The Functional Service Provider (FSP) model has experienced an accelerated adoption and increase in popularity in recent years, due, in part, to the flexibility and control it affords sponsors when compared to Full-Service Offerings (FSOs). The potential benefits of employing FSPs are alluring – increased quality, decreased costs, strategic control, and greater brand recognition can all be achieved with the right FSP structure. Despite this, many clinical trial sponsors are reluctant to shift away from a more comprehensive reliance on the FSO model, having already transitioned many of their core functions to their CRO partners.
Despite their increasing use, some misconceptions exist surrounding FSPs, particularly when compared to FSOs, which have held a larger share of the market in the last few decades. More recently, an increasing number of sponsors, particularly larger and more established ones, have embraced a hybrid approach to outsourcing, employing both FSPs and an FSO model — which may make sense as a transitional state while moving to an internal/FSP model —or as a way to integrate smaller acquisitions, which typically use an FSO. Building a strategic sourcing strategy requires investing in certain core competencies while divesting in other areas, which can often equate to a multi-year process. But failing to engage in this strategic planning can also have wide-ranging implications for biopharmas that, in a few years’ time, may result in widening gaps between those who are proactive in evaluating their outsourcing models and those who delay.