Operational Pressures

The potential impact of the economy on preclinical drug development

By Steve Snyder

In this column, we will take a look at preclinical research operations and review their impact on the success of a CRO’s business and the sponsor’s outsourcing experience. Preclinical operations are incredibly complex due to the dependency of multifunctional inter-relationships. Unfortunately the current global economic situation has resulted in cost saving initiatives and layoffs at many CROs. This is understandable. These businesses need to do what is necessary to stay in business and to demonstrate responsible fiscal management to their investors. However, how do a CRO management team and its sponsors know if cost-saving initiatives have impacted the effectiveness of operations?

To answer this, we must first answer the basic question: What are preclinical operations? If we are talking about the conduct of preclinical toxicology studies, the answer is multifaceted. Preclinical operations include but are not limited to: facility management; the coordination of resources; regulatory compliance; the development and execution of work processes; managing and developing the research staff; effective interaction with customers; and leadership. Let’s take a look inside each of these broad categories:

Facility Management

Obviously, a CRO needs sufficient facilities to conduct preclinical studies for its clients. As I write this, the economic downturn has curtailed pharmaceutical and biotechnology spending, so there is a glut of open facility capacity in the North American CRO industry. Just because the facilities exist, they don’t operate themselves. Facilities need to be cleaned and maintained. It is critical that temperature and humidity ranges are maintained each day, including the hottest summer months and the coldest winter days. If any single study room experiences a temperature and/or humidity excursion from established ranges, the excursion and its impact on the preclinical study must be documented. Yesterday, many of us in the Midwest experienced prolonged power outages due to summer thunderstorms. CROs need to have effective contingency plans for unexpected facility challenges and, perhaps more importantly, they need to have experienced staff to address those challenges for which there are no set contingency plans (e.g., air handler failures). Finally, preclinical operations produce trash that must be removed from a facility in a timely and effective manner. These are just some of the reasons why sponsors need to periodically visit their CROs, because the appearance and “feel” of a facility is often a leading indicator of operational effectiveness.

Coordination of Resources

The conduct of a preclinical toxicology study requires the coordination of laboratory animal availability, animal caging, animal bedding, animal food, water, equipment (scales, balances, stirrers, infusion pumps), glassware, laboratory equipment for test article preparation, laboratory equipment for the analyses of test article in biological samples, necropsy equipment, labels, personal protective safety equipment, tables, carts, veterinary supplies, reagents, containers, notebooks, forms, pens, research apparel, and much, much more. The success of a preclinical CRO and a customer’s outsourcing experience are directly related to effective resource management. Can you imagine reaching a critical phase in a preclinical study only to realize the essential equipment is not available? As CROs are trying to cut their costs and control expenses, sponsors need to be sure that these initiatives aren’t so aggressive that they impact the integrity of their studies.

Regulatory Compliance

There are multiple regulations that govern preclinical research operations. The regulations may vary based on the global location of the preclinical CRO. For example, in the U.S. these regulations include:

FDA – Good Laboratory Practices: Broad regulations that address study data integrity, study management, facility management, study reports, personnel training, data archives, quality assurance, and much more.
USDA – Animal Welfare Act: Specific regulations that govern the care and use of laboratory animals.
DEA – Controlled Substance Act: Governs the use of any controlled substances that may be used within a preclinical CRO.
OSHA – Occupational Safety and Health Administration: Governs the safety of workers and safe practices in facilities.
Nuclear Regulatory Commission: Governs the use and handling if radioisotopes are used in the facility.
Other federal, state, and local regulations that govern environmental impact to fire safety to fair labor practices.

Compliance with these regulations is not just a key to good business practices, but is necessary just to stay in business. Unfortunately, scientists and “business types” are often slow to embrace regulations so it falls to the operational management to insist on good regulatory practices. As you may imagine, each set of regulations brings with it requirements for significant documentation. CROs can be cited when they lack the documentation to prove that they are operating in regulatory compliance. The problem is that even if a procedure was performed in compliance with applicable regulations, the view of most regulatory agencies is, “if you didn’t document it, you didn’t do it.” To those who aren’t familiar with preclinical operations, this is the regulatory standard in the U.S. and it is generally not open to discussion. Accordingly, when CROs are cutting costs and staff, they need to be sure that these initiatives do not inadvertently impact regulatory compliance. For sponsors, things can go wrong in preclinical research operations even during the best economic times, so it is important that you watch the operations of your CRO closely. You may be surprised to find that the CRO may even welcome your external perspective.

