Sponsor/CRO Partnership Optimization

Transcription

1 Insight Brief Sponsor/CRO Partnership Optimization Developing a CRO Governance Model Geoff Garabedian, Vice President and Managing Director, Consulting at Quintiles Josh Samon, Principal Life Sciences Consultant, Consulting at Quintiles Asha Collins, Ph.D., Principal Life Sciences Consultant, Consulting at Quintiles Outsourcing continues to increase in popularity within the biopharma sector, as a way to contain operational and infrastructure costs, as well as gain access to therapeutic and clinical trial expertise. Interactions between sponsors and CROs can at times be inefficient due to the large degree of shared responsibility. Successful interactions between sponsors and CROs require skills in communication and relationship management to create a shared vision of partnering and trust. This type of mindset may be lacking in sponsor/cro relationships, which can limit the potential to complete projects better, faster and more efficiently. The challenge increases significantly when a sponsor works with several CROs. Against this overall backdrop, many biopharma firms seek to achieve strategic and transformational change, however many such initiatives currently achieve only small, incremental, tactical improvements. This paper examines the impact of centralized governance and optimized operating models on helping to realize the full potential of outsourcing arrangements. Companies that have tackled this have seen real-world results that include increases in resource productivity of as much as 40%, potential savings of millions of dollars per year, and major reductions in cycle times.

2 Table of Contents Relationship continuum: Tactical to strategic 03 Streamlining the sponsor/cro interface 04 Goals and metrics drive effective CRO governance 04 Governance strategy and operating model 04 Efficiencies in project management 05 Prioritizing opportunities 05 A dual approach: Centralized governance and a sustainable process framework 05 Metrics: quantifying and measuring performance 06 Conclusion 07 2

3 Relationship continuum: Tactical to strategic Sponsors and their CRO partners can best determine the type of relationship they want to establish for both near-term and longer-term objectives. In theory, outsourcing relationships often evolve along a continuum from transactional, tactical, fee-for-service arrangements where price dominates, to strategic partnerships where both profits and risks are shared, and core competence is the dominant factor (Figure 1). Typically, the benefits and closeness of the partnership are lowest for transactional relationships and highest for strategic partnerships, thus, companies restricting themselves to less strategic options will encounter major barriers to maximizing potential benefits. Figure 1: Evolution of outsourcing partnerships Outsourcing within pharma is increasing and relationships are becoming more strategic Companies that restrict themselves to the lower level options prevent themselves from attaining the greatest valuable benefits Partnering Alliances Sharing both profits and risk Integration Benefits Fee for Service Transactional Preferred Reduced price fee for service Risk sharing and shared milestones Evolution Attributes Price Dominates Assured Standards Business Objectives Performance Improvement Core Competence Features Tenders Tactical Negotiation Pre-conditions Pre-qualifications Joint Ventures Mutual Development Mergers and Acquisitions Increasing closeness of relationship In reality, sponsor/cro relationships are generally a mix of both tactical and strategic elements, depending on the internal and external needs of the partners. Tactical activities include execution of contract terms, delivery of ad hoc solutions, study-level cost and performance assessments and decisions based on cost and real-time availability. Strategic activities encompass shared decisionmaking, delivery of broad cross-study solutions, performance assessments, shared risk and reward structures, and decisions based on longer-term objectives. Many sponsor/cro interactions involve inefficiencies caused by unnecessary duplication or task sharing. In this case, the sponsor remains focused on managing studies and there is task and role ambiguity, leading to confusion, frustration and inefficiencies through redundancy. A better situation would be a more streamlined partnership, with joint responsibilities and interactions reserved for a small number of critical tasks. Here, the sponsor concentrates on managing its partners; there is task and role clarity which fosters trust and innovation and enhanced efficiencies and deliverables. 3

