CWWeekly presents this biweekly feature as a spotlight on issues that executives in clinical research face. This week, writer Suz Redfearn spoke with Clifford Culver, founder and CEO of OnDeckBiotech, an online platform that connects biopharmaceutical companies with CROs and other vendors.
Q: What are some mistakes drug development companies—in particular, startups—make when it comes to outsourcing their operations?
A: They don’t search broadly enough for the right vendors. For example, a biotech company had a project go well with vendor A, so when a second project comes up they have a bias to go back to vendor A. But each of these projects is extremely specialized. While A might be the best vendor in the world to do the first job, they might not be at all great for the second project. It’s very hard to establish a relationship with a new vendor so companies would rather take the risk with A. The result? We see a high failure rate and a lot of extra money spent trying to validate models at vendors.
Historically, the process of searching for vendors and evaluating them has been labor intensive. At a small company, there just aren’t dedicated resources to do it, and at big company, there are layers and layers of checks and balances that can be very time consuming. Research and development projects are led by M.D. Ph.D.s. They investing their mindshare in innovation centered around the science, not necessarily around the business practices. We are dealing with companies that are, in some ways, the most cutting-edge companies in the world, but they are conducting their office operations like it’s the 1970s. It becomes a question of risk management. Trying something new can be scary. If you’ve lived with inefficiencies in the past, you might tell yourself you can just live with them in the future. It’s sometime easier not to rock the boat.
Q: You’ve said before that your company is like an “online dating service” for drug development companies seeking CROs. Why is an “online dating service” needed in this space?
A: What we see in clinical and preclinical drug development is that companies are procuring very, very specialized services that cannot be simply ordered off the shelf. These folks are working on cutting-edge science projects and it can be difficult to predict timelines. As such, the buyer and the seller—the drug maker and the CRO—really have to establish a deep relationship, a firm commitment to dating, because it’s important to understand the project up front and collaboratively problem solve.
We allow these folks to meet and have conversations, date, so they can essentially find their spouse. Like online dating, you can weed through high volume quickly. Also like a lot of online dating, some screening has taken place beforehand. In a virtual setting, it’s much easier to screen people yourself and decide who you’re going to have conversations with. For drug development companies, there aren’t many places to physically go to meet vendors that don’t require you to get on a plane or to open yourself to an onslaught of sales and marketing efforts. With online dating, you don’t have to go through that. You meet in a virtual setting first, which could lead to a much better date later when you do get on that plane. You save a lot of money and so does the seller. It’s a very noisy and competitive marketplace now; companies are sending folks all over the world, and stuffing inboxes with email and newsletters. In contrast, this is equivalent to dropping an awesome potential spouse right on their doorstep. Everyone can get started on the project right away.
Q: Are outsourcing processes along the operations pipeline continuing for those in drug development? Or might any of it start moving back in house?
A: Overall, we’re going to continue to see an increase in outsourcing. But we’re at a point in the cycle where we’ve seen an increase in outsourcing over the last 10 or 15 years, and the cycle is mature enough now that we do hear some execs questioning whether all of the efficiencies that have been promised are real. We think that, yes, ultimately they are real, but we now know that they do require an investment of management mindshare to make sure that these vendor relationships are productive. In short, companies are realizing it’s harder than they thought to manage their vendors, but they’re also seeing that when they manage productive vendor relationships, the model works. I think going forward, the math will match up. Outsourcing will continue to grow and the efficiencies will be even clearer.
This article was reprinted from Volume 20, Issue 05, of CWWeekly, a leading clinical research industry newsletter providing expanded analysis on breaking news, study leads, trial results and more. Subscribe »