Industry Perspective

Q&A with Mario Papillon, VP, Strategic Account Leader

What is fueling the growth in strategic partnerships between biopharmaceutical companies and service providers?

Faced with continuing financial and competitive pressures, many biopharmaceutical companies are exploring new types of strategic partnerships designed to deliver greater benefits throughout the product development lifecycle.  This next partnership stage involves longer-term and more-complex relationships with a small number of service partners, focusing on project oversight cost reductions and time savings – the areas of product development where the most valuable improvements can be achieved.

Under such a strategic development partnership, a service provider delivers a broad array of services, or focuses on a particular therapeutic area, development function, or geography.  This strategic partnership model helps biopharmaceutical companies greatly increase operational efficiency by focusing their internal resources on priorities such as discovery research and product marketing, while relying on their partners for a comprehensive breadth of specialized knowledge and infrastructure, such as in-depth therapeutic-area expertise, clinical trial experience, global patient and investigator resources, and regulatory knowledge.  The mix of internal and external resources is even more efficient in the longer term because the commitment between the partners allows the savings to increase and accrue over time.  This commitment also allows for investments in data integration, standardized protocols, study start-up procedures, document templates, and other efficiencies that can dramatically reduce clinical study times – an area where even modest improvements can save millions of dollars.

What qualities should biopharmaceutical companies look for in their strategic partners?

As biopharmaceutical companies have evolved toward broader strategic partnerships, CROs have also evolved to meet the industry’s growing demand for expert resources and global reach.  CROs have expanded their service offerings to bring more innovation to study design and execution, and increased their depth of therapeutic expertise and technology resources – improvements that will help their strategic partners reduce development costs and accelerate time to market.  Larger, more-complex global development programs also require service providers that have greater size and global scope to provide the services their partners need.

Strategic partnerships are significantly altering the nature of the relationship between biopharmaceutical companies and service companies.  The industry’s selection criteria for service partners increasingly focuses on the level of a partner’s expertise and experience, rather than on specific technologies or services.  The partner is expected to have the ability to marshal – and manage – all of the resources that are necessary to accomplish a sponsor’s project: therapeutic area expertise; worldwide investigator and site resources; advanced technologies; global regulatory knowledge; marketing expertise; data analysis; and risk management. Experience as a strategic partner is also important, because a biopharmaceutical company can gain important benefits from a partner’s previous partnership experience. 

What are the key success factors for strategic partnerships?

The benefits of strategic partnerships can only be achieved if the partners forge a mutually advantageous relationship that drives the savings – a relationship that must be based on trust, commitment, and communication.  There are several proven success factors that should be incorporated into any strategic partnership to maximize the benefits:

• Governance – A robust governance structure supports efficient decision-making, builds trust, and reinforces the desired pathways to make sure that the partnership’s goals are achieved as planned.  Using three tiers of governance – executive level, operational level, and team level – provides a clear path for the efficient escalation and resolution of issues.  
• Communication – Open communication and information transparency are essential to build and maintain trust in a strategic partnership.  This begins with a well-defined scope of work, with actions tied to specific benefits.  Strong communication links are supported by a regular flow of information between peers at every level: within the project; between similar job functions at the sponsor and service provider; between therapeutic area experts; and between teams on a country-to-country basis.  
• Metrics – A precise set of meaningful metrics is the best way to drive performance and produce the desired benefits of a partnership.  These metrics should include shared measurements for the sponsor and the service provider, including:
  • Operational metrics, such as timeliness, productivity, and quality measurements
  •  Innovation metrics, such as process improvements and technology integration
  • Partnership metrics, such as new business gained and profitability across the portfolio
• Technology and infrastructure integration – Efficient data exchange is critical for a strategic partnership.  At its most basic level, integration begins with the sharing of metrics data and the re-programming of firewalls and other technologies to remove data exchange barriers.  Strategic partners would also be expected to establish links between key data systems, as well as purchase technologies that work in harmony.  Over time, a convergence of technologies would be expected, with both partners using the same systems that are closely linked to facilitate data sharing and joint decision making.
• Process Management – Effective partnerships implement standardized “best practices” and procedures that uniformly guide every activity and connect the partners at critical junctures to maximize the efficiency of the relationship.  Harmonized processes allow the sponsor and the service provider to better understand the “rules of the road” and eliminate the need to reinvent standards for every project.  At the same time, each party must remain flexible and allow the partnership to develop and evolve to accommodate unanticipated changes.
• Shared accountability – The biopharmaceutical company and the service provider must be committed to sharing accountability for both benefits and risks if a strategic partnership is to achieve its full potential.  Those benefits and risks must be clearly understood at the beginning of the relationship, with the partners developing a comprehensive benefits proposition that covers costs, revenue, risks, and timing.