Work Processes

Every preclinical research operation is required to have standard operating procedures (SOPs). These describe every significant work process in the preclinical research operation. They may address topics from employee training to how to calibrate laboratory equipment to how to document communication with co-workers to how to wash an animal cage. There is even an SOP that describes how SOPs will be maintained. That particular SOP describes how often each SOP needs to be reviewed. If an SOP requires significant changes, then all employees that function under that SOP are required to read the revised SOP and document this action. Even in the best economic times, SOP management is a huge challenge. Technically, the test facility management has ultimate responsibility for SOPs, but this responsibility is often delegated elsewhere in the organization. This part of the operation is at constant risk for regulatory non-compliance. Common compliance issues include:

Failure of functional areas to review an SOP on a designated periodic basis;
Failure of employees to read and document their awareness of changes in an SOP;
Failure of an SOP to reflect current work processes;
Failure for employees to follow an established SOPS;
Failure for employees and management to follow the SOP pertaining to the documentation of employee training.

Even if an employee reviewed a revised SOP but failed to document it in its training records, the FDA would regard this as non-compliance and could say that the employee wasn’t sufficiently trained. Again, if you didn’t document it, you didn’t do it.

Research Staff

We have seen that preclinical operations require facilities, resources, regulatory compliance, and work processes. These items are required before a single study is ever conducted. The research staff is responsible to make sure that all of these functions run smoothly. The staff are also responsible for the actual conduct of the study; the integrity of the study data; and the study documentation. Since no one person or group can conduct all of these tasks, a CRO’s preclinical operation is dependent on multiple functional areas (i.e., groups of people) that have specific responsibilities that contribute to the overall operation. In my opinion, the effectiveness of the research staff is often the greatest strength of a preclinical operation, as well as its biggest weakness. People are required to follow established procedures and to work in coordination with other functional areas. The weakness in the operation is because humans make mistakes. Conversely, dedicated staff can go above and beyond their defined responsibilities to keep operations functioning smoothly.

The problem is that no preclinical operation or individual can work in crisis mode for extended periods of time. The size of the post-layoff staff may not be able to handle the workload, especially when the business demand increases. Communica-tions within and across functional areas can break down. People get ill or have unexpected family issues that affect their availability. People worry about compensation, job security, opportunities for career growth, management’s assessment of their job performance, organizational changes, work schedules, and overtime requirements. Preclinical operations at CROs never stop. The operations run at some level of activity each day of the year. Even in the best economic times, having and retaining an effective research staff is a significant challenge. Management and sponsors need to constantly “check the pulse” of the staff to make sure that operations are running smoothly. A distracted or unsettled research staff can be a leading indicator for operational issues. Even in these difficult economic times, a research staff will tire of hearing how lucky they are to have a job. Fear is not an effective long-term motivator. I have seen some CRO management teams shrug off these warning signs only to realize later that their operations were dysfunctional. The “state of the staff” is something that sponsors should watch for during every visit to a CRO.

Customer Interaction

You wouldn’t think that this was an operational concern but when preclinical studies start at a CRO, the effectiveness of customer interactions can make or break a business relationship, not to mention the success of the outsourcing experience. Like all of the other items on our list, customer relations are a challenge during the best of times. Some sponsors will terminate a business relationship with a CRO solely due to poor communications. With the recent economic pressures, a sponsor may learn that its key contact at a CRO no longer works there. Reducing overhead costs through layoffs may be necessary but there is nothing that can test a business relationship more than when the CRO staff changes during the conduct of a study or the preparation of a study report. Again, thoughtful operational changes by CRO management and sponsor oversight can go a long way toward maintaining acceptable communications.

