analytical testing, pharmaceutical
science, quality assurance, metrology, and other services, including stability-data reporting in support of all global dossier
submissions by Bristol-Myers Squibb.
Bristol-Myers Squibb also had adopted a facility component in its preferred-provider relationship with Syngene International,
a subsidiary of the Indian biotechnology company Biocon. In March 2009, Syngene opened a fully dedicated R&D facility for
Bristol-Myers Squibb in Bangalore, India. The 200,000-ft2 facility is focused on discovery and early-drug development. Construction on the facility began in March 2007 when Bristol-Myers
Squibb and Biocon entered into an agreement to develop integrated drug-discovery and development capabilities at Syngene.