More Attention Needed to Vendor Qualification, New Benchmark Report Says
A new benchmarking study that assesses vendor qualification assessment (VQA) practices is aimed at helping sponsors, CROs and sites streamline and reduce the cost of selecting vendors, a task that is increasing in complexity.
Because vendor qualification activities aren’t budgeted and analyzed as an independent function, most companies end up absorbing the cost as an operating expense and miss the opportunity to collect information that can improve their practices, according to the Tufts University Center for the Study of Drug Development (CSDD), which surveyed 120 companies last year to gather baseline data on VQAs.
CSDD Deputy Director Ken Getz says companies need to examine their processes and look for problem areas, something the industry isn’t doing, and the CSDD study, released in May, is designed to set a benchmark for that analysis. “There are specific phases in the vendor qualification process where there are bottlenecks that can be addressed,” he says.
Sponsors and CROs as a group perform about 25,000 qualifications per year, the survey shows, with each company spending an average of $279,990 per year on qualifying new vendors and $78,841 on requalifying existing vendors.
VQAs have increased in recent years and are expected to continue growing, the study shows. In 2018, each company conducted an average of 20.4 assessments compared to 14.4 in 2016. Survey respondents indicated they expect to conduct an average of 25.8 assessments this year.
CSDD found that sponsors, CROs and sites spend almost five months evaluating and negotiating contracts with single-service vendors and nearly seven months for multiservice vendors. That timeline is lengthening, Getz told CenterWatch Weekly, due to increasing customization of vendor services, especially in the areas of new technologies like virtual and remote trial applications. As vendor services touch on more functions of a company, new requirements must be added to the qualification process, Getz says, making it more complicated and lengthier.
The study shows that respondents evaluate vendors on 24 different factors, ranging from data privacy and IT security, to research and development ethics, employment principles, staff training and insurance coverage.
Getz says he was surprised to find that past experience with a vendor didn’t make the requalification process much faster. Once a company collects required information from a potential new vendor — a process that averages 40 hours of work per vendor — an additional 30.7 hours are spent on actually vetting and auditing that vendor. In contrast, the process of requalifying an already-approved vendor averages 37.2 hours.
“You would think that once a company is familiar with a vendor … that the requalification process would be compressed. And we didn’t see that,” Getz said.
Sponsors and sites could learn something about how to improve the VQA process from CROs, he says. The CSDD study shows that CRO process cycle times are significantly faster and more resource-efficient than sponsors, completing 4.5 times more new qualifications than sponsors. CSDD theorizes that this may in part be due to “the urgency that CROs place on meeting clients’ tight project timelines and budget requirements and on achieving corporate operating profit targets.”
If CROs are successfully abridging the process, Getz says, “What can be learned from them to standardize and shorten the process?”
CSDD conducted the study in cooperation with the Avoca Group and 11 pharma and biotech companies and two CROs. Participants included Allergan, AstraZeneca, Biogen, EMD Serono, Janssen, Merck, Otsuka, Pfizer, Tesaro Bio, Ultragenyx and Vertex. CROs were represented by IQVIA and Parexel.
Future studies CSDD is considering could help identify more solutions, he says. Tying the vendor qualification process to performance measures like speed, quality and cost could determine if there are practices that are predictive of higher performance or a higher level of efficiency. Another approach would be to look at risk assessment, isolating specific areas most associated with a successful vendor relationship.
“There are many other areas that we have not yet had a chance to incorporate into this framework,” Getz says.
To read the abstract, click here: https://bit.ly/2Y7fiH9.