The last 5 years has seen a step change in how the biopharmaceutical industry considers investments in enabling technologies for drug development. Companies involved in developing lifesaving medicines for patients have recognised that an on-premises stack of bespoke and/or highly customised applications requires a continual significant investment in technology and capabilities that are not core to the business of developing life-saving medicines.

The advent of cloud based Software as a Service (SaaS) options has opened up an entirely new conversation on how pharma companies enable the efforts of their researchers, especially in the most time consuming and costly phase of early and late stage clinical development, and what that means in terms of capital expenditure, operational expenses and capability development.

For those involved in Clinical Research, we are reaching the point where the technology they rely on to do their work can truly become an enabling force that helps them achieve their research and development objectives instead of a hodgepodge of control technologies put in place to track and manage activity across the system.

R&D Technology, with modern user interfaces, is fast becoming a tool that unlocks value by serving the needs of drug development. This creates a very different operating environment, not only for the Clinical Research Professional but also for the businesses, which have until now been obliged to absorb massive inefficiencies just to allow the business to track and manage the scale of global activity.

A significant knock-on effect of these changes lies in how companies will interact with their development partners and with their Contract Research Organisations (CROs) in particular. There is immense value for companies to unlock by reducing friction at the boundaries of the firm between Sponsor and CRO. A cloud based SaaS platform that is widely used across the industry creates an entirely new paradigm for the relationship between a Sponsor and their CRO. Success in this new world will depend on the ability of both sides to adapt and realise competitive advantage in the cost and speed of pharma product development.

Untapped synergies between Sponsor and CRO

What drives friction between a CRO and a Sponsor in Clinical Research? The supplier relationship management between Sponsor and CRO has a number of structural features unique to the highly regulated, complex and expensive business of drug development, giving rise to the most common issues that arise between Sponsors and CROs. Specific issues vary and can be complex, influenced by relationships, geography, therapeutic area and other factors, but typically fall into three areas of dissatisfaction on the part of the biopharma sponsor:

1. How outsourced activities are accomplished
2. Visibility and transparency of outsourced activities
3. The cost of outsourcing and development

The central mission of biopharma development functions is to generate, and present, data on a therapeutic option for patients that will allow it to receive marketing authorisation. Outsourcing these activities is inevitable given the global scale of operations now required, but biopharma has never been entirely comfortable handing activities over to CROs. This explains one aspect of why development costs have continued to rise even as the use of outsourcing has expanded, become increasingly sophisticated and grown to include more service areas.

The emergence of platform technologies for drug development finally provides a mechanism for biopharma to realise the cost advantages of outsourcing that have largely eluded them for three decades.

In short, delivering a clinical trial could become much more analogous to building an automobile. Designed on a common platform, a product (e.g. the clinical trial) is executed, or delivered, to well-defined specifications, combining the capabilities of multiple organisations, internal and external to the coordinating owner of the development asset, who is continually assured by real time reporting.

We foresee a revolution coming in biopharma development driven by the emergence cloud based SaaS solutions as the key enabling applications supporting biopharma product development.

How activities are accomplished - your process will not matter

For now, process definitely still matters. Companies differ in the documented, and undocumented, processes they follow to prosecute the complex business of drug development. These differences contribute, along with other factors, to variations in performance and outcomes. Companies typically seek performance gains by changing their process, often triggered by the deployment of a new enabling technology. Indeed the successful implementation of a given technology often rests on the extent to which the company has been able to adapt its existing processes to exploit new functionality offered by new technology.  In effect, companies today, both CROs and Sponsors, compete to a greater or lesser extent on the quality of their process design.

Process convergence

The impact of a widely used SaaS application is to drive processes in an industry towards convergence. Different configurations are of course possible and allow for some process variation, but the degree of this variation is limited and much less between companies using the same application than what we would expect to see between companies using different applications to perform the same set of tasks. In addition, configuration is more relevant to the decision to use, or not to use, specific features, while the underlying design philosophy of the software, embedded in the core feature set, dictates that workflows across companies on a given application will be very similar.

Accelerating this convergence, a limited number of implementation partners typically help companies deploy solutions. These partners often reuse configuration, workflows, and process designs to accelerate deployment. Indeed this is expected by their clients and illustrated by language such as best practice, optimised, archetype and proven.

