Different sizes, different strengths

Replies to survey questions indicate why the outsourcing decision is based on several factors.

The sponsors' view. The reasons sponsors provided to explain their choices of CROs make sense in light of the strengths different-sized providers bring to the table. Pharmaceutical executives summed up the differences as follows: "Large, full-service CROs are best when a global footprint, infrastructure, and 'deep' experience are needed. The Big Pharma and biotech sponsors and big drug developers rely on the large, full-service CROs if they're doing a large, pivotal, Phase III clinical trial."

Executives feel that medium-sized CROs are best when it comes to value and having less staff turnover than the larger CROs. Medium-sized CROs also typically provide more flexibility, quality personal service, and senior management involvement.

Smaller CROs, executives indicate, are best when it comes to flexibility, responsiveness, attention, and involvement of senior management. They also tend to have lower turnover than is found with larger CROs. Because they do not maintain a large infrastructure, smaller CROs are more cost-effective. As one executive from a small pharmaceutical company stated in the survey: "Smaller CROs have better personnel assigned for small sponsor companies. Big CROs tend to treat smaller customers worse."

The providers' view. As noted previously, providers also report that they are more satisfied when they work with sponsors of corresponding size. Providers that felt that sponsors of different sizes performed differently on these tasks most often felt that Big Pharma sponsors performed best. Most felt that Big Pharma sponsors were better than smaller sponsors at specifying tasks to be performed, and all relevant assumptions, in request for proposals. Providers, however, felt that smaller sponsors were better at considering CROs' input and advice during the bid stage.

A survey respondent from a large CRO explained it as follows: "The big challenge [in working with smaller sponsors] is dealing with a sponsor that has little or no concept of the complexity, and thus the true cost of, clinical development." Another CRO executive noted: "When the small company requires us to provide cross-functional services, we must utilize a greater amount of project management resources to coordinate efforts between third-party firms. Also, smaller companies may require a greater amount of consultation for the drug-development activities. This may result in additional manpower spent to plan programs and greater communication."

"Efficiency would improve overall if the smaller sponsors engaged the CRO earlier in the process," another provider said, "so that we could be involved more strategically and could help them in planning their needs."

Smaller sponsors, however, were seen by most provider respondents to perform just as well as did larger sponsors in certain areas as follows:

• Establishing appropriate contracts with CROs
• Respect of provider team members
• Team leadership
• Having reasonable expectations for the resources required by CROs to complete tasks
• Identifying the most suitable CROs to bid on projects
• Evaluating bids from CROs
• Adhering to own commitments
• Communication.

Research found other important benefits that were cited by CROs with respect to small to mid-sized biotechnology and pharmaceutical companies. "Small to mid-sized biotechnology companies are less difficult to manage because typically...you are working directly with key decision makers, and there is no middle-man communication, which streamlines productivity," one provider noted. "There is more flexibility with process and approach," stated another. An appropriate level of management and less bureaucracy than with large pharmaceutical companies were also noted.