Bioanalytical Outsourcing

What factors affect outsourcing decisions?

By Anthony J. DeStefano and Stephen Lowes

The analysis of biological samples for drugs and their metabolites in a regulated environment is an integral part of nearly every drug development program. The toxicological and clinical programs that require bioanalytical support are critical to establishing the drug’s safety and efficacy, and can involve many thousands of analyses spanning multiple species, studies and years. In a pharmaceutical R&D environment, where multiple drugs are in various stages of development, management of the logistics, costs and science involved with this process can be a complex task. Outsourcing bioanalytical work to contract research organizations (CROs) while adding another level of complexity to managing drug development, has become an essential strategy for pharmaceutical companies. Deciding when, where and what to outsource is a multifaceted exercise. An assessment of the factors affecting the decision to outsource is an important step in initiating or improving such outsourcing strategies.

With unlimited talent and resources, all method development, method validations and sample analysis could (in principle) be done in house with quality carefully monitored and controlled and project timing managed to meet all company priorities. But who has unlimited talent and resources? Multiple programs running in parallel require a large commitment of capital, space, people and logistics. For most companies, gaps in capability, capacity, money or time drive the decision to outsource all or part of the workload.

Capability – Managing The Bioanalytical Project

Companies considering outsourcing are well advised to consider how an outsourcing relationship with a CRO can match up respective core competencies. CROs themselves should be cognizant of this and strive to develop and provide capabilities to their clients that complement the existing in-house capabilities. Across the pharmaceutical industry there will be a spectrum of in-house resources depending on the size of a company and associated business strategy and philosophy. So there is no “one size fits all” bioanalytical outsourcing model for a CRO and sponsor to adopt. Rather, finding and matching competencies is a key element of establishing the optimum outsourcing relationship.

For small or mid-size companies, limited scientific expertise and resources can be a frequent reason to outsource. Two questions to ask are, “Is there in-house expertise on the compound?”, and if so, “Is the skill set better applied to something that can’t be outsourced?” For example, a drug-interaction study may involve a generic drug with which the sponsor has no experience, but whose validated assay is available at a CRO. While the capability might exist to develop and validate this assay in-house, the decision needs to be made as to whether to invest the time and resources in this effort or to outsource. Similarly, an analysis may involve a compound class new to the sponsor’s development effort, yet a CRO has previous experience. Many other examples exist where the available chemistry and biology experience can influence the decision.

Lack of the proper equipment is another key inducement to outsourcing. A CRO may have better sample handling equipment (e.g., robotic liquid handlers), specialized equipment (e.g., high-throughput homogenizers), new equipment providing opportunities for faster, easier analyses (e.g., latest chromatography developments, multiplexed instruments), or instruments with higher sensitivity (e.g., latest mass spectrometer models). This is again a situation where a CRO can save a company time by providing faster method development or obviate the need to bring in and master new technology with all its associated investments.

The issue of capability with regard to regulatory requirements has also come into play recently, driven by quality issues uncovered by the FDA and by a recent workshop and subsequent white paper where issues such as incurred sample reanalysis and proper quality control sample placement received substantial discussion1,2. On one hand, there is the concern among some companies that methods once assumed valid and well under control at a CRO may in fact not be. Sponsors may need to scrutinize these outsourced methods further and require that the CRO adequately demonstrates the method was properly validated and performs to current standards rather than to the bioanalytical method validation standards that applied when the method was originally developed. This may lead to critical studies (e.g., bioequivalence) being brought in-house by large pharmaceutical companies that might have outsourced these in the past. On the other hand, some small or specialty pharmaceutical companies have become concerned with their own ability to meet the regulatory requirements using in-house staff and capabilities and are thus looking to CROs for more analyses than they might have in the past. The attraction of outsourcing all the GLP work to an experienced CRO with sufficient capacity is often a persuading factor for the smaller company.

Capability – Working with CROs

The relationship between a sponsor and a CRO is like any other long-term relationship — it takes a lot of work, a reasonable amount of compatibility, and a good understanding of mutual needs. This interaction has been discussed in detail in previous articles3, so we’ll just review the highlights here. The skill set needed to work successfully with a CRO is in many ways similar to that needed to work in an in-house bioanalytical environment. To successfully transfer an assay and deal effectively with issues as they arise requires:

• A good communication system and people with excellent communication skills to assure that issues surface and are adequately vetted in a timely way
• Good scientists (problem solvers) at both the CRO and sponsor sites
• A good understanding of the methodology and systems at both sites
• The ability to put blame aside and focus on the problems and their root causes

