CRO Outsourcing Trends For 2015: The Move to the Cloud, the Web and Mobile Technology Continues

Pharmaceutical Outsourcing, May/June 2015

According to Nice Insight’s 2015 Pharmaceutical and Biotechnology outsourcing survey, over half of the companies that outsource only to contract resource organizations (CROs) expect they will achieve reductions in project lengths and costs by using CROs that employ cloud-based systems.

Nearly 50% of respondents also believe that the use of web-based life science labs will improve cost and time efficiencies. Mobile technology is also seen as enabling communications and study monitoring.  In addition, 96% of survey respondents indicated an interest in working with a CRO that implements new technologies that improve efficiency, quality, safety, and traceability.

Of the 10% of survey respondents that identify as only working with CROs, just 50% consider themselves to be biotechnology/biopharmaceutical companies, yet 85% engage in the development of biologic drugs. This data is not surprising given the growth of the market for therapeutic biologics due to the aging of the global population and the worldwide increase in chronic diseases. Demand for biosimilars is also anticipated to increase as numerous monoclonal antibody (mAb)-based drugs lose patent protection by 2020 and the middle classes continue to expand and healthcare systems to improve in many emerging markets.

The growing interest in working with CROs located in emerging markets is another noteworthy trend, in part due to the same reasons cited above. As the industry focuses more on targeted therapies that meet the needs of specific patient populations, manufacturers are increasingly interested in developing and manufacturing drugs in proximity to those patients. The results of the 2015 Nice Insight Pharmaceutical and Biotechnology Survey reflect this trend. In fact, 88% of survey participants who identify as only working with CROs are interested in outsourcing to contract research firms in emerging regions. In addition, 70% of the same group of survey respondents indicated they have already worked with such CROs.

Drive for Greater Efficiencies and Cost Reductions

There is a common thread connecting the trend to cloud-, Web-, and mobile-based solutions and the growing interest in using CROs in emerging markets: the need to increase efficiencies and reduce costs. Pressures from consumers, investors, insurance companies, regulators, and governments to drive down costs and improve product performance (efficacy, ease of use, patient adherence, etc.) are behind the recent increase in industry consolidation and the growing reliance on outsourcing.

The rising costs and complexity of clinical trials is further challenging the industry. As a result, drug companies are looking for ways to increase efficiency and productivity and reduce costs and development timelines by streamlining data management and work flows across all of their activities, all while maintaining the highest quality and safety.

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The adoption of cloud-based electronic data capture systems for clinical trial management, the use of CROs in emerging markets for clinical trials targeting populations in those regions, and greater use of automated testing services (see below) are just some of the ways that sponsors are looking to achieve these goals. CROs that are early adopters of these technologies and other new platforms will have the greatest likelihood of success going forward.

Interest in Automation

In addition to Internet-based technologies, many of the respondents who identify as working exclusively with CROs (44%) expressed an interest in the use of robotics laboratories for routine testing. The most often cited benefits of automated testing included faster turnaround times (61% of survey participants), the reduced possibility for human error (50%), and greater reproducibility (45%). Interestingly, cost savings on staff was not an important factor and was in fact mentioned by the least number of survey respondents (14%) as a key benefit of automation.

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CROs that offer robotic-based cell growth assays are likely to get the most business, with 43% of respondents indicating they have worked with such testing laboratories in the past. Protein quantitation (35%) and fluorescent repeater assays (31%) were other tests that a significant number of survey participants were interested in having performed by laboratories using automated systems. Not surprisingly, however, more complex test methods, such transgenic organism genotyping, combinatorial plasmid library construction, and cell viability assays, are much less likely to be outsourced to labs using robotics technology. The fewest respondents indicated a willingness to have custom protocols performed in such laboratories.

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Spending Remains Strong

The amount that companies are spending on outsourcing to CROs should, however, be encouraging for contract research organizations. In fact, over 80% of sponsors spend more than 10 million annually on CRO outsourcing, with 28% of companies investing more than $50 million each year, according to the results of the Nice Insight 2015 Pharmaceutical and Biotechnology outsourcing survey. Most of that investment is in discovery, preclinical, and Phase I projects related to the development of treatments for cardiovascular and infectious diseases and metabolic and central nervous system disorders.

