In May 2019 Clinical Leader Live was proud to feature Laurie Halloran, president and CEO of Halloran Consulting Group. Ms. Halloran presented on the topic of In-House Vs Outsource: Decision-Making Considerations. During the presentation, she covered performing an accurate self-assessment, the organization maturity model, the transformation of the clinical operating model, the trends in CRO outsourcing, and determining what outsourcing model is best for you. In this video, Halloran discusses how to balance growth with your outsourcing needs.
Question: We are a small 20-person company. I'd like to hear about experiences in balancing growth with hiring key personnel where there's a lack of knowledge within the organization.
Laurie Halloran: This is the perfect example to take from what I just described and shared.
I think the biggest thing that you should consider is what is your overall organization's business goal? This is something you could just ask your senior management and you should be able to get an answer.
Are we setting ourselves up to become a commercial stage company? Are we going to develop our products all the way to market? You may have an inkling of that based on the efforts you see to try to raise money and whether or not money is plentiful. It's very much a one size fits one.
If you have Phase 3 programs and they aren't massive global programs with hundreds of thousands of patients that you have to manage, especially in an organ disease space, you might be able to commercialize your products and not necessarily become a target for acquisition. If that's the case, you should be considering how much you can build internally versus outsourcing, because your executive management really wants to take the company to a level where you’re commercial.
There's almost a little bit of a tipping point, not 20 people, but when you're getting up around a hundred, where you really want to consider what you should build for long-term success and a decrease in reliance on vendors versus what you should buy. That really is a key factor, plus the business goal.
Another question really is around determining the best model of outsourcing. This is really related to that because, if your company is going to be around and commercialize products, if you have a rich pipeline, if you have a platform, if you have multiple products that are in development and likely to go to commercialization, if you have partnerships where there's going to be commercialization in other countries by bigger companies and you're going to keep US rights, that’s an opportunity for you to build some internal capabilities.
In that case, you might need full scope of outsourcing, maybe even a strategic relationship, but you're going to invest a lot of time and energy into that strategic relationship and, if you're ultimately going to commercialize, you might want to divert a little bit of your planning and do some building versus outsourcing. I hope that makes sense.
Ed Miseta: That seems like it's a big question in and of itself. If you decide to outsource, should you look for that a CRO that provides an all in one package or should you be looking at individual functions that you could outsource? I guess that's going to be different for every company, as well.
Laurie Halloran: Yeah, a lot of people, especially if you've come into a company where they have a product and it’s already in phase one or phase two and maybe they have a bigger pipeline behind you that's going to be coming up along, there may be one CRO and that that almost defacto constitutes full service outsourcing. But that doesn't necessarily mean you're stuck with it. A lot of it is how much has already been invested and this is really related to the size of the company.
If you are a clinical development organization of less than 25, think about whether or not you want to stay like that and really build internal capabilities on a new program, potentially maybe as a pilot, and have a multiyear plan to build for purpose, given the type of program it is, so that you can test the waters and, modify your SOPs and modify your use of technology and build your internal capabilities on a program that's potentially coming up next year versus something that that's already outsourced.
I guess I would say the rule of thumb is don't fix what isn't broken. If the outsourcing relationship is working okay and you really are thinking about trying to build internal capabilities, you don't need to change midstream for a new program. On the other hand, you might need to do something more urgent.