The rationale cited for these megadeals is that global bio/pharmaceutical companies favor large CROs with broad capabilities in their selection of preferred service providers. These "strategic partnership" deals are the cornerstone of global bio/pharmaceutical companies' current sourcing strategies, which seek to leverage their massive buying power while reducing sourcing overhead expense and improving coordination with the CRO.
We have already seen a major shift in sourcing strategies at one of the largest bio/pharmaceutical companies. Pfizer was an early proponent of the functional service provider (FSP) sourcing model but has now shifted to the integrated service provider (ISP) model. In the FSP model, Pfizer sought to engage the best-in-class service provider in each clinical research activity (e.g., site monitoring, data management, or central laboratory services) and to have those best-in-class providers support all of their trials. However, Pfizer executives found the FSP model too costly because too much internal overhead was required to coordinate the activities of the various FSPs.
In its most recently announced strategic CRO deals with Icon and Parexel, Pfizer has moved to the ISP model in hopes of eliminating the high internal overhead costs. Now, Icon and Parexel will provide a broad range of services to each of the clinical trials they will manage on behalf of Pfizer.