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 resultsThe 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.
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:
Thus, it does appear that the observed association is rational. Sponsors are selecting the providers with whom they are most satisfied.