Successful partnerships require a commitment to change and a reevaluation of core competencies across both organisations Through the application of a clear strategy committed leadership and a high degree of flexibility strong and sustainable sponsorCRO partnerships can help maximise portfolio value by minimising development cost and time and enhancing resource productivity
Clinical Research Organisations (CROs) and drug development sponsor organisations such as biopharmaceutical companies, academic organisations, and Non-Governmental Organisations (NGOs) have collaborated for more than 30 years in an effort to enhance the clinical development process for new medicines. Although the scale and scope of these collaborations have substantially increased over time, it is notable that the vast majority of sponsor / CRO relationships have been tactical in nature. CROs are commonly sought out to help achieve ‘quick win’ benefits based on flexible resourcing, the application of low-cost resources (particularly in emerging markets), and the utilisation of focused scientific and technical skills to address particular near-term challenges. Rarely have these engagements focused on the longer-term investment horizon and extended beyond individual functions or compound outsourcing decisions, and as a result the benefits from these collaborations have been fairly limited and transitory. This is unfortunate. Considering the scientific, operational and financial challenges facing drug development organisations today, the need to maximise the benefits of these relationships is greater than ever.
Driving change and realising these types of benefits is hard work, and making this type of an alliance
successful can be particularly difficult as the business goals of drug development sponsors and service organisations may appear to be contradictory. However, drug development does not need to be a zero-sum game. With the proper focus on successful outcomes and ‘value drivers,’ there are ways to concentrate partnerships on behaviours and models of work that generate returns for both the organisations. Doing so requires change and strong commitment from both organisations, clarity of roles and responsibilities, clear decision-making rights for both companies, and mechanisms for oversight that align each organisation to shared and measurable objectives that are clearly understood and managed on an ongoing basis.
In addition to such a commitment and focus on outcomes, it is critical to structure these relationships in a way that the CRO has sufficient levels of empowerment and motivation to truly ‘own’ the accountability for delivering targeted cost and timeline benefits. Making a long-term development alliance successful requires a clear understanding of strategic objectives and strong sense of shared ownership in the success of partnered development programmes. In our experience, a number of steps are critical in creating this environment. These steps are reviewed in the next section.
Our experience in this field has allowed us to identify six critical steps that need to be taken when creating an environment of shared ownership in the success of partnered development programmes.
1. Identify priorities
It is vital that partners clearly understand, state, and rank the target priorities for the alliance (e.g. cost savings, timeline reductions, quality standards, flexibility, etc.), as this will drive decision making and ongoing partnership initiatives. Having a clear statement of priorities helps drive internal communication within both organisations and makes it possible to develop strategies that address these goals. Examples of these priorities and the resulting expectations are described in Table 1.
2. Establish clear roles and responsibilities
One of the main drivers of clinical development cost (and frustration) is duplicative and misplaced activity. A critical aspect of any alliance is to identify what functions and responsibilities are ‘core’ to each organisation, and to use this information to create a set of joint business processes and/or rules that eliminate duplication and leverage the strengths of each company. The identification of what is ‘core’ vs. ‘non-core’ can be fluid and applied either broadly across a partnership or very specifically at the molecule level. In numerous situations, we have found that continuous engagement early on in the development process involving collaborative protocol development, country and site selection, and general development of trial operational plans can produce significant savings in time and cost of development.
Furthermore, such an understanding and clarity of responsibilities has enabled sponsor organisations to focus on critical regulatory and commercial initiatives (e.g. working with both central and regional / country-level affiliates, getting buy-in from these affiliates, and leveraging local knowledge in the context of a global alliance, etc.) in ways that maximise the capabilities of both sponsor and CRO personnel and resources.
3. Build trust and support via transparency
Building an alliance that drives significant productivity improvements requires both sides to trust each other. This trust is earned over time, and built and supported through mutual commitment to the alliance, shared risks and rewards, and a high degree of transparency in the delivery of work (supported by information systems, metrics / Key Performance Indicators [KPIs], and alliance management). Early goal setting is essential so that all constituents are keenly aware of not only short-term milestones, but also the correlated impact these have on long-term needs for the health of the partnership. These predetermined goals should address both individual and commonly identified mutual goals combined with joint oversight to ensure that performance metrics are achieved.
An effective approach used in partnerships involves the adoption of a Balance Scorecard system. The balanced scorecard process and application of the Alliance Strategy Map, developed by Robert S Kaplan and David P Norton is a well-known, overarching management system that works to integrate and align strategy and operations. The process begins by jointly developing strategic goals for the partnership. Metrics are then developed to measure the progress against partnership goals. Finally, initiatives are implemented to help achieve the metrics and, ultimately, the strategic goals for the partnership. The combined strategy map/balanced scorecard process then helps to create the agenda for ongoing joint governance meetings (Figure 1).
Transformational results can and have been realised in partnerships where this balanced scorecard methodology has been applied. In one partnership, the following efficiencies were achieved and documented:
Overall clinical cycle time was reduced by 40 per cent, enabling our partner to focus on bringing new products to market at a faster pace.
A new methodology was developed to eliminate approximately 50 per cent of non-performing investigators, which then was reapplied for more effective expenditures
The shared objectives on the joint strategy map empowered alliance members to make strategic and scientific decisions earlier in trial design, allowing the sponsor to focus on development priorities and transfer more ownership for delivery priorities.
