Biopharma companies are under pressure as never before – faced with rising levels of risk and uncertainty; the necessity to maximize patient outcomes and demonstrate value, while navigating an increasingly complex reimbursement environment; and the always-on pressure to accelerate development while reducing costs.
In response to these dynamics, companies are being forced to re-examine long-standing models for clinical development and commercialization, to break down functional and data silos, and chart new paths for insight generation and customer engagement. I spoke about this need for “radical reorganization” at the recent 17th Annual eyeforpharma Barcelona conference (March 12-13, 2019).
In the past – even the recent past -- simple restructuring might have been all that was called for. But not today. Instead, companies are confronting the need to radically retool their organizations to work in more cost-effective and agile ways.
On one level, the need for radical reorg is being driven by a basic economic need to flex the cost structure. Traditionally, the only financial levers companies had were cutting staff or limiting research and development. In today’s climate, however, life science leaders need greater flexibility. To gain this while protecting their pipelines, they are increasingly looking to replace costly infrastructure with more adaptable partners.
“Partner” is the key word here. Because traditionally, the outsourcing relationship between sponsors and CROs or CCOs has been more transactional with “buyer” and “supplier” remaining at arms-length. However, this type of relationship is not conducive to collaboration, innovation or creating shared value.
To rise to the challenges of the current moment, it is critical that we move beyond a buyer/supplier relationship toward a much more collaborative partnership model – a model in which values are shared and goals are aligned, and both parties focus together on business challenges and the desired outcomes, not simply the buyer/supplier transaction at hand.
This model can also help drive more integration, helping align strategy and metrics across all aspects of the commercial team, from uptake and penetration to stronger adherence – in short, it can facilitate both partners taking a more holistic view of challenges and opportunities.
According to the 2019 Health Trend Ten Report, compiled by Syneos Health based on research and interviews with more than 200 leaders on the front lines of healthcare, the year ahead will see a significant shift to horizontal contracting, with critical parts of the commercial organization no longer being owned but rather outsourced to a commercialization partner.
According to a recent survey, life sciences leaders are increasingly looking to outsourcing to fuel commercial growth. Of those surveyed:
- 60% of respondents said “greater flexibility of commercial scale” is the number one benefit to commercial outsourcing.
- 49% said that the ability to tap into proven external technological solutions is a key driver for their organizations.
- 40% indicated that they use outsourcing to fill skill gaps within their own organizations.
Even so, our view is that outsourcing solutions are only as powerful as the degree to which both parties are focused on outcomes, not just the business transaction, and equally vested in realizing value from the relationship. That said, “value” must also translate for both parties into a focus on patient benefit and on generating the evidence needed to support it.
