Please submit your questions on outsourcing clinical drug development using the form at the bottom of this page. Each month, John R. Vogel, Ph.D., or a guest consultant will post one or more questions along with an answer.



Question: What are the advantages and pitfalls of creating a central CRO contracting department at my company?
Answer: Several pharmaceutical and biotechnology companies have created "outsourcing management departments" with positive results. Outsourcing managers perform a variety of functions. They maintain a database of potential vendors, provide recommendations to project teams and assist in preparing requests for proposals (RFPs). They also manage the review of the bids, assist in negotiating the service contract, participate in problem-solving when requested by the team, and assist teams in reviewing invoices from vendors. Some initiatives by outsourcing management departments have generated cost savings; others have not. Reported benefits include accelerating contract negotiation through master agreements, reducing costs through elimination of non value-added services, and eliminating cost overruns by more closely monitoring vendor budgets and formalizing change orders. A potential disadvantage is that the manager may act as a gatekeeper and limit vendor access to project teams. Also, lack of technical expertise could limit the manager's ability to evaluate vendors and to assist in solving problems. Some cost-saving initiatives (e.g., discount vendor lists) may impose limits on the team's ability to choose the most qualified vendor. You may find it helpful to contact The Pharmaceutical Outsourcing Managers Association. It was founded in 1995 to encourage the exchange of information among its members.

Question:

My company plans to outsource an important phase III study. The CRO suggests that we use its services to audit the study and ensure GCP compliance. Is it realistic to have a CRO audit itself?
Answer: The notion of a CRO auditing itself raises obvious questions about the potential for conflict of interest. However, most CROs ensure the validity of their auditing services by creating regulatory compliance groups that report directly to senior management and not to the clinical operations department. Many sponsors find this to be an acceptable practice. Another approach is to employ an independent quality assurance and regulatory compliance group. A recent search of the Drug Information Association Pharmaceutical Contract Support Organizations Register under the key words "GCP auditing" yielded 18 organizations that provide clinical auditing services.

Question:

Are there commercial directories of CROs?
Answer:

The Drug Information Association website (www.diahome.org) includes a directory of Contract Service Organizations. You can search by company, service, or by keyword. Several other directories are available commercially. The CenterWatch Industry Directory is available from CenterWatch (www.centerwatch.com). Technomark (www.technomark.com) publishes regional CRO directories for North America and Europe.

A more selective approach to identifying those CROs best suited to your particular project is to "prequalify" vendors according to your specific needs (e.g., therapeutic area, range of services, geography). The steps in prequalifying CROs were described in an article entitled, "A Case Study in Evaluating and Selecting a CRO", that appeared in Applied Clinical Trials, 5 (6), 30-36, 1996. Reprints are available at www.pharmaportal.com. The process is also described elsewhere on this website under Find Qualified Service Providers.


Question:

My company is currently negotiating a preferred provider agreement with a CRO. What type of performance metrics would you recommend to monitor the overall performance of a preferred provider CRO?
Answer:

Preferred provider agreements are negotiated with the expectation that both the pharmaceutical sponsor and the CRO will benefit. The sponsor hopes to limit the number of vendors with which it works and to receive discounts in return for an increased volume of work. The CRO expects to reduce its business development costs and to receive a steady stream of work from the sponsor. Both parties anticipate greater efficiency as they become more accustomed to each other's standards and procedures. Some useful metrics for managing preferred provider relationships are:

  • Personnel qualifications (e.g., training and experience level of personnel who will be assigned to the CRO team)
  • Cycle times (e.g., time from completion of a site-monitoring visit to receipt of the monitoring report by the sponsor, time from patient completion to entry of the CRF in the database, time from last patient completion to database lock.)
  • Timing, format, and content of reports
  • Acceptable error rates in critical and non-critical areas of the database
  • Billing practices (e.g., how to ensure that pass-through costs are promptly reimbursed while service fees are tied to deliverables)
  • Efficiency of the relationship (e.g., ratings by the sponsor and CRO of the quality and timeliness of information for making key decisions)

Many preferred provider agreements fail to reach sponsor and CRO expectations because the two parties are not measuring the "same thing". Sponsors typically focus on process, i.e., whether the CRO is doing things "our way". CROs usually focus on outcome such as using the most efficient approach. For this reason, it is important that the sponsor and CRO mutually define the metrics that will be used to manage their relationship. Some of the metrics will be applicable to a range of projects while others may be project-specific. Simply imposing the sponsor's pre-conceived metrics on the CRO is not advisable.



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