With respect to the types of services that will be in demand over the next 12 to 18 months, respondents to the 2015 Nice Insight Pharmaceutical and Biotechnology Survey indicated that CROs providing analytical, biomanufacturing, blending, clinical research and monitoring, biostatistics, and chemical synthesis services will be kept busy. Choices will be made with the assistance of consultants or through industry research for 60% of the respondents. Referrals from colleagues are used in the CRO selection process by 45% of survey participants, while only 38% use trade shows to look for contract research service providers.

Financial Stability and Experience Important to Sponsor Companies

The most important factors that survey respondents consider when choosing a CRO are their financial stability and operations, methodological and therapeutic experience, with 96% and 95% of participants, respectively, indicating that these qualities were at least somewhat important. A CRO's track record, range of services, flexibility and adaptability, and ability to provide risk-sharing opportunities were also somewhat or more important to 94% of respondents.

Additional factors of importance to sponsor companies when evaluating CROs include good communication and transparency, responsiveness, and adaptability to sponsor methodologies, with 80% - 85% of survey participants labeling them as important or very important, and 97% of respondents indicating that they are at least somewhat important. Rapport between teams, industry reputation for quality, and the ability to understand customer requirements are nearly as important (somewhat or more important to 96% of respondents who indicate working with CRO’s).

Given this wide-ranging set of factors that influence the choice of a CRO, it is not surprising that no one particular source of dissatisfaction was identified by the survey respondents. The issues mentioned most frequently were product quality and communication, both by approximately 33% of participants. Other areas of concern included poor confidentiality/security procedures, slow resolution of issues, unexpected charges, poor prioritization of projects, and lack of risk-sharing opportunities, all of which were mentioned by 28-30% of survey participants.

Interestingly, these sources of concern for survey respondents are not necessarily the factors they consider when evaluating the performance of CROs. While quality/accuracy was the measure mentioned most frequently by survey participants who work exclusively with CROs (45%), the other factors cited most often (35-40%) were on-time delivery, cost-effectiveness, performance on safety compliance audits, and technical expertise. Project management, customer service, communication and transparency, and billing practices were of less importance to survey respondents.

In summary, the results of the 2015 Nice Insight Pharmaceutical and Biotechnology Survey suggest that demand for CRO services should remain strong across the globe, particularly for CROs that have a clear track record of experience, good financial stability, and a willingness to adopt new technologies that lead to increased efficiency and productivity and lower costs and project timelines without sacrificing quality and overall performance.

If you want to learn more about the report or about how to participate, please contact Nigel Walker by sending an email to nigel@thatsnice.com

Reference

  1. 2015 Pharmaceutical and Biotechnology Outsourcing Survey, Nice Insight, January 2015. By Nigel Walker, Managing Director, That’s Nice

Survey Methodology

The Nice Insight Pharmaceutical and Biotechnology Survey is deployed to outsourcing-facing pharmaceutical and biotechnology executives on an annual basis. The 2014-2015 report includes responses from 2,303 participants. The survey is comprised of 240+ questions and randomly presents ~35 questions to each respondent in order to collect baseline information with respect to customer awareness and customer perceptions of the top ~125 CMOs and ~75 CROs servicing the drug development cycle. Five levels of awareness, from “I’ve never heard of them” to “I’ve worked with them,” factor into the overall customer awareness score. The customer perception score is based on six drivers in outsourcing: Quality, Innovation, Regulatory Track Record, Affordability, Productivity, and Reliability. In addition to measuring customer awareness and perception information on specifi c companies, the survey collects data on general outsourcing practices and preferences as well as barriers to strategic partnerships among buyers of outsourced services.

 

Nigel Walker

Mr. Walker is the founder and managing director of That’s Nice LLC, a research-driven marketing agency with 20 years dedicated to life sciences. Nigel harnesses the strategic capabilities of Nice Insight, the research arm of That’s Nice, to help companies communicate science-based visions to grow their businesses. Mr. Walker earned a bachelor’s degree in graphic design with honors from London College.