For a Sponsor to have a CRO follow the same process they do is optimal. It simplifies oversight and performance management. This is the driving rational for functional service provision or FSP outsourcing models over Full Service Outsourcing (FSO). Dictating the process and systems used by provider resources helps to ensure quality and compatibility with Sponsor ways of working upstream and downstream from the outsourced activity. 

Streamlining outsourcing models

Under current models of FSP, this degree of control and flexibility comes at a premium. The CRO is asked to dedicate resources exclusively to the Sponsor. Resources work only on Sponsor processes and systems are no longer available for other work. This requires Sponsors to commit to a minimum volume of demand and the Sponsor typically agrees to forecast any changes to ongoing demand well in advance.  The CRO trains their resources to work according to the Sponsor processes and on Sponsor systems. The Sponsor will need to provide access for CRO resources to Sponsor systems. The CRO may not commit to performance levels because their staff follow the Sponsor’s process rather than that of the CRO.

Now, consider the case where a Sponsor selects a CRO using the same platform technology to conduct a given functional activity. The CRO process is largely indistinguishable from the Sponsor process, resources are easily redeployed within the CRO and the training costs are minimal or eliminated. Under SaaS license models an enterprise wide license means that the Sponsor could conceivably pay no more in license fees than they are already paying and the CRO will not need to pass-through any such costs either. FSP premiums suddenly seem less justifiable under a co-platforming arrangement, especially if the need for dedicated resources is reduced by the availability of, and access to, a larger pool of trained talent.

Co-platforming with CROs is potentially even more advantageous for Sponsors under a FSO model. Identical, or even just sufficiently similar, processes mean that many of the benefits of FSP, in terms of consistency and compatibility of approach and interoperability with a Sponsor’s in-house infrastructure can be achieved with a lower cost, more easily deployed and modular, i.e. study-by-study, outsourcing arrangement. Reporting and oversight becomes more straightforward and more easily integrated with the rest of the development portfolio.

A biopharma research Sponsor’s ability to compare performance between different outsourcing arrangements; multiple providers, and even between in-house and outsourced delivery models is greatly simplified by the use of a common platform technology enabling the delivery of services. The process convergence discussed earlier ensures that the different arrangements compete on the quality of outputs and ability to execute. This holds out the promise of an “apples to apples” basis for the comparison of available delivery options and means that Sponsors can be more confident in the performance claims of any new provider under consideration because they can be verified and will be based on the use of the same, or very similar, processes and systems. 

Rapid dissemination of best practice eroding competitive advantage

The increasing prevalence of cloud-based, SaaS technology among Sponsors and CRO providers for the enablement of drug development operations will drive process convergence within specific technologies servicing specific functional areas. This means that competitive advantage will no longer be derived from process design excellence; instead, the advantage will accrue to organisations who execute the process most effectively. Any advantage in process design is short lived in an ecosystem where companies work on the same platform because any process innovation that confers an advantage will proliferate much more rapidly than today.

In effect, the minimum cost of achieving only average performance will be adoption of the most popular SaaS solution. This is because sharing in the benefit of ongoing technology enhancements, introduced by successive releases and guided by the collective requests of customers who face the same challenges, Sponsors and CROs have to be using the technology, and this brings process convergence. Process convergence is itself a benefit because it reduces barriers and cost of achieving and maintaining a base level of good performance. From 2020, moving to a cloud-based SaaS platform for biopharma development operations enabling technology is table stakes.

For leaders who want to outperform the industry it will not be enough to adopt a unified cloud-based SaaS solution or a collection of SaaS solutions to enable Clinical, Data management, Regulatory and Safety. Biopharma companies seeking a competitive advantage in development operations will make strategic intentional investments in CRO partnerships to exploit the features of cloud-SaaS and make their supplier relationships as seamless as possible, maximising the flow of information between Sponsor and CRO.

Sponsors that do this will position themselves for success while those that adopt SaaS in isolation from their suppliers are simply making the minimum necessary technology upgrades and moving the technology stack outside the boundary of the firm. This may be the key focus of activity today but it is, in reality, housekeeping.