Assuming a method transfer, a well-written description of the method — with all the details and “tricks” adequately described — goes a long way to minimizing the technical issues. Unfortunately, these “tricks” are often not fully appreciated ahead of time, since the method was working in the sponsor’s hands. It is only when the method fails at the CRO that it becomes apparent that a subtle detail is a critical aspect of the method and then only after a significant investigation may have already occurred. In addition, the CRO may need to automate or otherwise modify the method to maximize efficiency or throughput, potentially yielding surprises in method performance. The ability to recognize and communicate the issues early and focus good technical resources from both sides on the problem is critical to resolving the problems quickly and keeping the program on track. Identifying and empowering single point of control individuals to manage the practical events of the project is very important. Particularly when a sponsor contracts multiple programs to a given CRO, the scenario of competing priorities is likely to occur. Being able to resolve these priority conflicts expeditiously is an important factor in facilitating the outsourcing program. To get to this point requires a great deal of trust and confidence between the sponsor and CRO, which can take time to develop.

In addition to the big technical issues, small points can sometimes cause delays with outsourced bioanalytical work. Method feasibility and validation plans with clear expectations and criteria should be written prior to sending a method for transfer so it is clear what the scope of work is. Similar instrumentation or instrument platforms, while often not essential, can be helpful when method issues arise. Communication and timing expectations — such as project milestone dates, how often to communicate and by what means, the format for validation and study reports, and the number of interim data transfers — need to be established up front to avoid timing issues later. Pre-defined templates for data tables, reports and the review process for such summaries are invaluable for avoiding rework.

Capacity

For many sponsors, capacity is one of the biggest factors influencing the outsourcing decision. Capacity takes many forms, from systems to equipment to people, and, in turn, is intertwined with timing and costs. As the number of studies and samples to be supported in-house grows so too does the infrastructure needed to support it. There is a need for (among others):

• Sufficient sample preparation equipment, instrumentation and trained personnel to analyze the samples in a timely way. This is further complicated if both chromatographic (i.e., LC/MS/MS) and ligand binding assays are needed.
• Freezer space, at appropriate temperatures, to store samples.
• An inventory system to track the receipt and storage of the samples.
• A laboratory information management system (LIMS) to track the analyses and resulting data.
• A QA unit of sufficient size to do the appropriate audits and data review.
• People capable of writing the appropriate validation and sample analysis plans, and the accompanying reports.
• A system by which to interface with the clinical or nonclinical data management groups to provide the data in the proper format.
• The appropriate SOPs to govern the laboratory and provide a framework for regulated analyses.
• A system to keep track of all the equipment that requires calibration and maintenance, and people to do this work on a regular basis.

A full development program typically involves several clinical and nonclinical programs running simultaneously, and with multiple compounds in development, the numbers of studies, assays, and systems needed to support them increase quickly. For most companies, the option to continue to add people and equipment to support an increasing workload at some point becomes unrealistic and results in the need to engage an outsourcing partner to, at a minimum, handle the excess workload. Managing outsourcing partners with capacity overflow work only is a tactical rather than strategic approach, and is not the best way to structure an outsourcing relationship. That said, it is a fact of life for many organizations.

Given the realities of limited internal resources, outsourcing can help alleviate issues created by competing intra-project or inter-project toxicology and clinical priorities. Of course, such help comes at a price. Outsourcing ventures are built on both personal and financial relationships. To get the most value from them, you need to be a customer the CRO values. A commitment to larger volumes of work and an established familiarity with client needs results in the CRO providing faster turnaround of data and reports, better pricing, and perhaps a more experienced team of method developers and analysts.

Capacity is ultimately a function of quality and time. Poor quality method development or assay execution can add to the time needed to complete each part of the project and create a capacity crunch where none would have existed had things gone smoothly. Thus, the ability to do quality method development leads to smooth validations, efficient execution of sample analysis and minimal capacity issues whether the analysis is done internally or at a contract facility. In this sense, capacity is directly associated with the capabilities of the bioanalytical laboratory under consideration.

Costs

For an outsourcing relationship to be necessary and sustainable, when all is said and done it needs to add value. This may come in the form of reduced expenses, accelerated time lines, improved efficiencies or provision of higher quality data. Short-term cost savings, while obviously attractive, should be scrupulously investigated to make sure the sponsor is getting what it needs and is gaining value for money.

Developing and managing the cost equation can be difficult and often subject to issues such as corporate restrictions on hiring or capital spending. Outsourcing offers a mechanism to trade the fixed cost of in-house personnel, equipment, and space for the variable cost of dollars out to a CRO. The need or desire to manage fixed costs or maintain flexibility in the face of a rapidly varying or unpredictable workload is often an important consideration in determining the ratio of work to be done in-house relative to outsourcing to a CRO.

