Partnerships 2010: What Does the Future Hold for Sponsor-Clinical Service Provider Relationships?

Moderator:
Patricia Leuchten, President and CEO, The Avoca Group, Inc.

Panelists:
Elspeth Carnan, PhD, Executive Director, Head Global Clinical Site Management, Global Development Operations, Amgen
Mitchell Katz, PhD, Vice President, Global Clinical Development, Eisai Pharmaceuticals
Denise Calaprice-Witty, PhD, Executive Director, Survey Research & Relationship Management Programs, The Avoca Group

The Avoca group shares data and key findings from their annual survey and uses that data as a catalyst for the panel discussion titled above. The focus of this years survey and the question posed to respondents is “ How has outsourcing strategy changed over the last 5 years?” Both Sponsors and CROs were polled and the data correlated to find synergies and separations in expectations in out-sourcing relationships. The full report can be obtained from the Avoca Group, Inc.

The web based survey had 285 respondents split with about a third of the responses from sponsor companies and two-thirds from service providers.

One major finding was that sponsors have consistently reduced their outsourcing to fewer numbers of providers and focus on relationship management. Basically preferred provider relationships. CRO data supported this with CROs focused on building key relationships with Master Service Agreements.

On the part of sponsors the expectations included reduced pricing and focused oversight. No surprise, right? Formal relationship management programs are reported as becoming more prevalent and apparently productive within both the sponsor and the CRO organizations.

Outsourcing spend in real dollars is mostly going to preferred providers and this trend in on the increase. The effect has been that most sponsors are seeing increased satisfaction with the services providers and the value of those services when preferred provider relationships are maintained. Most CROs will not be surprised by this data. It has long been maintained in the service industry that a long-term relationship with a sponsor allows each party to become more aligned with the processes and procedures, and not the least communications expectations of the other and mitigates for more efficiency and quality in the product. CROs looking to break into a new sponsor will be less thrilled with this report.

Large numbers of sponsors appear to be in the midst of launching initiatives internally to systematically manage service provider interactions and in general are increasing investment in relationship management.

The panel reports the use of benchmarking their providers not only on costs but also on value. CROs have their expertise and so do the sponsors. Dr Katz believes in letting the CRO do what the CRO does best. “We need to understand what the CRO has that the sponsor doesn’t and what the sponsor has that the CRO doesn’t and we need to learn to work those synergies together.” It’s worth the investment because in the end you get a better partner. The data seems to say the same.

However, does that thinking, that seems prevalent across this survey, hold true in the face of an economy that provides the opportunity for the sponsor to realize significant savings by shopping for a better value in services? Will sponsors keep shopping at the brand name stores or is it becoming irresistible to have a look at the discounters? CROs report significant price sensitivity and increased expectations. Apparently they are providing those.

What about risk.? Sponsors are looking more and more to mitigate risk and, in some cases, are more willing to share rewards for successful development. What is the CRO/Sponsor relationship when it comes to sharing risks? The issues involve recognition of core competencies internally as well as agreement on the traditional timelines and deliverables. How much of this is actually being implemented. That is less clear.

It would be interesting to look back in 2011 to see how much of this survey has proven to be accurate for forecasting. See you at Partnerships 2011??