In the past five years, analytical testing performed at contract laboratories has increased significantly in the pharmaceutical sector. As biopharmaceutical companies seek to reduce cost, optimize speed, and increase the flexibility of their research and development, this trend will only continue. Pfizer Global Biologics has been using contract organizations for analytical testing for the past five years. This strategy has proven critical in meeting our portfolio demands and has allowed an increase in the total number of drug development projects we manage at any one time.
This article discusses the risks and pitfalls associated with outsourcing analytical testing and effective strategies to circumvent or mitigate these risks and pitfalls. In this article, we will be using the term sponsor to refer to the group outsourcing the work.
WEIGHING THE OPTIONSAnalytical outsourcing must be approached in a systematic manner to ensure that the sponsor receives the greatest possible return on investment as it pertains to time, effort, and overall cost. When choosing a contract analytical laboratory, therefore, the sponsor must keep a series of questions in mind, such as:
There may be additional questions applicable to certain projects, but these questions provide insight into variables that affect outsourcing efficiency with respect to time and money spent.
RISKS OF OUTSOURCING
After the decision has been made to enter into a partnership, the following are some of the possible risks associated with working with a contract analytical laboratory. Through proper mitigation strategies and contingencies, the sponsor will be able to manage these risks. These strategies are also discussed below.
Risk: Contract research laboratories often have a high rate of turnover.
Contract laboratories are very attractive for new bachelor-level college graduates. The contract laboratory provides an excellent opportunity to gain practical, hands-on experience that will allow the laboratory analyst to pursue other options.
The turnover rate is proportional to the demand and density of the contract analytical laboratories in that particular geographic location. For example, the east and west coasts seem to have the greatest turnover rates, whereas certain locations in the mid-west have less employee turnover.
Recommendation: When selecting a contract analytical laboratory, the sponsor should obtain information about the employee turnover rate. The key analysis compares the laboratory analyst turnover rate and the managerial turnover rate. By evaluating these metrics, the sponsor can gain valuable insight into the contract analytical laboratory's philosophy regarding retention.
Risk: Infrastructure at the contract analytical laboratory may not grow proportionally to meet increased demands or workload.
As with all businesses, the key objective for a contract analytical laboratory is to meet customers' expectations while making a profit and meeting its fiscal responsibility to shareholders. Sometimes, because of pressures to hold down costs, contract analytical laboratories do not hire enough support staff to keep up with increasing workloads.
Recommendation: In our experience, it is very important that the sponsor monitor and work closely with the contract laboratory to ensure that the infrastructure positions (quality, metrology, maintenance, supervisory, and administrative) grow as demand for services increases. The sponsor must have consistent interactions with all aspects of the contract analytical laboratory organization—management, business development, quality, and laboratory. It is important to set up regular meetings with all levels, at least quarterly.