iir partnerships- cro alliances in 2015
DESCRIPTION
This presentation describes what pharma-CRO partnerships may look like in 5-10 years, and how they will be different from today's outsourcing approaches.TRANSCRIPT
Sourcing 2015: projecting Sponsor-CRO Relationships of the Future
Ken Getz, Tufts [email protected]
Dave Zuckerman, [email protected]
April 2009
The Traditional Sponsor-CRO Relationship
Agenda
• Brief overview of today’s operating environment driving demand for outsourcing
• Evolving sponsor-CRO collaborative structures
• Looking to 2015• Insights from R&D –intensive analogs• Implications for biopharma sponsor-CRO relationships
Operating Conditions Driving Demand for Outsourcing
• Productivity declining and low success rates
• Rising costs and inefficiency
• Increasing volume and scope of development activity• Globalization
• Capacity limitations
• Tightening access to capital
• Growing underutilization of infrastructure and assets
Driving Vertical IntegrationDriving Vertical Integration
Preclinical Phase I Phase II-III
Percent of total spending on outsourcing
15% 23.2% 34%
Past 3-yr annual growth in outsourcing spending
10.2% 17.6% 14.9%
How long has pharma been outsourcing?
1-5 years 5-7 years for ‘services’; 15 yrs for facilities
20 years
Drivers of outsourcing Capacity needs,
expertise
Regulatory reform, capacity needs
Globalization, capacity needs
Driving New Relationship Structures
Transactional, Tactical
Strategic, Partnerships
IJ
H
G
F
DA
E
B
C
Large
Small
Mid- Size
Source: Tufts CSDD 2008 Study
What Constitutes a Strategic Partnership?What Constitutes a Strategic Partnership?
• Limited, select number of providers based on competency (not capacity)
• Long-term commitments - minimum of 3-years
• Integrated teams, responsibility, accountability
• Periodic portfolio (not project-task) review
• Shared governance responsibility
• Senior and middle-management committees
• Use of coordination SOPs
Competencies are Shiftingfrom Internal to External
QA &QA &RegulatoryRegulatory
AffairsAffairs
Planning & Planning & DesignDesign
ProjectProjectManagementManagement
DataDataManagementManagement
Externally-Externally-BasedBased
Internally-Internally-BasedBased
CompetencyCompetency
Implementing Partnership RelationshipsImplementing Partnership Relationships
• Organization-wide commitment
• In-depth assessment of core competencies best performed either in-house or by providers
• Definition of partnership elements• Goals; duration; staff credentials and availability; funding mechanism;
expected workload; transition-of-work strategy; governance and conflict resolution policies
• Select providers• Rapid centralization of provider management to single partner• Gradual consolidation of tasks and function
• Allow time and commitment to nurture and maintain partnership• 3-5 years• Constant attention to collaboration; governance; problem resolution
Source: Zuckerman, 2008
Collaborative Work Description
• Different from traditional Request for Proposal– Emphasize:
• “How do you operate & collaborate?” • “How well do our cultures align?”
– De-emphasize:• “What can you provide?”• “What are your technical capabilities?”
• Key elements of a Collaborative Work Description:– Leadership & Governance– Customer Focus & Collaboration– Strategic & Project Planning– Workforce Management & Retention– Process Management– Performance Results
Source: Zuckerman, 2008
Outsourcing fails due to relationship problems, not capabilities
Insights from R&D –intensive analogs• Movie Industry
• Decentralized development• No GC, just a director capable of sharing a common vision
and motivating a highly decentralized yet coordinated set of collaborations
• Long-term collaborations between “duos”
• Financial Services• Established fewer, more strategic global partnerships
supported by Integrated, standardized global IT data sharing and communication
Analog Insights (continued)
• Aerospace• Focus on development risk reduction• Cost-plus risk-sharing, not risk shifting
• Google• Flexible, open innovation infrastructure for third party
collaborations and team-oriented integration
• Pixar• “Technology inspires art… art then challenges the
technology” – continuous relationship improvements
Implications for Outsourcing 2015Primary Characteristics
• Integrated structure– Processes– Coordinated team approach– Shared governance
• Technology integration• Joint planning• “Accountability” contracting
– Risk minimization– Risk sharing– Alignment of incentives– Pricing transparency
What will disappear?• “Risk based” contracting
– Pure cost-plus fee has sponsor absorbing all risk– Fixed pricing shifts risk to CRO
• Ultra competitive landscape– Reduced selection & startup costs– Elimination of redundant oversight
• Conflict resolution– Shared risk/conflict planning and mitigation
• Scope changes• Slow execution
– Faster startup– Resources available when needed– Accurate planning
Role of the Niche Provider
• Third party participant in large Alliance– Sub to alliance CRO– Sub to Sponsor for specialty planning
• Alliance partner for small biotech• Status quo provider for Sponsors unwilling to develop an Alliance
2015 Partnership Alliance Characteristics2015 Partnership Alliance Characteristics• CRO becomes a true, trusted development partner
• One – three selected providers handling all ‘non-core’ competencies
• Long-term commitments - minimum of 3-years
• Completely new pricing and compensation approach
• Joint portfolio review & forecasting
• Senior and middle-management committees and shared governance responsibility
• Use of coordination SOPs
• Integrated systems and processes
The Traditional Sponsor-CRO Relationship
Future Sponsor-CRO Partnership