The last few years have seen tremendous consolidation in both the pharmaceutical and contract research industries
The last few years have seen tremendous consolidation in both the pharmaceutical and contract research industries. The impact among pharma companies has created a heightened demand for productivity. Consequently, contract research organizations have struggled to find their footing in a business where the number of customers has shrunk and the demand for speed and cost-effectiveness has risen. Delivering service excellence when customers’ names and addresses are changing regularly is a challenge, resulting in disrupted continuity, broken lines of communication, and policies and relationships thrown into disarray.
Under those circumstances, CROs can play a crucial role as providers of innovative drug discovery and development solutions. This article presents the three challenges facing CROs-improving productivity, applying ingenuity, and delivering service excellence-and suggests ways they can more effectively serve the rapidly increasing needs of the drug discovery and development industry. Despite that, CROs have often failed to establish themselves as trustworthy and reliable partners with their customers. At the highest levels, those relationships remain tenuous. Cost regularly drives purchasing, and the overwhelming trend has been for pharma companies to assign CROs single projects rather than integrated programs that include multiple components of a compound’s development cycle.
Short-term relationships are inherently transactional. In that capacity, CROs are merely vendors, and their customers cannot take advantage of the knowledge and experience those organizations have to offer. To the CRO, the benefit of a long-standing partnership is obvious: enhanced stability in an industry fraught with upheavals.
The benefits to the pharma industry are just as appealing. Such relationships, particularly in the context of disorder created by recent mergers, have the potential to shorten drug development timelines, improve compound quality, and increase cost-effectiveness-seductive promises in an age of unprecedented competition to find blockbuster drugs.
According to R&D Directions Pipeline 2000, to maintain their current growth in future years, pharma companies will have to quadruple productivity. That growth potential exists. A recent article in Scrip notes that the number of fundamentally different biological molecules discovered in the next century is expected to increase tenfold-but pharma companies will need help to exploit that potential.
The irony of the current merger trend is that, after consolidation, productivity expectations increase, but productivity itself may not. In fact, in the inevitable disruption that follows, pharma companies often see a downturn in output. Although consolidation often reduces costs, pharma companies still face the need to grow pipelines at an extraordinary rate to fulfill revenue demands.
Pharma industry behavior, such as the co-evolution trend, testifies to the demand for new solutions. Large companies such as GlaxoSmithKline have found that spinning off smaller therapeutic-category-based groups may increase productivity. Such groups are organized like biotech companies and focus on a narrow aspect of drug development. In many cases, those groups operate without the infrastructure of a large pharma company, using outside resources such as CROs instead. Big Pharma itself has realized what smaller companies already know: massive scale is not, in and of itself, the secret to accelerated drug development.
With such an emphasis on productivity, companies are pressed to perform research tasks more reliably, with greater accuracy, and at a higher speed. In many cases, that means turning to an outside resource. But only the CROs that master the following keys to success will transform those opportunities into meaningful partnerships.
Improve Productivity among the many ways CROs can help increase productivity, the greatest potential lies in the application of their scientific expertise. Pharma companies possess indisputable expertise in a variety of areas, but they cannot span the entire spectrum of drug discovery and development. A CRO’s scientific acumen can offer a unique perspective as a consultant focused on providing specific solutions. This is most important at the earliest levels of research.
Although the complexities of risk sharing are considerable, its value has been established. Customers benefit from minimized risk and the ability to focus on their core competencies, knowing that a partner-with an added financial incentive-is making sure their drug development processes move forward with exceptional efficiency. Such agreements may be the best strategies pharma companies can use to overcome today’s challenges.
Deliver Service Excellence Simply performing a task more effectively is not enough. CROs must prove their value and deliver outstanding service. Many CROs struggle to move beyond “a la carte” selection of their services to establish long-term relationships based on providing their customers with solutions. Their level of commitment to service cannot help but play a part in the transition. Yet many CROs are not as customer-focused as they should be.
When evaluating a CRO, one factor has immense impact: the organization’s ability to perceive its customers individually, beyond identifiers such as big pharma, generic, and biotech. Even the most elaborate processes and fail-safe measures are useless if the company or the CRO is unresponsive to change and unable to facilitate unique needs. Without a customized approach, strong customer relationships are impossible.
Customer service affects every aspect of the CRO’s business. It may be expressed by customizing the format of a data report or through solving problems before the customer is aware they exist. At the end of the day, CROs don’t sell data or technology-they sell knowledge. Customers count on CROs to generate information, then assemble, analyze, and return it to them in an easily understood format-quickly and consistently. Every process, every person should work smoothly toward that end, even if individual staff members never meet customers face to face.
