"War for talent is major challenge before APAC CROs"
-Anand Tharmaratnam, President IQVIA Asia Pacific, Singapore
Pharmaceutical and biotechnology companies are increasingly outsourcing clinical trials to contract research organizations (CROs). In 2015, the global contract CRO market generated $ 31.4 billion in revenue, and is forecast to grow at a CAGR of 12.1 per cent, to reach $56.4 billion by 2020 (Frost & Sullivan). The growing demand for CROs underscores the importance of outsourcing in drug research and development. Rising research costs coupled with the loss of revenue due to drugs going off patent are leading large bio/ pharmaceutical companies to outsource research and development activities in a more cost-effective manner. However, to date, CROs penetrate only about 29 per cent of the potentially outsourced R&D budget. It is anticipated that CRO market will be primarily driven by greater penetration of the outsourcing R&D budgets. Recently, Anand Tharmaratnam, President, IQVIA Asia Pacific spoke to BioSpectrum Asia, Singapore regarding the current trends and challenges faced by the CRO industry in APAC. Edited excerpts; What are the significant trends for the CRO industry in APAC for 2018? The use of technology and data to improve decisionmaking and execution – by far the biggest trend we’re seeing. Most CROs are investing heavily in technology and analytics; many have added new sources of healthcare data. This convergence of tech and data is transforming how trials are designed and conducted. Leading this are large multinational CROs with deep pockets for tech development and data acquisition. For example, last year we rolled out new tech tools in Asia Pacific to improve recruiting through better site selection and identification of target patient populations; investigators are adopting our specialized apps and software systems to streamline monitoring and automate consent form completion. The use of real-world data to inform the clinical trials planning process is another trend accelerating in 2018. Instead of relying on data from past trials to design new trials we’re using real-world data to fill in blind spots. Clients are seeing the benefits. I believe our biopharma client base is moving toward an ‘early majority’ phase of innovation adoption. Clients don’t want to be left behind by competitors using these new tools. Even more exciting innovations are coming. Artificial intelligence, machine learning and natural language processing should result in shortened cycle times and improved quality at every stage of development. For example, it now takes weeks to translate study documents into languages needed. Using technology this can be done in days, with human translators double-checking the machine-generated translations – saving money and time while improving quality.
Soaring R&D costs and declining ROI are forcing companies to break from traditional practices. Delivery approaches are changing too. Multinationals are shifting toward a functional service provider model in areas such as monitoring. For smaller companies we’re seeing a trend toward pure outsourcing, especially in regulatory and study design. Lastly, medtech development in Asia Pacific is picking up steam, with growth opportunities for CROs that have this capability in their arsenal. This trend is fuelled by two factors: the biopharma industry’s increasing appetite for incorporating digital technologies into therapies, and Asia Pacific’s advantages in medtech development speed and costs. One cannot underestimate the trend toward digital therapies, both stand-alone and those melding molecules and digital. Many traditional biopharma companies are investigating such combination products. The US FDA last year approved the first-ever prescription digital therapy (developed by Pear Therapeutics) for the treatment of patients with substance use disorder. A few months later Novartis and Pear Therapeutics announced a collaboration to bring more prescription digital therapeutics and software apps to market. What are key challenges? How do these challenges impact early stage pharma companies? Data privacy and data ownership will be an ongoing challenge. Adoption of technologies powered by aggregated, de-identified health data requires that the public trust that their personally identifiable
records will be safeguarded. Data providers must balance their roles as stewards of data while providing access to trusted parties and institutions that will use anonymized healthcare data to develop life-saving drugs more efficiently and improve health outcomes.
Specific to early stage pharma I see their biggest challenge as finding the expertise they need. Where do they place their bets to achieve the greatest likelihood of success? The earlier the stage of development the greater the uncertainties. These companies need data but also the expertise to make sense of it. Doing that efficiently on a limited budget is early stage pharma’s biggest challenge. For large multinational companies, the challenges are different. They face adopting new technologies while co-running or phasing out legacy systems. That’s an advantage for emerging biopharma – they aren’t saddled with legacy systems. We see emerging companies in Asia being very open to innovative ideas and adoption of new technologies. They’re not tied to past practices or legacy systems.
The overall receptivity of biopharma and regulators to adopting and/or approving innovative approaches is a challenge. While biopharma is talking a lot about innovation, some companies are paying lip service while others are ‘walking the talk’. We still see conservatism as the prevailing mindset overall for large companies; this is slowing the adoption of innovation. Finally, for CROs, a major challenge in Asia Pacific is the war for talent. With biopharma and medtech companies increasingly using CRO services in the region, acquiring and retaining top talent is crucial. We’re using innovative ways to do that. It’s not all about salary. In addition to career development, today’s younger workers want to work for a company that offers flexibility, work-life balance, and is socially responsible. There is connect between CROs and biopharma companies achieving their R&D targets. How do you envision the relationship of a CRO with such companies to achieve their mutual targets? The client is always at the center of any successful client-CRO relationship. Every client is different: different strategies, different short- and long-term goals, immediate needs, etc. Most important is for a CRO to understand those needs and deliver against them. Achieving success and building trust are essential to move from a transactional, cost-based relationship to a strategic one focused on value creation. A strategic relationship with a trusted CRO allows a biopharma company to keep core capabilities in house and outsource non-core functions. Both parties align on mutually agreed-upon objectives. This shifts responsibility toward the CRO to deliver with efficiency, quality and speed; it is accountable for outcomes vs
simply providing services on a fee-for-service basis. The future belongs to CROs that are tech-savvy, datarich, client-centric, flexible and eager to share risks and rewards. For some clients the traditional fee-forservice, ‘extra hands for hire’ CRO model is fine; it’s being transformed for the better by tech and data too. Other clients are eager to innovate. They want to access the full range of what leading global CROs can offer – therapeutic expertise, transformative tech, data-driven insights, global infrastructure, etc.
Ten years ago, most of our clients in Asia were large multinationals. While each had specific needs, they were more alike than dissimilar. Now home-grown emerging biopharma companies – particularly in Greater China, Korea, Singapore and Australia – account for a large portion of our clients. These companies are diverse; they are open to innovation; they lack deep pockets; they want a single point of contact and fast decisionmaking. To compete effectively across that client spectrum requires a model that is extremely flexible and nimble. Winning CROs must be able to show they can deliver outcomes better than the competition – faster, better, cheaper, with high quality. It’s important to remember that our toughest competitors are our clients themselves. Perhaps most important for innovation support is the ability to leverage third-party technology. Tech solutions are constantly emerging. The ability to find and adopt innovative third-party technologies to address client needs is essential to a successful 21st century CRO business model. The acquisition and merging of companies within the pharmaceutical industry has decreased drastically. Do you think this is impacting the CRO industry? How? With merger activity having slowed, we’re seeing demand from large multinationals for functional service provider (FSP) agreements. The FSP model gives these companies greater oversight of staff that we provide to carry out a function for the client – a combination of staff, control and flexibility. On the flip side, we’re seeing greater demand from emerging biopharma companies for outsourcing entire clinical programmes. These requests can extend beyond design and execution of studies to commercialization and licensing. The issue these companies want addressed is ‘How can we maximize the value of our portfolio?’ They see it holistically across the clinical-commercial continuum vs ‘How do we get to the next stage of development for this asset?’
Priyanka Bajpai priyanka.baj[email protected]tiv.com What kind of a CRO-specific business model best supports innovation?