Josef von Rickenbach
The CRO (Clinical Research Organisation) market emerged a quarter of a century ago, when increasing regulations and drug pricing competition, among other factors, meant that biopharmaceutical companies needed to find more efficient, cost-effective options to manage their clinical development programmes while bringing important new products to market. As one of the first companies to formally define the biopharmaceutical contract services sector, PAREXEL, among other early providers, was poised to take advantage of a promising future.
The majority of companies in the emerging contract services industry were initially based in the USA; however, it did not take long for the landscape to expand and for niche players to become more prevalent, also throughout Europe and Asia. It quickly became apparent that the service providers that could deliver comprehensive global capabilities, therapeutic expertise, and diversified offerings would be able to meet growing client demand.
The benefits of outsourcing
The continued growth of outsourcing has been fuelled by many factors, including cost pressures in the pharmaceutical industry related to a decline in R&D productivity, and the emergence of the biotechnology industry, which required a full range of regulatory, clinical development, and commercialisation capabilities. Biopharmaceutical companies have increasingly recognised the ability of contract service providers not only to provide expanded capacity but also efficiencies, cost containment, and quality. In fact, the Tufts Center for the Study of Drug Development January/February 2006 Impact report states that companies that use contract service providers complete projects faster, while maintaining comparable quality.
Among the benefits of outsourcing to contract service providers is breadth and depth of expertise, including across therapeutic areas. According to Frost & Sullivan, more than 20% of cardiovascular and oncology clinical development is being outsourced today. Study sponsors are relying more heavily on the expertise of contract service providers as the clinical studies to support vital compounds are becoming more complex.
Expanding service portfolios
As many biopharmaceutical companies focus more of their core efforts on discovery, the contract services industry is providing an increasingly robust portfolio of offerings, beyond core clinical development, including regulatory affairs and medical communications expertise, for instance. Contract services providers have also brought technology innovation to biopharmaceutical companies. Software and web-based systems, such as medical imaging, clinical trial management systems, and interactive voice response systems, as well as technologies to support patient recruitment, have been adopted to facilitate the management of clinical studies. As more companies incorporate eClinical solutions into their programmes, the industry has the potential to realise even greater improvements in process efficiencies, data integrity, predictability and visibility across clinical trials.
Global reach
The ability for contract services providers to offer extensive global capabilities is increasingly critical. As clinical trials have continued to expand in number and complexity, more patients are being required. At the same time, biopharmaceutical companies are seeking to develop and commercialise products for more regional and international markets, further driving the need to conduct clinical trials throughout the world. As a result, companies are tapping contract services providers that provide global standards and local expertise across a wide array of geographies. According to PAREXEL’s Bio/Pharmaceutical R&D Statistical Sourcebook 2007/2008, 41% of the clinical sites that conducted FDA-regulated clinical trials in 2006 were non-US trial sites across 92 countries.
New technologies & methodologies
The biopharmaceutical industry will continue to rely on the core service provider business model to test compounds for safety and efficacy, bringing even greater efficiencies and expertise to bear. A number of factors are driving the industry’s direction, including personalised medicine and adaptive clinical trials, which are paving the way for providers to offer enhanced and more specialised services. An example of such specialisation is the response to advances in the manufacturing and transport of biotech products. The services sector has devised a radio-frequency identification (RFID) for drug manufacturers and distributors to more precisely track drug products through the supply chain. This example represents the potential and opportunity in the services industry for new innovations to meet evolving client needs.
The future of the contract services sector
The contract services sector will become increasingly competitive, driving new ideas and innovation, which will lead to greater benefits for the biopharmaceutical industry. The role of the service provider will continue to be critical in assisting with the development of safe and effective treatments for patients worldwide. More and more, biopharmaceutical companies will look to service providers as strategic partners to provide extensive levels of expertise, broader and deeper offerings, and local and global capabilities.
Josef von Rickenbach is a Founder, Chairman, and Chief Executive Officer of PAREXEL International Corporation, a leading global bio/pharmaceutical services provider. Since its inception 25 years ago, PAREXEL has grown to provide a broad range of expertise-based product development and marketing outsourcing services as well as contract research services to the international pharmaceutical, biotechnology, and medical device industries. Mr von Rickenbach served as Chair of the Association of Clinical Research Organizations (ACRO) in 2005, and is a long-standing member of the ACRO Board of Directors. He holds a Bachelor of Business Administration from the Lucerne College of Industry Economics and Administration in Switzerland and a Master of Business Administration from Harvard University.
