Pharmaceutical Industry

Defining a makeorbuy and sourcing strategy for all clinical development processes
Case study
10/20/2014

Context and challenges

In the face of sluggish R&D performance and everincreasing costs, a leading pharmaceutical group wished to refocus its teams on a more addedvalue approach of managing development projects.
To achieve this goal, it planned to seek more effective support from Contract Research Organizations (CROs) to allow it to better manage a larger project portfolio, with constant resources.

The group wanted to completely revise its outsourcing strategy, favoring the use of CROs as opposed to independent contractors. It also hoped to freeup one of its buildings, which until then had been used exclusively by these contractors, and to start using it for operational development activities.

Approach and methodology

The project was sequenced in five stages:

  • The clinical development process was broken down into elementary tasks.
    For each task, the following were assessed: skills required, workload, current and future costs, strategic importance of the task, and the competitive performance of the group for this activity (compared to CROs). Based on this analysis, a taskspecific makeorbuy decision was made
  • Our team created an internal roadmap of CRO use: expenditure for each activity, trends, examination of performance and existing contracts, and current group sourcing practices
  • CRO market research was carried out simultaneously, and a group sourcing strategy was developed based on the estimated requirements of the group for the coming years
  • More specifically, in the building for reallocation, a detailed situational analysis was performed on ongoing activities, along with a review of service providers’ contracts. A gradual cessation plan was defined and quantified in terms of financial issues
  • Consolidating these different analyses made it possible to define the target strategy and transformation plan required to implement it, and to anticipate any related financial issues

Results

This project was supported by the appointment of a CROProvider Relations Manager, who coordinated the implementation of the new sourcing strategy. The reallocation of the building formerly used by independent contractors went smoothly and to plan.

Ultimately, this initiative generated procurement savings in excess of 15% in the area concerned and estimated productivity gains of approximately 25%.