When I first made the decision to write an article about CRO size and what impact it has on service, the idea revolved around a ‘David vs Goliath’ narrative. I was going to write about major CROs compared to smaller CROs, then (spoiler alert) come to an inconclusive conclusion.
Gripping, I know.
Well, instead I’ve decided to go down a different route and focus more on why there’s room for everyone in the market. I still want to address the fundamental differences between Top 10 CROs and, well, not Top 10 CROs because I think it’s important. However, from speaking to both clients and candidates every day in this space, I believe that there’s room enough in the market for all sizes of business, despite continuous consolidation.
They don’t really need to compete, because the gulf is so huge that they’re playing different games.
To, briefly, return to the David & Goliath thing, the reason that that fight made headline news in the Old Testament is because it shouldn’t have happened. It was a total mismatch. So, let’s go with the idea that it shouldn’t have happened then, and it doesn’t have to happen today. But in CRO terms, obviously. No-one’s fighting with giants.
When doing some research for this, I read a couple of other great LinkedIn articles on similar topics. One from the CEO of mid-sized CRO Clinipace, Jason Monteleone and another from Boris Reznik, Chairman & CEO of a smaller sized CRO Biorasi.
As they’re both heading up non-top 10 CROs, perhaps it’s not surprising that they make convincing cases for using smaller companies as an alternative. That being said, they both make compelling points which I agree with.
Mr Monteleone makes the point in his article that the bigger the project size as a percentage of turnover means the more care and attention is paid to that project. Whether a project covers 0.1,1 or 10% of your total backlog for the year it will massively impact on how much attention is paid to the project by your Board of Directors or shareholders. A pharma or biopharma business putting their trust in a smaller business is likely to get that trust reciprocated in the form of great service and appreciation.
One example of a small CRO making the most of their niche is Optimapharm whose competitive advantage comes from their high quality of service and direct access to the mecca of patient recruitment in Central and Eastern Europe. They're experts in what they do, and their customers know that they can count on them for a reliable, personable service in the markets they specialise in. That being said, they're not at a size to go chasing after Pfizer. Not yet anyway…
Frankly put, a smaller, more localised, CRO is probably just better suited to handling smaller projects for smaller pharma companies. For the most part, they can offer a more personalised service, and delays in trials often just aren’t acceptable for their bottom line, which also applies to their clients.
On the other hand, a delay to a large scale trial, resulting in a missed deadline could result in millions of dollars of extra costs, which could be financially debilitating for a small CRO. For a multi-billion-dollar enterprise, that’s just par for the course as the likes of IQVIA are well equipped to withstand such a financial burden.
Being a smaller CRO also means that they’re better equipped to react quickly to changes in a client brief in a way that multi-billion dollar enterprises just aren’t set up for.
Both of the commentators I referenced earlier referenced the point that no-one ever gets fired for hiring a Top 10 CRO', which isn’t going to change. However, in my opinion there are certainly some instances where shirking the big names in exchange for someone better suited to a particular client’s needs is the best course of action.
Taking everything I’ve said above into account, there’s obviously times when bigger is best. In fact, there are occasions when bigger is the only option.
If the likes of Pfizer, Merck or Novartis want to roll out a massive global clinical trial for their next drug, then that’s a lot of work. Just recruiting patients is a colossal undertaking that needs vast amounts of time, money, physical resources, effort and a brand name to help bring people in.
In addition to that, bigger trials means more queries from regulators, which means more delays. Due to the rigorous regulatory process on all forms of testing and research, all trials are subject to inspectors going through findings with the finest of fine-toothed combs. That can lead to a few questions being raised in a small localised trial, but scale that up to an international or even global trial and just responding and resolving them needs a whole team of people.
That’s people and resources that the smaller players just don’t have.
However, what we’ve seen recently from the Top 10 is a new strategy. In an attempt to recapture those smaller clients whose projects become neglected they have created new ‘biotech’ teams. For example PPD Biotech as the name suggests focus on nothing but small biotech clients, providing tailored services for those whose needs require a personalised approach.
As a final point on this, who are we kidding? Of course the likes of Syneos and Parexel are going to stick to servicing Top 10,15 or 20 pharma. Working with the biggest and best is how you become a multi-billion-dollar organisation. So let’s celebrate that and their success.
In one of the articles I mentioned earlier, Boris Reznik introduced the staggering statistic that up to a third of all currently active trials are seriously behind schedule. Now I’m sure that a lot of these delays come from the regulatory process and inspections I mentioned earlier as well as a massive amount of other, unforeseen, circumstances.
However, I’m sure that that figure could be brought down significantly by pharma and biopharma companies taking more time to select the CRO that’s right for them. I think that there’s room enough for everyone in the market. They could even work together.
Collaboration could be the key to a globally more efficient service from CROs. Passing projects up or down the pyramid could stand to benefit everyone in what is a stratospherically popular market at the moment.
Now, I know I’ve pitted the big, big guns against everyone else in this article which might not be a fair reflection of the market. I know that there are some medium sized players such as Premier Research looking up who, on occasion, do take a swing at Goliath and land, but I wanted to speak about the broader market in general here.
So, disclaimer out of the way, what do you think? Is there room for everyone? Or are we doomed to a future of not being fired, but potentially missing out on the best partner for us?
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