Guest Column | July 3, 2018

Is A Functional Service Provider (FSP) Model The Right Fit For Your Clinical Study?

By Freddy Byrth, Aimmune Therapeutics, and Andrew Chanon, SRG Woolf


As the CRO industry continues to consolidate at breakneck speed, how pharma and biotech seek external development expertise and labor support for their potential compounds has evolved. Strategic preferred provider partnerships have often turned out to be neither strategic nor preferred, leading many companies to rethink their entire research strategy and revisit insourcing (traditional staffing) and the functional service provider (FSP) models.

When Insourcing Indicates A Need For An FSP

With insourcing, companies have HR generalists handle all recruiting (internal staff, individual contract personnel, CRO) and rely on employee referrals and posting positions online to keep costs down. This strategy may be debatably ideal when hiring needs are relatively low. However, if there is a need to ramp-up quickly or the needs are varied in nature, an HR generalist may be overwhelmed and unable to keep up with demand. In this case, engaging a staffing partner as an FSP or FSP procurement/management can be a viable option.

Selecting a staffing vendor is not easy but is extremely important because the vendor's recruiters represent your brand to potential contractors — and may become your FSP management. The HR generalist likely has an inbox full of emails from staffing firms that claim to be the most highly specialized and cheapest and to have the largest database of qualified candidates. It can be hard to sort the good from the bad, and this often gets passed on to operational colleagues — the same overworked people the staffing plan is supposed to help. This is where referrals come in handy: asking peers at other pharmaceutical companies to refer their top two to three staffing vendors, then interviewing those vendors that are the best match.

Many HR generalists fall into the false notion that the more staffing firms they engage, the better their chances are to get the best candidates. What many companies do not realize is that engaging a large number of staffing firms can actually have a negative effect on a company’s brand and internal workload. If the HR generalist gives a new job order to 15 staffing vendors, the top candidates for that job will likely get five to 10 phone calls in the first 24 hours for the same job. This can lead candidates to question why so many recruiters are calling them for the same role. It can also lead to more than one staffing firm submitting the same candidate. This is solved by working through a partner that could become your FSP or other coordinated contracted headcount management.

Outsourcing To Achieve Your Goals

An FSP is a vendor arrangement that provides a variable number of headcount, usually across one or a limited number of functional areas that support the development operations for some number of clinical trials or other development efforts. The selection process for FSP providers is usually similar to the RFI/RFP process for CRO outsourcing. This can be helpful because procurement likely has templates in place for RFPs. However, much like with selecting a staffing partner, referrals are still the best way to find an FSP.

A question department and corporate leadership always asks themselves is how to get it all done balancing quality, speed, and cost. Many times, the answer is some type of outsourcing — a broad concept that all too often stops there without further delineation of real needs. If we go down the outsourcing path, other questions loom: Are we really managing our contracted relationships with good, consistent oversight and regular interaction? If we increase the volume of external support contractors, can we keep up with it all?

How An FSP Can Supplement Clinical Operations Programs

In a master services agreement (MSA)/strategic model, an FSP can supplement the matrix of provided services to compensate for changes in work volume or in needs based on geography. Clinical research happens globally, and except in the largest of firms, it is often impossible to have full-time equivalent (FTE) headcount where, when, and in the disciplines you need them. FSP and other contracted workforce management companies are built on the idea of flexing staff in accordance with shifting workloads and types.

In an individual service category model, the FSP is simply added to the cast of providers one may already have. Having multiple contractors across multiple service areas is not easy. The management of these contracted relationships will likely fall to individual departments, becoming the responsibility of individuals who may be already over-allocated, inexperienced at managing contracted relationships, or both. Adding an FSP to take over current contracts or just to take charge of new contracts can provide a vital extension of internal management resources.

Inclusion of FSPs for outsourced support is at the heart of the hybridized outsourcing model. The hybridized model ranges from hiring individual contractors to hiring discipline-focused companies (like regulatory or data management) to support multiple studies. In these instances, an FSP can manage or provide both types of contracted external support by reducing the number and variability of relationships that need to be managed.

