Why Your CRO's Employees Should Resemble Your Own

By Ed Miseta, Chief Editor, Clinical Leader

Renold Capocasale, founder and CEO of FlowMetric, has been involved in the pharmaceutical industry for 18 years. His first job, in 1996, was working for a small biologics company doing research and quality control. At his next job, Centocor (purchased by J&J in 1999), he worked as a pre-clinical research scientist on multiple biologics programs related to autoimmunity and cancer. He had a successful career and found the work rewarding.

Unfortunately, all of that changed in 2009. In the pharma world, post-2008 recession and patent cliff, the industry had too many people working on projects that were not getting to market. “All of a sudden, a gap existed in full-time equivalent expenditure that could be validated for the level of pipeline expenses being generated,” says Capocasale. “Many of the pharmaceutical companies, including Johnson & Johnson, started a period of rather significant layoffs. What was significant about that time (2008 into 2009) was companies laying off research people.”

Traditionally, when pharma faced layoffs, they would come from the ranks of sales and marketing personnel working on programs that were unsuccessful or becoming obsolete. Capocasale believes this is one of the first times the industry saw whole groups, core competencies, being eliminated on the research side of the house.

Pharma Understands Pharma

Renold Capocasale, Founder and CEO, FlowMetric

Capocasale himself was laid off in the fall of 2009 and wasted no time moving on. It took him just two days to decide he wanted to start a CRO, and less than three months after leaving Centocor, using his own 401(k) as startup money, he incorporated FlowMetric. A family and friends round of funding helped raise an additional $2.5 million, which allowed the company to land a location in the Pennsylvania Biotechnology Center in Doylestown, PA. Less than four years later, the company was profitable. His goal all along was simple: develop FlowMetric to resemble a pharma company as much as possible.  

Capocasale certainly recognized a need in the market for the services offered by FlowMetric (flow cytometry and cell sorting services). But he also knew the caliber of employees would be a primary factor in differentiating his company. For that reason, he made the decision to pursue scientists with experience at pharma companies.

“I wanted to hire people with a strong knowledge base centered on drug development and discovery,” notes Capocasale. “I knew for our company to be successful we had to hit the floor running. Someone coming from the academic world might be a highly talented scientist, but many of them don’t know, or don’t have an appreciation for, the demands of pharma. There is a significant learning curve that exists in this industry. In addition, academia does not have the extremely tight and rigid timelines that exist in pharma. Anyone coming from that background is not familiar with the rigors of this industry.”

Everyone Must Focus On Quality

Having the right personnel on hand is only half the battle. In order to have a good partnering relationship with pharma, CROs need to be intensely focused on the factors most important to the client. At the top of that list is quality.

“Every relationship has to be driven, first and foremost, by quality work,” says Capocasale. “If you're a CRO and don't understand your work is going to be vetted, analyzed, double-checked and triple-checked, you're in the wrong business. You may be large and have done voluminous amounts of work, but that is not something you can hide behind. Customers will focus on quality throughout the project, regardless of who you are or the number of projects you performed.”

Timelines and economics are important, and are closely tied to quality. Capocasale notes vigilance is required to ensure quality work is always performed. Management must stress mistakes are not going to be tolerated. Everyone in the chain of command, from the lowest level technician to the highest level director or VP, must be aware of that. “Everyone should feel their job is in jeopardy if the proper attention is not paid to quality,” he adds. “Clients need to know you are going to do the work you have promised, and that you are performing the proper checks to ensure it is being done correctly.”

Having the right people in place will help guarantee proper results. Capocasale is confident that his relationships have been successful because he can tell clients he has been in the exact spot they are in. Employees who have spent time in pharma will be better able to understand the tight timelines and the importance of quality. When your entire team is made up of former pharma employees, it can add a new level of trust to the relationship and is something sponsors should seek out.    

Value vs. Price

When ranking the factors most important to them, most outsourcing executives will put quality and timeliness near the top of the list and price near the bottom. Although pricing does not seem to be a primary concern for sponsors, many will be reluctant to consider proposals that are not in line with others. Some will even push for better terms, either in the negotiating process or once the job is underway. This makes pricing a potential obstacle for a successful partnering relationship.

Capocasale mentions, “Of course, pricing is an important factor for all stakeholders. We understand that and our value proposition to our clients solidifies that price is a means to an end. The real value of finding a good partner in outsourcing is having a partner that will go the extra mile for you by providing uncompromising service.  In effect, a partner that is an extension of your own employees, internally.” 

So will getting more former pharma employees working for CROs help to eliminate issues that exist between partners, and build stronger strategic relationships? Capocasale certainly thinks so. It will bring the two sides together on quality and timeliness issues. When developers understand that pharma professionals are conducting the testing and trials of their drug, potential pricing issues could also be eliminated. After all, if former pharma professionals are doing the work, why expect them to accept less than you would for the same work?

But more importantly, going forward, Capocasale thinks one change that will occur in the clinical outsourcing market is pharma looking for greater expertise from their CRO partners. An obvious place for CROs to get that expertise is from pharma employees migrating over. “Right now, clients tell us how unique we are,” he says, “so I may be giving away the keys to the kingdom here. This industry can tend to be cyclical. When the cycle is trending down, Big Pharma companies will lay off a large number of people. When that happens, there is a large pool of very talented people sitting around. I don’t think it should be a surprise that what we did was successful. It was unique and it was necessary from our perspective, but I think eventually the rest of the industry will realize that as well.”