Consultants, PPAs, And Loyalty: Trends In Phase II/III CRO Benchmarking

By Ed Miseta, Chief Editor, Clinical Leader

ISR Reports recently released the 13^th Edition of its Phase II/III CRO Benchmarking report. Many sponsor companies turn to CROs for the heavy lifting of their clinical development programs. Still, finding the service provider best suited to meet trial needs and performance expectations is a difficult task.

The 13^th edition of the Phase II/III CRO Benchmarking report features insights from 237 outsourcers and more than 800 service provider encounters. Insights in the report include CRO selection considerations, brand positioning, brand loyalty, and attribute-specific strengths and weaknesses.  

I spoke to Sherry Hubbard-Bednasz, market research director for ISR Reports, to gain additional insights to the report and some of the key takeaways.

Ed Miseta: Approximately 80% of large sponsor companies have a preferred provider agreement (PPA) in place. What surprises me most about that number is that 20% of large companies do not have one. Can you share some of the advantages and disadvantages of having a PPA?

Sherry Hubbard-Bednasz: The process of establishing a PPA between a sponsor and service provider varies – size has a lot to do with it. The larger the entities, the more formal and intricate the partnership. A lot of time, money, and resources go into the conferring process. Both parties go to great lengths to assess fit and expectations. For good or bad, an established preferred provider gets first dibs at potential awardable work. Locked-in contracts can be perceived as a luxury (vetting process complete, no surprises) or an obstacle (lackluster prior performance, etc.). Occasionally a respondent’s reason for his satisfaction rating with a provider will say something to the effect of “we inherited this CRO with the merger and it’s been a bumpy ride.” We don’t see such candor often, but when we do, it helps put that 20% in better context.

Miseta: Regardless of whether a company has a PPA, the most important attribute for most of them seems to be operational excellence. Can you define that? What specifically are companies looking for and how do they know it when they see it?

Hubbard-Bednasz: Yes, year after benchmarking year, we see operational excellence as a universally shared provider selection driver. For Phase II/III, we provide a pick list of 24 attributes – a hefty list for a complex process. We ask respondents to select their top five and most important. It is our way of getting respondents to put their selection process in black and white. Everything can’t make the cut. So, what does? Some things continue to stick over time, while others shift in position of importance. Indeed, operational excellence is the crown jewel of selection drivers. Sponsors want the assurance that a provider can unequivocally a) provide and execute the right services, b) be a good cultural fit, c) understand fully their trial needs and expectations, and d) put forth the flexibility, resources, and expertise to adapt as change warrants it.

Miseta: I was surprised that 75% of respondents noted they do not use consultants. That seems like an easy way of acquiring the expertise you lack. Any thoughts on why more companies do not make use of those resources? And are there specific types of companies that do choose to use them?

Hubbard-Bednasz: It’s important to note that we modified the probe about consultant use this year. Last year, we asked the question in a more general fashion and received a mixed bag of responses. This year, we wanted to glean a more precise look at who is using specialized outside consultants to help with the identification and selection of CROs for their Phase II/III project work. While we are not entirely surprised by the 75% who do not use consultants, we are a bit surprised by the even split across company size of the 18% who do use them. One could argue that small companies need more help in finding the best-suited provider, especially with so few having PPAs in place (only 8%). On the other hand, consultants can be costly, and large pharma typically has deeper pockets to pursue such assistance.

Miseta: The top CROs in terms of familiarity, leadership, and use of services are IQVIA, Parexel, Covance, PRA, PPD, ICON, and Syneos Health. But those companies are generally not mentioned in the top performers across the performance categories (budget factors, delivery, staff, and services). How would you explain that difference in rankings?

Hubbard-Bednasz: Isn’t that something? Yes, these providers – the biggest CROs – continue to dominate across the dimensions of familiarity, leadership, and usage. More than 80% of respondents reported being familiar with the company’s services for five of the seven, and two-thirds of respondents considered four of the seven to be leaders in the field. Those are impressive stats. But high brand positioning doesn’t necessarily mean top performance is a side car. Our benchmarking methodology does a good job of teasing that out. Not to say that “average customer experience” is not good performance. In fact, most of the big seven did just that across the board. As for the top performers, we see this quite a bit – lesser known providers who show performance chops but simply do not have that elevated brand positioning (yet). It’s what we call ‘hidden gems.’ Building industry awareness will allow them to shine.

Miseta: When it comes to customer loyalty, the top three service providers for Phase II/III were Parexel, Worldwide Clinical Trials, and Covance. Based on how you compute that loyalty index, what would you say those companies are doing that others should try to emulate?

Hubbard-Bednasz: Our customer loyalty metric is based on respondents’ overall satisfaction with a provider, likelihood to recommend, and likelihood to use again. Talk about a power metric. Providers learn their potential for repeat business. Sponsors learn who is satisfying their customer base the most. Parexel consistently garners above industry average loyalty scores. This year, Local market/Regulatory knowledge was their top performance attribute according to users. Worldwide Clinical Trials has made a big climb up the loyalty and performance ladders the past two years. Responsiveness and Data quality were their top performance attributes. Customer loyalty for Covance has steadily moved up the past few years. Interestingly, their top attribute matches Parexel’s: Local market/Regulatory knowledge. Granted, many factors go into why a company continues to stay with a brand. The secret sauce is ever-changing.