4 Streamlining the sponsor/cro interface A two-pronged approach involving centralized governance and enhanced process design can be used to streamline the sponsor/cro interface, enabling biopharma companies to capture more value from their changing relationship, and helping to ensure greater sustainability. Centralized governance requires: > > Defining a shared vision, mission and goals for the partnership > > Collaboratively developing a common understanding of the partnership s strategic direction > > Creating a governance model that properly operationalizes change. In parallel, process design can be enhanced by: > > Identifying the lags and bottlenecks > > Aligning the sponsor and its CRO partners on the best solutions > > Creating efficiencies by clarifying the responsibilities of the sponsor and that of the CRO partners. Goals and metrics drive effective CRO governance Effective CRO governance is driven, in part, by goals and metrics that assess alignment and performance against the shared vision of the partners. This includes a centralized structure for communication, collaboration and escalation, and enables the sponsor and CRO to operate as an integrated team with common goals and aligned structures and processes. Focusing on maximizing success and returns for both parties fuels value throughout the life of the partnership. Governance strategy and operating model Shared values and objectives and a high level of trust between partners are critical success factors. Once a vision has been established, additional aspects of the partnership and operating strategy can be defined so that they build trust through a combination of integrated goals, structure, resources, processes, technology and metrics. A successful strategic outsourcing program requires willingness by both sponsor and CRO to question long-held ideas about the right way to do things, and meet on neutral ground to develop approaches that are demonstrably better for all parties. An example of a sponsor/cro oversight structure is shown in Figure 2. Figure 2: Sponsor/CRO oversight structure Formalized Team Structures and Roles Provide a Foundation for Optimization A more formalized CRO partner oversight structure and dedicated Sponsor business units within each partner help to reinforce behaviors and help to ensure success. SPONSOR / CRO Oversight Structure Cross-Partner Working Group Includes representation from Sponsor and all CRO Partners Facilitates crosspartner alignment and communication Endorses cross-partner process changes Sponsor / CRO Partnership Executive Committee Sponsor / CRO Partnership Oversight Committee Dedicated Resources, i.e. Business Unit, to Support Sponsor Provides executive endorsement of and direction for the partnership operational strategy Defines the Sponsor / CRO partnership strategy Manages day-to-day risks and mitigation strategies Partner staff solely focused on Sponsor needs Sponsor identifies which resources to retain in model 4

5 A successful strategic outsourcing program requires willingness by both sponsor and CRO to question long-held ideas about the right way to do things. Effective issue escalation pathways share common features that enable issues to be addressed in a clear and timely manner. Clear definitions, documentation, agreed timelines and broad communications are all required. Efficiencies in project management In project management, there are four major areas of emphasis required to drive efficiencies between the sponsor and CRO: 1. Role clarity: There is often duplication of effort and inconsistent delegation of tasks and responsibilities. Documenting how tasks are delineated between the partners will help clarify and standardize roles and responsibilities. 2. Proposal optimization: When sponsors fully define the study scope, they leave little ability for CROs to make positive contributions to strategy. Instead, CROs should be allowed to develop a detailed study execution strategy. This leverages the collective experience of all partners to help optimize study costs and timescales. 3. Meeting efficiency: Excessive numbers of internal meetings to report similar information can suboptimize the study initiation process. Optimizing meeting timing and management using a revised approach for kick-off and strategy sessions can enable more efficient study start up and proactive risk management. 4. Study planning and reporting: Study status reports, study templates, and reporting frequency across sponsor studies may vary widely. Introducing standard study status reporting tools and study management plans can establish common expectations and reduce ad hoc requests for information. Prioritizing opportunities The specific opportunities for optimizing a particular sponsor/cro partnership can be determined from quantitative and qualitative analysis of the organization s performance and pain points, including interviews, performance analysis and best practices benchmarking. An opportunity prioritization framework is developed, allowing identification of projects that may yield quick wins, along with those with mid- and long-term value. A dual approach: Centralized governance and a sustainable process framework Taking a dual approach to improving sponsor/cro partnerships involving both centralized governance and enhanced process design delivers a solution that is more than the sum of its parts as shown in Figure 3. Benefits from centralized governance can include creating a common vision, mission and goals for the partnership, streamlining communication to increase crossorganizational transparency and information sharing, and jointly developing a strategic roadmap for the future. Enhanced process design offers benefits such as clarified roles and responsibilities, and standardized processes with a set of common expectations. Focusing on process also helps ensure sustainability and enables a learning organization. 5

