The Society of Toxicology (SOT) recently held its 46th annual meeting this past March in Charlotte, NC. This meeting features an extensive agenda of presentations by scientists from Pharma and Biopharma companies, CROs, academia, and government agencies. Since this venue serves as a gathering place for scientists from around the globe, it is also an ideal opportunity for those businesses that support scientific research to meet with actual or potential customers in a neutral setting. Many of the companies that provide preclinical outsourcing services are present at this meeting. For sponsors and consultants, the meeting provides a prime opportunity to share outsourcing experiences. The most common business topics that were informally discussed during this meeting are described below:

The Pfizer Effect

Last year at this time, those that followed the preclinical outsourcing industry wondered if the expansion projects at multiple CROs would result in excess capacity in the marketplace. Covance, MPI, Charles River, and SNBL are among the CROs that have either opened new facilities or plan to open new preclinical facilities. Although the demand for outsourcing a year ago was as robust as it is today, there was little concern among sponsors about getting access to preclinical capacity at CROs. What a difference a year makes! With Pfizer’s announcement that it will lay off employees and close research facilities in Kalamazoo and Ann Arbor, MI, other sponsors are now trying to determine what impact these actions will have on the preclinical marketplace. The rumor mill is functioning in high gear!


Yes, these are all rumors, but Pfizer’s competitors have taken note. If Rumor # 2 is true, other sponsors may not be able to get ready access to capacity at the leading CROs and therefore, may be forced to use second-tier providers or encounter project timeline delays. Even though these were just rumors, several large Pharma companies were inquiring about developing their own dedicated space agreements. Perhaps what is most surprising is how Pfizer’s announcement has seemed to have triggered a lot of sponsor activity based solely on the perception of what could happen in the industry. Only time will determine the truthfulness of these rumors and the impact, if any, on preclinical outsourcing capacity.

Regarding capacity, in the coming months this column will feature an interview with an industry veteran who is an expert in facility management and we’ll learn why there is more to capacity that just a study room in a research facility.

Quality Concerns

Nearly every sponsor I met during the meeting shared a story of a bad outsourcing experience with me. Truth be told, sponsors always like to share their bad outsourcing experiences, but what caught my attention was that multiple sponsors had bad experiences that have seemed to occur across the industry. It is not uncommon to hear that one CRO or another may be encountering quality issues, but I heard multiple examples of quality issues that occurred at multiple CROs. Several sponsors reported that they started seeing quality “glitches” on their studies during the end of last year and that this trend has continued into 2007. Some of these glitches included administering the wrong drug, administering the drug to control animals, administering the wrong dose concentration, procedural errors, and failure to provide sufficient oversight on studies.

In several of these cases, studies have been repeated and/or the sponsor took its work to another CRO. In the past, sponsor companies that encountered these issues would suspend or diminish their outsourcing activities and conduct all future studies in their internal research facilities. However, with the increasing trend among sponsor companies to reduce headcount, they no longer have this option. Several sponsors have indicated that they have significantly increased their monitoring activities at CROs with the hope that this increased scrutiny will contribute to a successful outcome. I know that I have seen a significant increase in requests to monitor studies on behalf of sponsors this year. Sponsors have also increasingly asked me to identify preclinical CROs that offer the best opportunity for a successful outsourcing experience. While CROs are ultimately responsible for quality issues, sponsors need to be sure that they are communicating critical information in a timely manner so that the CRO staff are appropriately prepared and informed to conduct the sponsor’s study. Sponsors also need to continually assess whether their CRO partner is able to effectively meet the growing outsourcing demands through proper training of new personnel and effective work processes.

In a future article, we’ll hear from a quality assurance professional about regulatory trends in preclinical outsourcing.

Emerging Markets

It seemed as if the entire sponsor community is trying to determine the best business strategy for preclinical outsourcing in India or China. The perceived opportunity for significant savings by placing work in these countries seems almost intoxicating for some sponsors. Clearly, the impetus to establish an emerging market outsourcing strategy appears to be originating from the financial and senior management ranks in sponsor companies. While sponsor scientists are exploring these opportunities, I think it is fair to say that they may not share the same level of enthusiasm. I am not suggesting that there are not real opportunities in India and China but I believe it is safe to say the preclinical outsourcing capabilities in these countries are continuing to evolve. Sponsors continue to ponder how they can effectively manage work from a distance given their need to feel confident with the quality of the work and regulatory compliance. Accordingly, one of the emerging challenges that is facing sponsors is how to effectively monitor studies in China and India? If the perceived “Pfizer Effect” may be driving sponsors to explore opportunities in these countries, then issues like the “Quality Concerns” that are occurring in the North American CRO market almost certainly represent, in part, the hurdle that is confronting preclinical CROs in emerging markets. Regardless of geographic location, a successful preclinical CRO is one that best understands and meets a sponsor’s needs . . . over and over and over again.

Customer Service

No article of mine would be complete without sharing one of my recent experiences. I stayed at a major brand-name hotel last week while I was working on a consulting project. When I arrived at the airport in this city, I called the hotel for the airport shuttle and was informed that the shuttle was out of service. No problem: I caught a cab to the hotel (which the hotel paid for) and checked into my room. Before I went out for dinner that evening, I decided to get some cash at the lobby ATM. When I didn’t get a receipt for my transaction, I checked with the front desk, since we now live in the era of identity theft. The front desk attendant informed me that the ATM “had been doing that for a while” but I shouldn’t worry because if there was a paper jam then all receipts would be shredded. Okay. Upon returning from dinner, I scheduled a wake up call for 6 a.m. the next morning. Imagine my delight when the phone rang at 6:25 a.m. to deliver my wake-up call. I was in the shower since I already had been awake since 5:00 a.m. because my room temperature was either too hot or too cold during the night. I acknowledge that I may be getting crankier with age, but do you really think that I will ever stay in this hotel again?

This amusing story is the perfect introduction to what sponsors want the most from their CROs: good customer service! A CRO can have the best facilities and the best scientists in the world, but you would be amazed how many sponsors will take their work to another provider simply because someone did not return a telephone call or respond to an E-mail message. This may sound extreme but many sponsors believe that if a CRO cannot master simple communication courtesies, then perhaps they should work with a provider who will pay better attention to them. This is the feedback that sponsors shared with me during the SOT meeting. Fortunately or unfortunately, it can be that simple.

These business briefs have provided another glimpse of how sponsors view the preclinical outsourcing industry. Some preclinical providers would have you believe that their growing capacity (i.e., bricks and mortar) is the key to rapid and successful drug development. As we have seen again and again, facility capacity is worthless without the availability of the experienced staff. People conduct research, not facilities.

Steve  Snyder is a consultant with more than 25 years of experience in preclinical toxicology as an outsourcing customer and provider. He can be contacted at [email protected].