From The Corner Lab - Blog Posts

New Study Provides Insight Into What's Needed For Success When Using CROs

Posted by Jim Menoutis on Sat, Jul 21, 2012 @ 07:53 PM

As more and more R&D and analytical testing is outsourced by pharmaceutical companies, a study released by the global consulting firm Booz & Company provides new insight into how to structure the relevant relationships for success.

This study finds that global pharmaceutical outsourcing is expected to reach $28 billion this year and climb to $35.5 billion by 2015, an increase of more than 10% since 2009.

The Booz study reveals that developing the capabilities to partner with Contract Research Organizations (CROs) is a critical key to success for pharmaceutical companies in today's increasingly complex and competitive environment.  The study research clearly showed that most companies are not structuring their CRO relationships to take advantage of the value chain. Noting that, “this is wasting time and money they (pharmaceutical companies) can ill afford to lose."

The report provides insight into the ways pharmaceutical companies can better engage with CROs  to make these relationships as productive as possible.

Key findings include:

  • Managing relationships with CROs is an increasingly important capability in the pharmaceutical sector.
  • Pharmaceutical companies currently have a broad rationale for outsourcing to CROs  and are still experimenting with different CRO relationship models. Four types of relationship models are emerging: Qualified Talent Supplier, Preferred Capacity Partner, Preferred Capability Partner, and Strategic Partner.
  • To derive sustainable value from these relationships, pharmaceutical companies must align the design, structure, and performance measures of their relationships with their rationale.
  • Pharmaceutical  companies that adopt a nimble, capability-centered approach to relationships, characterized by alignment and clarity with the CRO based on capabilities, will be more focused, make better use of their distinct capabilities, and generate more value.

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Topics: Outsourcing, Successful CRO Relationships, Success When Outsourcing to CROs