6 This dual approach produces synergistic effects such as: > > Ability to realize full potential of outsourcing relationships > > Introduction of innovative approaches into the working relationship > > Increased trust and collaboration > > Joint investment to support performance improvement > > Ability to more easily share risk > > Commitment to longer-term relationships. Figure 3: Dual Approach to Governance and Process Design Centralized Governance Syngeneristic Effects Enhanced Process Design Key Benefits Creation of a common vision, mission and goals of the partnership Streamlined partner communication Increased crossorganizational transparency and information sharing Joint development of a strategic roadmap for the future Ability to realize full potential of outsourcing relationships Introduction of innovative approaches into the working relationship Increased trust and collaboration Joint investment to support performance improvement Ability to more easily share risk Commitment to longerterm relationships Key Benefits Clarified roles and responsibilities Standardization processes with set of common expectations Elimination of resource duplication provides cost / cycle time improvements Focuses the sponsor on strategic, risk-based study oversight and allows the CRO to be accountable for execution Metrics: quantifying and measuring performance CRO governance is driven by goals and metrics, which helps ensure shared organizational direction. Several problems tend to plague failing partnerships. First, lack of direction when there is no shared vision, and all players do what they believe to be best. Second, competing goals resulting from differences of opinion on vision and strategy. Third, disconnected leadership, when key executives have a vision and strategy that they have failed to communicate to the rest of the partnership. Finally, the wrong goal when the partnership is united in a direction that does not create value for stakeholders. When these issues have been addressed, the result is fundamental alignment of the players, vision and strategy that are communicated throughout the partnership, and clarity of roles and responsibilities with everyone properly motivated to perform. One example of an area where goals and metrics can drive optimum performance is metric-driven clinical trial management. Here, appropriate metrics are identified and the source data is collected and reported for each metric. It is important to include both leading and lagging indicators to enable risk prediction. Metrics should be considered for human and other resources, finances, program planning and execution, quality, satisfaction, and interfaces between functional groups and partners. Sample deliverables could include: > > Key Performance Indicator (KPI) framework, with structure and definitions of major KPI categories (e.g., value, resources, cycle-time) for the portfolio and a well-balanced set of top level KPIs in alignment with key success factors 6

7 > > Indicator definitions across all KPI categories that contribute to attainment of the top level KPIs, including detailed calculation approach, data source, measurement frequency, and baseline determination > > Indicator benchmarking, with values based on industry standard reports, literature searches, sponsor and CRO data, and expert interviews > > Management reports, presenting a consolidated view of the recommended top-level KPIs > > Report generation process including roles and responsibilities, frequency of report updates and management review sessions with executive management, plus a high-level implementation plan to support initial deployment. Conclusion Optimizing the partnership between sponsors and CROs is essential for all partners to maximize benefit from the relationship. Inefficiencies often inherent in sponsor/cro interactions can be minimized using a centralized governance model, enhanced process design, and tracking key metrics and the use of appropriate reporting tools. These practices allow the sponsor and CRO to operate as a united team with shared goals and aligned structures and processes. This approach has been proven to achieve the transformational changes that many biopharma companies are currently targeting, resulting in value for all partners for the entire duration of the relationship. Real world results have included increases in resource productivity of as much as 40%, potential savings of tens of millions of dollars per year, and major reductions in cycle times. Optimizing the partnership between sponsors and CROs allows them to operate as a united team with shared goals and aligned structures and processes. 7

8 About the Authors Geoff Garabedian Vice President and Managing Director, Consulting at Quintiles Geoff Garabedian is Vice President and Managing Director at Quintiles. He leads the Regulatory and Quality practice within the U.S., as well as the horizontal solution areas within Consulting (Process Optimization, IT Strategy & Implementation, Change Management and Program Management). Before joining Quintiles in 2008, he was a Partner within the Life Sciences industry group at BusinessEdge Solutions. He also spent 11 years at Accenture. Educated at Stevens Institute of Technology, Geoff holds a BE and BA in Mechanical Engineering and English and American Literature. Josh Samon Principal Life Sciences Consultant, Consulting at Quintiles Joshua Samon, Principal Consultant at Quintiles, leads delivery of business strategy, process and operations engagements with biopharma and medical device clients. Before joining Quintiles in 2008, Josh held positions with the Corporate Executive Board and Ethicon (Johnson & Johnson). He has a BS in chemical engineering from Purdue University, a Ph.D. in chemical engineering from the University of Delaware and an MBA from the Stern School of Business at NYU. Asha Collins, Ph.D. Principal Life Sciences Consultant, Consulting at Quintiles Asha S. Collins, Ph.D., is a Principal Consultant at Quintiles, with a focus on strategy and clinical development operations for biopharmaceutical companies. Before joining Quintiles in 2011, Asha worked in life science strategy and operations at Deloitte Consulting, and has also held positions at the National Institutes of Health s National Cancer Institute. Asha has a Ph.D. in Microbiology/ Cancer Biology from the University of Wisconsin-Madison, and a BS in Biological Sciences from the University of Pittsburgh. Contact Us: On the web: consulting@quintiles.com Copyright 2013 Quintiles