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Eric Langer has over 25 years experience in biotechnology and life sciences strategic marketing management, market research, and publishing. He has held senior management and marketing positions at biopharmaceutical supply companies. He has published and authored many books and reports on topics in Biotechnology, Large-scale BioManufacturing, and bioscience commercialization and communication. He teaches at Johns Hopkins University marketing management, biotech marketing, services marketing, and marketing in a regulated environment. In 1989 he co-founded BioPlan Associates, Inc. to provide market analysis, and strategy to biotech and healthcare organizations.
Although the CRO may not wish to draw attention to weaknesses in the intended trial, failing to do so is a great disservice.
A problem for the major pharmaceutical companies is that investors have become accustomed to double-digit growth performance and thus, there is constant pressure on them to develop an ever-greater number of new products with high sales potential. However, the rising costs and risks of drug development combined with the lengthy drug development timescales, and increasing competition have made it difficult for companies to keep pace with such expectations. Clinical trials are a particularly costly and time-consuming part of the R&D process, frequently accounting for over 40% of total R&D spending.1
These continuing pressures necessitate a change in R&D strategy, particularly with respect to using external organizations to ensure successful product development.1 Few pharmaceutical companies would attempt to manage every part of the R&D process by themselves, as there is now proven value in outsourcing.1 This change in R&D thinking also requires a response from those who are in line to perform such work.Contract research organizations (CROs) must be able to offer a range of services that can meet a client's objectives for their product, but must also be thinking how they can further expand their offerings to suit the dynamic global market. They must mature beyond being simple service providers and demonstrate themselves as partners who can provide true value to pharmaceutical companies.
Recent figures show that pharmaceutical companies are increasing their R&D investment in their quest to improve productivity (Figure 1). Figures from Pharmbiosys reveal that this spending rise is particularly evident among the top ten pharmaceutical companies — who dominate the industry's R&D efforts.1 According to the analyses, by the end of 2006, the top ten companies were expected to have invested a massive $54 billion, representing close to 60% of total industry R&D spend.1 By 2008, their investment could rise to $65 billion, representing over 80% of total industry R&D spend.1
Although smaller companies may produce innovative compounds, only the larger companies would appear to have the spending power to take these products through the necessary stages of clinical trials. The divide in spending power between these two sets of companies will be further increased by events such as mergers and acquisitions.1 Despite the vast investment at their disposal, the largest companies have become much more cost-conscious when planning projects and using internal resources. As a result, it could be CROs that stand best to benefit from the rises being seen in R&D spending by these pharmaceutical industry leaders. Formalized plans to use contractors for clinical trials are increasingly becoming part of a company's R&D strategy.
A 2006 report by the Tufts Center for the Study of Drug Development revealed that company sponsors who were more extensive users of CROs tended to complete their projects faster, with this being particularly noticeable during the study close-out period.2 An important additional feature of these findings was that quality comparable to submissions involving minimal use of CROs was maintained.2 Such findings will give confidence to those wishing to outsource projects and counter fears about loss of control over the development of products.
In 2004, it was estimated that leading CROs managed around 23000 Phase I–IV clinical trials worldwide.2 Such figures demonstrate that the CRO sector is both mature and well-established. Clearly, the major trials will be given to those CROs that have the most services to offer pharmaceutical companies and have an international focus to their work. Previously, many pharmaceutical companies have automatically assumed that they had superior knowledge to CROs in all aspects of clinical development. Provided they can defend their arguments with good reasoning, ambitious CROs should not be shy to challenge such attitudes!
A pharmaceutical company may indeed have better knowledge regarding certain aspects of clinical development, but this will be biased to the products they have previously developed and the markets with which they are most familiar. As pharmaceutical companies are committed to innovation this means developing new products for a changing global market, and, therefore, requires a fresh approach to R&D and subsequent marketing. This is where a pharmaceutical company can gain value from a CRO, by using them for an objective viewpoint concerning their plans.
CROs will have worked with a range of clients across a variety of therapeutic areas and in many different markets. As the CRO sector has evolved steadily, it would be a mistake to overview the experience they have gained over the past two decades. Most CROs have considerable experience of dealing with and resolving a variety of problems encountered during clinical development, and should be able to apply such thinking to the client's product. Frequently, it is not just technical issues that disrupt a clinical trial, but also failure to maintain proper lines of communication. Furthermore, these CROs have their own contacts in regulatory agencies, healthcare systems and patient organizations, and these can ensure smooth progress for a trial.
In this new era of clinical development, a pharmaceutical company should insist that the CRO provides a comprehensive approach to their trial that challenges any preheld views. Only in this way can a realistic approach be devised that will allow the trial to stay on track if any problems are encountered. The clinical trial process rarely runs according to plan, but many companies are often overambitious at the outset and can pay a heavy price should their product fail. Equally, many CROs have been so eager to take on work they have not taken the time to critically evaluate the trial and this has exacerbated eventual problems. Although the CRO may not wish to draw attention to weaknesses in the intended trial, failing to do so is a great disservice. If a CRO wishes to be seen as a partner it must shake off the notion that it is a passive player in the R&D process.
Many CROs have been able to demonstrate their value through work in emerging markets. These regions are seen as particularly promising as they have the required patient numbers for large trials and because the work can be done in a cost-effective manner. However, these regions have additional value in adding to the prestige of a pharmaceutical company's products. For a firm to expand its markets, local physicians must have confidence in their products. Clinical trials offer these physicians a chance to familiarize themselves with the product in a setting they trust.1
Engaging these healthcare professionals is part of the clinical development process and the experience of CROs in working with these individuals is important to the success of an international trial. As the media often criticize pharmaceutical companies for how they operate in emerging markets, it is vital that CROs ensure standards are maintained. Many CROs have been able to do this by setting up their own investigator networks, which they can access if a trial is to be run in that region. These investigators will be the key opinion leaders in their respective therapeutic areas and have appropriate experience in running global clinical trials. These networks can provide added reassurance for pharmaceutical companies looking to outsource trials internationally.
Increasing R&D spending will enable the largest pharmaceutical companies to expand their pipelines, but outsourcing will allow them to further extend the benefits that result from the additional investment. The CRO sector has now come of age and has much to offer the pharmaceutical industry in the modern era of drug development. The greater use of outsourcing will aid the transformation of CROs from simple 'service providers' to established partners. Such cooperation can only improve pharmaceutical industry efforts to develop new and innovative drugs to satisfy unmet medical need.
1. Pharmaceutical Research and Development in the 21st Century, Pharmbiosys (2007). www.pharmbiosys.com
2. Anon, "CROs Usage Associated With Faster Drug Development Speed At Comparable Quality, According To Tufts Center For The Study Of Drug Development," Medical News Today (2006). www.medicalnewstoday.com