Determining the real analysis cost on a per-sample basis both in-house and at a CRO can be complicated. In-house, there are method development and validation costs, sample storage, LIMS development and implementation, sample analysis time, and the equipment and space that it takes to run the facility. In addition, there is less obvious overhead, such as QA involvement, report writing, records retention and archiving, and interfacing with data management groups to get the data transferred in the right format and in a timely way. CROs have similar issues, so the same infrastructure costs come into play.

Cost planning for sample analysis is relatively simple compared to costing the development, transfer and validation of bioanalytical methods. Here the scientific variables may call for additional effort or skill sets compared to the original plan. Such additional method development and validation can be expensive, and is often cost prohibitive for small nonclinical studies. For companies with the capability, these studies are often done in-house, since the upfront validation costs, followed by the analysis of very few samples in many of the small nonclinical studies, is expensive for the sponsor and only marginally profitable (at best) for the CRO. For large, single-species nonclinical studies, or for clinical studies where the same method can be used repeatedly, the upfront development costs become a small fraction of the project costs so, when coupled with the efficiency that a CRO can bring to sample analysis, outsourcing can make economic sense to both parties.

As a general rule, the outsourcing process works best when the sponsor and the CRO each do what they do best. The sponsor typically knows the molecule and the method development process for it very well, and will likely be efficient in developing and validating the methodology. If fundamental method development is required then care should be used in selecting a CRO with a recognized reputation for strong method development capabilities. If this is overlooked then it is likely to be more difficult and time-consuming for the CRO to resolve methodology problems, and will minimally involve rework for the sponsor. On the other hand, CRO laboratories are designed to handle high-volume analyses efficiently and have the people and equipment to readily handle multiple studies or competing priorities. Here is where most bioanalytical CROs shine and typically benefit a drug development program.

A CRO should be able to save costs for a sponsor who has varying workloads. By leveraging flexibility across multiple instruments and scientific teams, the CRO is able to realize resulting cost advantages, all other things being equal. Any time the sponsor is not operating at full capacity, the potential for saving money by outsourcing exists. A valuable economic exercise for the sponsor should be to determine the minimum demand and the associated resources that would be fully utilized in this trough scenario, rather than immediately resource for peak demand. Typically, a point occurs above this minimum at which outsourcing all the additional work to a CRO becomes very attractive. Relative in-sourcing costs and comparative CRO contract costs influence this “cut-point” for a given sponsor/CRO relationship.

Timing

It has often been said that timing is everything, and that certainly applies to bioanalysis in support of drug development. A few months after a study ends, few project teams recall what the total cost of the work was, but all of them will remember if the data were delivered late or the quality was below expectations. Managing time is a critical part of managing both project costs and expectations.

In-house, timing can be an issue when juggling multiple priorities. Competing project priorities may mean one study is delayed at the expense of another. Outsourcing provides a way of mitigating these issues. On the other hand, in-house responsiveness can be very fast, and shifting to a critical priority is a decision that can be managed quickly, often by working with project teams to make difficult priority calls.

A CRO can help manage competing priorities or handle high-volume work where in-house personnel add minimal value. However, there is an associated cost. Outsourcing is a time-intensive process requiring scientific, QA, and operational management resources on behalf of both the sponsor and the client. Approached strategically, with a long-term relationship in mind, a sponsor can gain significant timing benefits when outsourcing projects to a CRO. A structured approach involving long-term planning, regular governance meetings, and effective managerial communication is clearly superior to trying to use outsourcing to fill a short-term gap in resources.

Outsourcing of regulated bioanalytical work has an important role to play in the balance of fixed versus variable costs in a drug development environment. The decision regarding whether, how much, and what to outsource is multi-faceted and corporate size and business strategy influence the decision in ways which will be specific to a given company. In general, however, it is clear that bioanalytical outsourcing done correctly is a long-term investment in sharing of knowledge and skills. To do it successfully requires compatibility of systems and people, and shared and agreed timing and expectations. The process requires constant oversight, excellent communication and flexibility by all parties but when done well it is a powerful and cost-effective means of leveraging expertise.

References

1. The 3rd AAPS/FDA Bioanalytical Workshop, May 1-3, 2006, Arlington, VA

2. Quantitative Bioanalytical Methods Validation and Implementation: Best Practices for Chromatographic and Ligand Binding Assays. C.T. Viswanathan, Surendra Bansal, Brian Booth, Anthony J. DeStefano, Mark J. Rose, Jeffrey Sailstad, Vinod P. Shah, Jerome P. Skelly, Patrick G. Swann, and Russell Weiner. AAPS Journal, Vol. 9, (1), Article 4, 2007

3. Strategies in Bioanalytical Outsourcing. Anthony J. DeStefano. Contract Pharma, Oct. 2004, 48-56.

Anthony J. DeStefano is a principal scientist in the Analytical Global Capability Organization at Procter & Gamble Pharmaceuticals. Stephen Lowes is vice president, science, at Advion BioServices.