Clinical Outsourcing Observations And Predictions
By Dan Schell, Chief Editor, Clinical Leader
Maybe it’s a sea change. Or is it a tipping point? No, wait, how about … a paradigm shift. No matter how you describe what’s happening with CROs these days, you can’t deny something has changed — and is likely to continue to change. And no, I’m not talking about the mass layoffs, or shortage of staff, or even the high-profile negative financial news surrounding CROs like Fortrea. I’m talking about how CROs are being viewed and utilized by sponsors. Actually, it’s not me doing the talking … it's Samir Shah. And he’s got a lot to say, and it challenges the current outsourcing paradigm with traditional CRO offerings.
Shah’s no stranger to voicing his opinion on change in the clinical trial industry, specifically around the rise of the functional service provider (FSP) model. A consultant with 24-years of CRO experience, mostly in senior executive positions, he wrote a December 2023 article for Applied Clinical Trials called “Anticipating Near-Term Structural Change in the Outsourcing Landscape” and a September 2022 article called “Redefining CRO Sourcing Model Terminology to Optimize Outsourcing Strategies.” What prompted our conversation were some LinkedIn comments he made about how the FSP model is “recognized as the primary approach for the world’s top 10 largest biopharmas” and how independent clinical sites are consolidating into large site networks.
A SHIFT IN OUTSOURCING STRATEGY
Shah says, at least for large and midsize pharmas, the idea of full-service outsourcing to CROs is falling out of favor. He cites companies like Pfizer and J&J as examples of those that have shifted to 80+% of their outsourcing strategy being dedicated to an FSP model. Even a recent report from Worldwide Clinical Trials that surveyed 140 decision-makers at various sized pharmas and biotechs stated, “Nearly 80% of respondents agreed that the ‘one-stop-shop’ claim that many large CROs market is not a cost-effective business model due to the lack of seamlessly integrated service delivery.”
Shah believes that there is a general feeling in the industry that full-service CROs are underperforming. “Consequently, some pharmas are seeking best-in-class services for things like clinical monitoring or data management. They are finding that working on a single operating platform under their SOPs and processes and having tighter control of their data and clinical operations is a strategic and competitive advantage.”
So what about all the bells and whistles and vast infrastructure large CROs have created? Shah is quick to note that he doesn’t foresee the full-service outsourcing model going away; it just will be a better fit for smaller biotech and pharma companies. This notion is supported by a 2022 McKinsey & Company report that states biotech companies are expected to drive the greatest growth in CROs. Shah does, however, foresee another change coming for CROs, and it’s related to a different growing trend.
THE RISE OF THE SITE NETWORKS
The next ingredient of this new clinical landscape is the site network. Some of the larger ones that Shah says to keep an eye on are CenExel, Velocity Clinical Research, Flourish Research, and ERG Clinical.
In general, site networks are growing in scale and significance. Shah says to watch for more of them to be purchased by private equity firms, which in turn, will grow their number of sites and make them more efficient. They will look for new ways of recruiting and retaining patients, and these larger networks likely will start offering additional adjacent services such as protocol design assistance, medical monitoring, and data management. All of these changes will increase interest from pharmas that are deploying an FSP model. They will want to partner directly with these networks, thereby bypassing CROs entirely. “If you look at three years ago, more than 75% of site networks’ revenue came from CROs,” Shah says. “Now it’s closer to 50%, and I predict that number will continue to go down. Pharma wants this scenario to happen because they get to own the relationship more closely with the investigator, who is the prescriber, and ultimately, their customer.”
Of course, as all of this transpires, large CROs also will look to acquire additional sites and site networks. Shah says companies such as ICON, IQVIA, and PPD have already done so.
CONTRACT AT A PORTFOLIO LEVEL
The final point Shah wanted to make during our interview wasn’t another change that is currently happening in clinical outsourcing, but instead, was more of an option he was suggesting for the future. Namely, he believes pharmas should contract at a portfolio level rather than for an individual study. For example, traditionally, you would tell a site network you need X patients that fit X inclusion/exclusion criteria for one trial. “What I’m suggesting is, you tell the site network about, say, 20 studies you’re planning, and you have them match their patients to your portfolio,” explains Shah. “Then, in a year, tell them you need 500 patients at high, medium, and low protocol complexity levels across X protocols. They choose the sites. In this scenario, there is a better chance the network will have fewer non-enrolling sites than in a traditional trial, which cuts expenses for sponsors and helps sites make more money.”
As an industry observer, Shah’s background and vast experience add credence to the theories he posited during our conversation. And let’s face it; some of these changes have been brewing for years. How they manifest — and when — will determine whether they constitute something akin to a paradigm shift, or just another swing of the pendulum.