In a traditional model, FSPs can be instrumental for both sponsors and vendors in managing changes in work volume or the addition of service categories to a development effort. Often study or program changes cause a domino effect of scope changes across vendors. Even in more robust outsourced environments, this can be difficult to manage — in less well-provisioned situations, it can be arduous. Even with full-service CROs, the inclusion of an FSP to help manage the various contracted scope changes can give a smaller biotech/biopharma needed bandwidth and a team member with a deeper understanding of the nuances of being a vendor.

Why is the FSP feared if it can fit rather easily in multiple formats? Are the fears realistic? The common commentary that FSPs are “staffing on steroids” or a “diet CRO” gives some insight. In what we like to think of as the more-traditional models, an FSP is simply not easily described and falls prey to our busy (often overloaded) schedules and the myriad of things upon we must decide. An inability to easily categorize FSPs or FSP-like structures relegates them to “new/different” status, which can be a death sentence for those trying to figure out what kind of external support will be contracted. A common phenomenon in larger pharma is palpable xenophobia to “new,” whether it be new vendors or new methods for running the business of drug development operations. Ask enough questions the right way, and soon enough decision makers will cite another team’s choice as a principle reason for the choice they made — this is very prevalent in vendor or outsourcing method choice. So, FSPs often have little overt/highly visible history (versus other traditional methods) as a service/support structure in many companies and therefore have a steeper consideration hill to climb with decision makers.

Why To Consider An FSP

  • The downward effect on the number of outsourced relationships that need to be managed/maintained. The more contracted relationships you include, the more time/headcount is needed to be effective in the relationship. Using an FSP or FSP-like method helps keep the number of management relationships from growing beyond controllable limits as new services are called for or current service headcount expands. Internal resources to manage contracted resources are often at a premium inside any drug/device development organization.
  • FSPs can provide a vital extension of the reach of internal oversight resources. Each contracted relationship takes care and feeding to work to its potential. The turn-the-key-and-walk-away method doesn’t really work, except in the briefest of deliverable timelines with the simplest of services. The oversight of quality, progress, and finances takes time and effort from both parties. As sponsors, this translates into FTE headcount, which may be in short supply, needed for other tasks, or both. Establishing a consistent management relationship with an FSP manager that understands the requested budget, quality, and time frames helps extend your internal management’s capacity without using more FTE resources. This could be a boon regarding performance monitoring of what otherwise could be multiple individual contracts across many service areas.
  • The model flexes with workload more easily than any other. CROs and FSPs are built to flex staff load with changing contract needs. Many development organizations are adept at onboarding new personnel, but not necessarily good at flexing staff levels. An FSP brings a management structure into the mix that handles all of the expansion, contraction, and changes in service needs and matches available resources.

So, the question recurs: As department and corporate leadership, are we really managing our contracted relationships with good, consistent oversight and regular interaction? If the volume of your outsourced labor gives you reason to question this, following an FSP model may enable you to answer the question.

About The Authors:
Freddy Byrth is a veteran of the pharma/biotech industry, with global drug development experience in both pharma and CRO environments. He has overseen clinical operations and project management in over 30 countries. Beginning as a clinical research associate in the early 1990s, his career has included compound-level clinical operations management, project management, and department-level business management. Byrth is an active and respected member of the Research Triangle Park, NC-area clinical research community, and is a director of clinical operations for Aimmune Therapeutics.  He resides in Chapel Hill with his wife and two daughters.

Andrew Chanon began his career in the clinical research industry in 2005 and worked for nearly a decade at ASG, Inc .(which later became Ockham and then Chiltern). He joined SRG Woolf Group in 2014 and specializes in clinical operations and biometrics staffing.  Chanon is a well-respected member of the Research Triangle Park clinical research community.  He lives in Chapel Hill with his wife and 2 children.