Visibility and transparency of outsourced activities – brightening the corners

Biopharma Sponsors often worry they do not have sufficient oversight into the activity of their CRO partners. At many, if not most, pharma companies, the primary role of in-house Clinical Operations is to manage and oversee CRO partners. Partnership agreements are replete with service level agreements, governance structures and escalation pathways. Pharma executives frequently hear that a particular operational capability is maintained in-house to retain up to date knowledge on how to conduct that activity because up-to-date knowledge is necessary to allow sufficient oversight of, and guidance to, CRO partners.

Sponsors accountability limits cost reduction from outsourcing

It is a compelling argument. The central problem of outsourcing in the highly regulated world of biopharma development, where companies manage patients, their wellbeing and their data, is that it is uniquely impossible to outsource risk and accountability.

Anything that puts a barrier, for example using a CRO, between an IND in the field and the owner of the asset in development creates additional risk and the more risk, the greater the desire for control. This is why CROs compete, among other things, on the quality and velocity of their reporting of activities to clients. We are drowning in dashboards and reports. Reporting ability is an odd capability to compete on in a digital world.

If a CRO and a Sponsor co-platform on a given technology the opportunity presents itself for data equality. Data generated by a CRO should have the same standing as that generated by in-house teams. After all, if data comes from the same system, or one similar enough to make no difference, and can be produced, verified, and transmitted by the CRO according to the same processes on the platform it should be immediately accessible. 100%, real time, immediately accessible is possible and Sponsors whom co-platform with their CRO should expect nothing less. Metadata can have the same meaning and context as the management information of the Sponsor-led activities. Intermediary and final work products of the CRO can be as visible to Sponsor stakeholders as the activities of their own colleagues.

This would be a significant improvement on today. We have not estimated the cost of current transactional approaches to the oversight of outsourced development activity. Nonetheless, it seems reasonable to assume that any level of CRO-side preparation and verification ahead of transfer to the Sponsor, as well as any data transformations required, coupled with a Sponsor-side process to request, review & query, and scaled to the portfolio will add up to a significant cost to Sponsors. That cost is largely unnecessary under a co-platforming model that integrates the CRO data with that of the Sponsor.

The reduction in effort in oversight of CRO providers co-platforming with a Sponsor is additive to the other advantage in visibility and transparency of the cloud-based SaaS paradigm.

Transparency by design and the potential of real time analytics

These systems automatically log everything. Every step of the workflow is rich in accessible metadata. As the use of these systems matures, the volume of the data will grow, and as ubiquity drives process convergence, the amount of data available to companies about their own performance in development operations, and that of others, will explode. It will be possible to really know what good looks like. How Sponsors rank, how suppliers rank and to cut performance data (e.g. turnaround times, query rates) any way that makes sense (e.g. geography, Phase, therapeutic area). Questions previously guessed at become directly answerable – For example, which provider (using technology compatible with ours) has the best record for study start up in NSCLC? How does Sponsor performance in Database Lock compare to others working in the same therapeutic area, and why? These questions become answerable but are only meaningful in the context of an “apples-to-apples” comparison on the same system a Sponsor has adopted.

Conversely, the number of metrics companies will track for day-to-day management of activities will diminish. Under a o-platforming scenario, the clear incentive structure, created by the ease with which a Sponsor could swap out one provider for another, largely automates process management (i.e. we will know what good looks like and everyone will know when it is happening and when it is not). This frees resources up to focus on the performance of the study itself rather than the performance of the outsourced activity.  The number of metrics tracked daily will diminish significantly. There are many inputs to a successful study but a mature system is not concerned with these beyond a particular stable level of performance. The focus of interest instead switches to outcomes.  There are fewer meaningful outcomes than available inputs and the visibility and transparency that cloud-based SaaS enables will allow us to identify the specific subset we need to track at any point of a products journey through development.

Perhaps the most exciting element for Sponsors and CROs alike is that they will begin to engage with each other on, and invest into, true sustainable signifiers of value: quality of effort, risk management, experience, training, footprint and costs. These take time to develop and to invest, CROs and sponsors will be assured this will bring success, as they will be operating transparently within an optimised and visible process flow defined by the industry as a collective.

The cost of development: cheaper than you think

The reduction in CRO oversight costs outlined is a key lever for lowering the cost of development. Significantly reducing, or eliminating, the cost of CRO internal oversight costs that are passed through in fees, and simultaneously reducing the amount of internal Sponsor time spent on CRO oversight will return significant value to the business.