Leadership

You will note that I did not use the term “management” to describe this last aspect of preclinical operations. CROs are full of lots of managers, associate directors, directors, executive directors, vice presidents, and so on. No, there is no shortage of management in CROs. However, in my opinion, being a manager does not necessarily equate to being a leader. Many make the mistake of believing that their titles make them leaders. Not so. I am not going to get into a seminar on leadership but, in my opinion, effective operational leaders take responsibility; they don’t make excuses, they don’t point fingers, and they get the job done correctly because it is in the sponsor’s best interest and that of their CRO. Furthermore, these individuals distinguish themselves by understanding that “they don’t know what they don’t know.” They are humble and don’t claim to understand every operational aspect because they do understand that it isn’t possible. Acknowledging this makes them more effective leaders but it requires courage in a business culture where management is expected to have all of the answers. Maybe I just need to justify my advancing age, but I don’t see a lot of emerging operational leaders anymore. I have been fortunate to work with several individuals in the industry whom I would trust in a heartbeat because they have chosen effective operational leadership rather than reciting the CRO’s most recent business development hype. These particular individuals believe that effective and trustworthy operations will attract and retain customers better than a slick business development initiative.

The problem is that preclinical operations are not taught anywhere. Much of this knowledge is gleaned through on-the-job experience. Sadly, we are now in an era where fewer and fewer managers have direct operational experience because less experienced research staff is drawn to career opportunities outside of operations. I’ve said it before and I’ll say it again. When it comes to preclinical operations, there are those who get it and those who don’t get it. The problem is that those who don’t get it don’t realize that they don’t get it. If you are in CRO management and you need to cut staff, make sure you don’t cut out your operational knowledge base. A clear sign of a preclinical operation with leadership issues is one where everyone is waiting for someone else to show initiative or take responsibility. If you are a sponsor, this is just another reason to watch your work at a CRO.

When you consider the information that I shared above, perhaps you can appreciate the complexity of preclinical operations. This is why preclinical CROs don’t proliferate like Wal-mart or Starbucks. We’ve seen that they require: adequate facilities, the ready availability of resources, established processes, regulatory compliance, trained research staff, an effective management team, and the reputation for delivering quality work in a timely manner. In addition, all of these functional areas need to work in synchrony. A preclinical CRO is expensive to build from scratch and the operations may be too complex to develop without external expertise.

During these economic times, many but not all of the North American CROs have undergone layoffs. At least one CRO chose to spin this as taking the opportunity to become leaner and more effective. Kind of makes you wonder why they didn’t seize that opportunity when the economy was better? This is a classic example of marketing hype that contradicts operational fundamentals. What isn’t mentioned is that many of these same CROs will need to try to rehire staff when the business demand increases if they hope to run their facilities at optimal capacity. In other cases, we hear where experts in process improvement will identify opportunities to save time and money. Process improvement should be an ongoing initiative in any preclinical operation, but it should not replace common sense. Process improvement leaders should remember that research staffs aren’t widgets; there are operational nuances that can’t be captured on a process map. Now that I have irritated all of the process improvement professionals reading this column, consider what seems to be lost on many: ultimately, you never really are in control of a preclinical research operation.

What everyone forgets is that CROs are scientific research organizations. You can control work processes but you can’t control science. Science happens and not always the way that you think it should. Sometimes, there are no set processes, no books, and no databases to tell how to respond appropriately. This is when operational leadership is critical. Management and sponsors sometimes forget that. Every CRO can benefit from process improvement initiatives that are carefully coordinated with — and not conducted at the expense of — ongoing preclinical operations.

Preclinical operations are not sexy. I don’t think I’ve ever heard them discussed at cocktail parties (admittedly, I am not all that active on the cocktail party circuit). When preclinical operations are running smoothly, all of the complexity that was described above goes unnoticed, hence the industry saying, “Quiet is good.” However, industry veterans understand that preclinical operations can encounter significant problems without any previous warning. If you are a sponsor, use the aforementioned information to help scrutinize the operations at your CRO. If you are in CRO management, don’t let quiet operations lull you into a sense of false security. Be careful with your cost-cutting initiatives and don’t fool yourself into believing that you can’t adversely impact your own operations. You may be confident in an economic recovery but make sure that the light at the end of the tunnel is not indicative of a future operational train wreck.

Articles » 2009 » September 2009 » Preclinical Outsourcing