Optimizing operating and sourcing models is a critical strategic decision for pharmaceutical and biotech companies. The ideal model depends on factors like company size, core competencies, and strategic goals. Companies frequently adjust their approach to gain a competitive edge or adapt to changing industry landscapes.
Some Key Considerations for Sourcing Models
Companies must assess several factors when choosing an operating and sourcing model:
- Strategic Alignment: The chosen model should align with the company’s overall strategy, expertise, and the number of clinical trials managed.
- Flexibility: Outsourcing can offer greater flexibility, particularly in managing fluctuations in workload. This can be a significant advantage during peaks and troughs in research and development activities.
- Cost Efficiency: For companies with a limited number of clinical trials, maintaining extensive in-house systems and procedures can lead to high fixed costs. It’s essential to evaluate whether the investment in in-house infrastructure and staff is justifiable.
- Core Competencies: Companies should consider whether they can truly achieve “best-in-class” status for all aspects of drug development in-house, or if certain activities are better handled by specialized external partners.
- Operational Clarity: Employing too many diverse operating models simultaneously can lead to staff confusion and inefficiencies.
Common Operating Models in the Pharmaceutical Industry
Here are some of the typical operating models companies can adopt (that are available in the game):
- In-house: All work is performed by your company’s staff, adhering to your established operating procedures and utilizing your owned IT systems.
- Outsourced (In-house processes and systems): While the work is primarily conducted by contracted staff from Contract Research Organizations (CROs), it still follows your company’s operating procedures and uses your owned IT systems.
- Outsourced (CRO processes & systems, own oversight): CROs conducts the complete work package (e.g. a complete clinical trial) using their own systems and procedures (SOPs). Your company maintains responsibility for comprehensive oversight of the CRO, such as Sponsor Oversight in Clinical Trials.
- Hybrid A (Mix CRO & In-house, In-house IT Systems): All work utilizes your company’s IT systems. Some trials or work packages are outsourced to CROs following their procedures, while other parts are managed in-house using your procedures.
- Hybrid B (Mix CRO & In-house, CRO IT Systems): All work is conducted within the CROs’ IT systems. Similar to Hybrid A, some trials or work packages are handled by CROs according to their procedures, with other parts managed in-house using your procedures.
- Hybrid C (Per Trial Phase CRO or In-house): Complete work packages, such as an entire clinical trial, are either performed entirely in-house (using your procedures and systems) or fully outsourced to a CRO (using CRO systems and procedures). Oversight always remains with your company.
Considering these models, which factors are most critical for your company when deciding on an operating and sourcing strategy?