Process convergence also reduces the time and cost associated with process design, management, measurement, tracking, optimisation, and documentation. This frees up even more Sponsor capacity, for redeployment against other levers of R&D productivity.

Co-platforming on technology unlocks a range of cost saving opportunities that unaddressed directly and indirectly drive the high cost of biopharma development.  Some of these are outlined below and taken together will comfortably offset the cost of investment required to access these savings by co-platforming on selected technologies with a CRO development partner.

Potential savings unlocked by co-platforming:

Lower total license costs:

Use enterprise license agreements to provide platform access to CRO resources and avoid the passed through cost of license fees. Where these costs are not passed through directly, are absorbed by the CRO the cost forms part of the fixed cost of the CRO, and is passed through in fees anyway.

Lower cost of switching vendors:

A harmonised process and technology landscape implies a dramatically lower cost of changing providers in the event of a need to switch. We also hypothesise that the level playing pitch created will drive supplier innovation to the benefit of Sponsor organisations.

Lower technology upgrade costs:

On a shared platform partners go through upgrade cycles in lockstep, reducing the friction from even temporary misalignment that would otherwise arise from working on different instances of the same software or on different software.

Lower training costs:

The cost to train and time to access trained resources is minimised because the platform and process landscape is in effect a default environment that increases the number of available resources. A Sponsor company with two providers operating both FSP and FSO models on the same technology and process infrastructure platform will never need to worry about the availability of talent.

Reduced cost of IT support: 

Management of the technology stack will be largely external to both the Sponsor and CRO. Both benefit from the economies of scale of an industry solution in terms of IT support. The benefit accrues disproportionately to the Sponsor though because lower costs for suppliers reduces their cost to serve and the saving can be passed onto the Sponsor.

Lower cost of data transfer:

The requirement for an actual data transfer between Sponsor and CRO in principle will be eliminated over time in favour of a simple switch of ownership on the platform, but even before that point the alignment in technology and process makes any data transfer smoother, more efficient and therefore lower cost.

Lower cost of functional integration:

Some Sponsor CRO partnerships will invest in an end-to-end model encompassing multiple services. Collaboration along the clinical value chain then becomes a modular decision based on capacity management and expertise. The development value chain will cross the boundary of the Sponsor firm multiple times during a development program with minimal friction and no loss of oversight providing much more flexibility to biopharma in managing the development portfolio.

Lower cost of reporting and compliance:

The development of standardised approaches and a library of templates for various internal and external reporting needs or scenarios easily shared and used by CROs and Sponsors reduces the cost of compliance.

Sponsor companies can shape this future now

The future of drug development outlined in this article clearly relies on ongoing technical development of the current crop of cloud-based SaaS solutions, but at any reasonable assumption of improvement over time the technologies currently being rolled out will blur the boundaries between firms partnering for drug development.

Drive the return to supplier innovation

This will refocus the conversation between development partners on value delivery. In recent years, we have seen consolidation in the CRO market driven, in part, by the pressure on CRO margins from Sponsors looking for cost reductions. The response of CROs to squeezed margins has been to build scale. This has been a challenging environment for CROs and Sponsors have meaningful discussions about innovation and value.

Technologies like Veeva, whose stated intent is to become the platform for drug development, offer a way out of this conundrum. By setting the boundary conditions and providing a default infrastructure within which to conduct pharma development, the CRO can focus on delivery excellence and service innovation in partnership with their clients.

Engage with your suppliers

We recommend that, instead of asking vendors of development services for pharma to outline their experience with the platform of choice as part of vendor selection for FSP or FSO selection, that biopharma Sponsor organisations engage proactively with their development partners.  The goal should be to build a mutually accessible platform for development services based on common approaches to process, oversight reporting and data transfer.

Syneos Health Consulting Can Help

Syneos Health Consulting can help biopharma development organisations and their R&D IT partners work through their strategy to co-platform on cloud-based, SaaS solutions. We will work with biopharma, their selected CRO partners and technology providers to define the scale, scope and pace of change. Whether the co-platform approach is localised to a single application or across a full suite of applications and associated services and capabilities, we can explore objectives and structure an approach and an implementation plan to deliver them.