4. Dedicate a management team
To successfully execute alliance initiatives, leadership and clear accountability for performance are required. In our experience, we have found that managing the transition and execution of work is best accomplished by a dedicated team from both the sponsor and the CRO. This team can leverage expertise from across both organisations and be held accountable for meeting performance goals and objectives.
In nearly all successful partnerships, the first year of the relationship can be especially challenging for both companies. There is often a great deal of change and uncertainty involved with moving to a new model of work, even if the scope of the partnership is initially small but potentially transformational. During this first year, it is critically important that the leadership teams from both companies clearly demonstrate their commitment to the partnership and its objectives. This commitment begins with the initial ‘launch’ of the partnership and carries through the transition and implementation activities.
Related to the need for strong and supportive senior management is the support of highly capable operational teams from both companies. In most successful partnership models, the individuals responsible for programme direction/leadership tend to be critical in building networks within organisations, shaping processes to fit the partnership, and making sure that key objectives are achieved. In particular, effective operational leadership and engagement with key sponsor stakeholders is central to helping shape a streamlined approach to programme oversight, while duplicative activities and unnecessary handoffs are avoided. A specific example of this management approach and the creation of a ‘biotech-like’ mentality within the alliance is as follows:
A recent long-term partnership agreement involving a portfolio of programmes was formed between a sponsor and a CRO, and governed in a very strategic and streamlined manner, with one ‘Representative Officer’ empowered to serve as the primary leader and point of contact for each company. The CRO’s representative functioned effectively as the ‘CEO of a Biotech company,’ with responsibility for the operational and financial management of the portfolio of studies and accountability to a small Executive Oversight Committee (three members from each company) that provided strategic direction and oversight for the model. The objective of the alliance was the successful achievement of proof-of-concept for as many indications as possible, and governance was focused on supporting this objective while ensuring regulatory compliance and patient safety as studies were conducted in a highly externalised way.
With the right people and processes in place, it is possible to create an integrated partnership that can address all components/variables (internal and external) contributing to the ‘fully-loaded’ costs of development on a comprehensive basis. In our experience, programme-driven sourcing produces financial benefits driven by the following:
Accelerating time to market is also a key driver of product value and a major source of potential cost savings. In our experience, the most important driver of timeline benefits involves the closing of ‘white spaces’ or gaps in the development cycle that result from handoffs between groups and the review/reconsideration of previous decisions. This is difficult to accomplish in a project-based outsourcing approach, where there is limited consistency in the way that development activities are conducted both within and across stages of development. In contrast, the application of consistent outsourcing, oversight, and execution processes across a large set of studies and over a long period of time can result in substantial reductions in study cycle times. For example, in a large-scale partnership between Solvay Pharmaceuticals and Quintiles1 reductions in study cycle times of approximately 40 per cent were realised. Similarly, in an alliance between Eisai Pharmaceuticals and Quintiles, Eisai management noted that the speed at which a number of Phase Ib/II proof-of-concept studies were conducted in partnership with Quintiles allowed Eisai to develop certain compounds at ‘half the level budgeted.’2. While these particular examples and levels of improvement may be exceptional, our experience suggests that these types of broad development collaborations can help pharmaceutical companies generate significant value.
Successful engagement between sponsor companies and CROs must involve a well thought-out transition and change management plan. The plan must focus on assessing risks, mobilising leaders in both companies, supporting positive communication, and providing tools and staff training for successful results. In our experience, having a strategy to prepare for change, proactively identifying and communicating with groups /individuals impacted by the process, and executing the transition plan using training materials and performance metrics plays an important role in supporting alliances and ensuring that productivity targets are met.
This strategy should involve the use of a joint planning process, based on collaborative efforts using teams that are chartered to develop a detailed transitional project plan as a working document. The content and sections may be adjusted and agreed upon based on potential transfer of work and is approved by both parties. Once this collaborative process is adopted, team members may reach out to counterparts with any concerns or establish additional planning session’s necessary for their work stream. A key deliverable of the transition planning process is a joint communication plan. This plan should identify all key touch points in each organisation and develop key messages for broad distribution, with a proposed timeline and clear delivery owners. Communications should also consider any potential transition risks and draft an escalation and response plan accordingly.
We recognise that many biopharmaceutical organisations procure external development capabilities and resources with the intent to serve many different therapeutic areas in a large variety of functions and geographies. As the industry has evolved, many sponsor organisations have come to recognise that they have a somewhat ‘fragmented’ approach to development that relies on many different internal and external suppliers working in inconsistent ways, and focused on activities rather than successful outcomes. There are certainly many challenges involved in working with CROs and other external development partners, but if done effectively the potential financial, operational, and scientific benefits can be substantial. With this in mind, it is imperative for sponsors to both carefully select an appropriate development partner(s) and maximise the value of these relationships in ways that meet operational, financial, and commercial needs. While it is impossible to prepare for every challenge, our experience suggests that following the key steps outlined in this paper makes achieving the goals of such a clinical development alliance much more likely.
1.Kaplan SR, Norton PD, Rudelsjoen B. (2010). Managing alliances with the balance scorecard. Harvard Business Review. 2010. 2-9.
2.Poddy, Daniel. “Eisai’s Venture-Like R&D Starts to Produce Results, And Shorter Development Timelines.” PharmaAsia News July 2011: Print
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