“Inside Outsourcing” Podcast Series Part 2: Size Doesn’t (Necessarily) Matter

Roughly 1000 companies identify as CROs, but a relative handful of top-tier providers command an increasingly disproportionate share of the clinical trial outsourcing market.

As the top CROs continue to expand their global reach and portfolio of services through both in-house innovation and via acquisition – a trend that is unlikely to reverse itself any time soon – the opportunity for small to mid-size CROs would appear to be waning. But this is not necessarily the case.

According to Patty Leuchten – President and CEO of the clinical outsourcing consulting firm, The Avoca Group – a significant number of small to mid-size pharma companies and biotechs would actually prefer to work with clinical trial providers outside of the big league.

While geographic specialization and niche capabilities can clearly offer an attraction for those smaller players that possess them, this is only half of the story.

The emerging interest in boutique and mid-size CROs could stem from a concern among smaller pharma and biotechs that they may not receive the same level of attention from big CROs that big pharma enjoys.

Author’s note: This will be a focus area in Avoca’s 2011 industry survey of outsourcing practices.

The trend has interesting market implications given the December revelation in Part One of IIR’s “Inside Outsourcing” interview with Leuchten: Specifically, that big pharma has been steadily consolidating its spend with preferred partners.

As big name sponsors winnow down their preferred CRO stables, even the top CROs may be inclined to reassess the perceived value of building relationships with manufacturers whose pipelines boast only one or two products – and to recalibrate their investments in those relationships.

Meanwhile, smaller CROs have an opportunity to cement relationships among a growing body of biotechs and micro-manufacturers with substantial market potential who are eager to find partners who can demonstrate a deep commitment through more senior-level engagement and resource allocation.

In Part Two of our three-part interview with Patty Leuchten, “Inside Outsourcing” delves into relationship dynamics in deeper detail and explores what sponsors are really looking for in a preferred CRO nowadays. We’ll also address common misconceptions about preferred provider relationships and look at some of the challenges facing biotechs and small pharma manufacturers.

And please be sure to tune in to Part Three of our interview, where we’ll discuss performance metrics and a very interesting acronym: “KRI”.

Click here to listen to Part Two of the podcast.

Author’s notes: Patty Leuchten will moderate a panel of senior executives from Pfizer, Covance and Astellas on the topic of developing and maintaining efficiencies in CRO oversight at IIR’s Partnerships in Clinical Trials conference in Phoenix on Wednesday, March 30th.

Avoca’s Denise Calaprice will also present a battery of key, preliminary findings from Avoca’s 2011 industry report – an exclusive opportunity for Partnerships in Clinical Trials attendees!
For more information or to register for Partnerships in Clinical Trials – taking place March 30th thru April 1st in Phoenix, AZ – please visit www.iirusa.com/CROpartners

On a final note, Avoca is recruiting participants for their 2011 industry survey on the state of clinical outsourcing. To
participate, please visit www.theavocagroup.com.

Participants will receive a complimentary executive summary of the results. The 2010 Avoca Report is also currently available for purchase on Avoca’s website.

ABOUT THE AUTHOR & INTERVIEWER
Marc Dresner is an IIR communication lead with a background in trade journalism and marketing. He is the former executive editor of Pharma Market Research Report, a confidential newsletter for market researchers in the pharmaceutical industry. He may be reached at mdresner@iirusa.com