The CRO landscape continues to shift and grow, continually increasing global clinical development market share with a wide spectrum of outsourcing services and models available to biopharmaceutical companies. The way we source has rapidly outpaced the terms we use to describe and define it, creating a need for a new industry-wide framework to better understand and engage these models. ICON, with Tufts CSDD and a consortium of pharmaceutical partners, have researched and proposed a new framework which we can use to benchmark the efficacy of certain models.

The CRO landscape has changed significantly in the last few years, with considerable shifts in market share as CROs mature and major evolution in the way we work. According to the Tufts Center for the Study of Drug Development (CSDD) Impact Report for November/December 2022, the CRO market continues to grow with nearly $50b of total spend in the drug development industry allocated to contract clinical services. Nearly 60% of global spending in clinical development is for outsourced services, and that percentage is growing faster than that of the non-outsourced areas of clinical development spending.

Demand for CRO services has steadily grown and it’s expected to continue. This demand is attributed to the increase in smaller biopharmaceutical companies and virtual biotechnology companies with limited internal capacity, the leaner sponsor operating models and the continuous strategic shifts that larger biopharmaceuticals make to maximise their ROI through the balance of in-house competencies and outsourced expertise. As sourcing models have become more complex to fit the market demands and capabilities, the original dichotomy of Full-Service Outsourcing (FSO) and Functional Service Provider (FSP) models has become rife with ambiguity. To paint a fuller picture of the current CRO and sourcing landscape, we need more accurate terminology suitable to the new ways we contract this work.

Outpacing old definitions and outlining new ones

The way we work has rapidly outpaced the terms we use to describe and define it.

As sponsor company operating models have continued to evolve and adapt, the terminology and definitions we use to discuss these sourcing strategies have remained unchanged for nearly twenty years. The original definitions of FSO and FSP have not been adapted and terms like “full service” are commonly used as a generic catch-all, stretched to cover a growing industry and adding to the confusion and uncertainty. Sponsor companies have attempted to differentiate their outsourcing practices, but the increasing complexity in clinical projects and within the often large and fragmented companies themselves has prevented a standardised terminology.

The underlying differentiators across the various iterations of the FSO and FSP services is really the level of employment of the CRO’s infrastructure, processes and standard operating procedures (SOPs). Depending on the size, configuration, portfolio and in-house capacities of sponsor companies, different models or combinations of models may be utilised. Based on this reality, we have proposed a new framework to provide clarity in characterising sourcing models that accounts for the variety in responsibilities and accountability across sourcing models.

This new framework better categorizes the full spectrum of CRO services supporting clinical trials and - as featured in the Tufts CSDD Impact Report — enables more meaningful analysis and comparison of outsourcing approaches and their impact on drug development performance.

Building benchmarks

Industry-agreed terminology and sourcing frameworks are key to developing benchmarks for the effectiveness of sourcing models, either as singular models or a combination. ICON collaborated with Tufts to research and develop this new framework, and we leveraged our relationships with 18 of our biopharmaceutical company Partners of Choice to garner real-world input and capture the breadth of sourcing models used by some of the top companies. From this framework, we can create consistency in terminology across the industry which we can utilise to better evaluate the value propositions of each model across the lifecycle of a development project.

To further this research and benchmark the various permutations of sourcing models across the industry, we are engaging with Tufts CSDD and our network of biopharmaceutical Partners of Choice to conduct primary research comparing clinical trial performance outcomes. Benchmarking these sourcing models and strategies within a well-defined framework of terminology will clarify sourcing expectations and facilitate improved decision-making for selecting the most effective model for each development project.

Concluding comments

The diversity of sourcing models and increasing demand for CRO services necessitates updated, accurate terminology to guide decision-making and establish improved expectations based on model definitions. ICON, along with Tufts CSDD and a consortium of our Partners of Choice, have collaborated on a new framework to differentiate these sourcing models and enable a more granular analysis of each. As CROs grow in size and market share, and as clinical development spend continues to rise, CROs are also keen to improve their productivity. Redefining how we work with industry-accepted terminology and utilising a framework for understanding sourcing methods will avoid confusion, ensure common understanding between partners and across the industry regarding responsibilities and accountabilities and enrich our insight into clinical trial performance.

Read more about our framework for characterising sourcing models in our Redefining CRO sourcing model terminology to optimise outsourcing strategies article or the Tufts CSDD Impact Report November/December 2022 issue.

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