Successful pharmaceutical outsourcing requires realistic and well-defined expectations, a strong vendor-client relationship, and continued client involvement in the outsourced project as it evolves. In the pharmaceutical industry, there are two fundamental ways to outsource:
– through tactical partnerships
– through strategic partnerships
Tactical partnerships are less mature relationships with a contract research organization (CRO). They are driven by an immediate client need, and often established to maximize cost savings. They are often entered into through a competitive bidding process and are designed to satisfy short-term goals.
Conversely, strategic partnerships tend to evolve over time. They generally involve greater investment in the project by the CRO, which might be a larger operation able to provide more comprehensive list of services. Cost savings does not drive these outsourcing relationships as much as the established trust that develops between the client and the vendor. Strategic partnerships are therefore considered more mature vendor-client relationships; they are ongoing partnerships that often yield greater quality and satisfaction.
While strategic partnerships are not established based on cost savings alone, this is not to say that they are necessarily the more expensive option. There can, in fact, be significant cost savings involved in outsourcing to one primary vendor. The savings can be as simple as fewer contracts to negotiate. However, savings generally go deeper.
Working with one or a small handful of vendors means that the people working on the project have continuity in their knowledge as the project evolves. This continuity is lost if the project hops from one vendor to the next. Strategic partnerships also require buy-in at an executive level, from both the CRO side and the client side. This sets the CRO up to be more invested in the project and feel a greater sense of responsibility to get it done in a timely manner while adhering to high standards of quality. However the downside is that because the CRO can become so embedded in the client operations, if one fails, both can fail.
Strategic partnerships don’t spring up overnight. At Assay Depot, we often observe that they start as tactical, smaller outsourcing projects and usually grow as trust is established between the vendor and the client .
As the pharmaceutical outsourcing strategy evolves toward long-term relationships, preferred-providers and relationship management programs and tools such as Assay Depot will continue to enhance the level of efficiency and alignment between user and vendor in pharmaceutical outsourcing.
- Pharma R&D Outsourcing Market Partnership Models and Emerging Destinations Reviewed in New Research Report. PR Newswire. September 4, 2012.
- Partnerships Series: Strategic vs. Tactical Outsourcing for Pharmaceutical Sponsors. ERT blog. Feb 29, 2012.