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change in drug development. Industry observers Michael Schlander [5] and Jenny Hone [6] have pointed to various factors such as loss of capitalization, cost containment, increasing therapeutic substitutions, and shorter patent lives as being among some of the key influences on pharmaceutical companies' decisions to downsize in order to operate more efficiently and flexibly. |
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Downsizing inevitably means having to do more with lessless staff, less space, less money. For drug development companies, it can mean lower R & D budgets, the loss of in-house expertise in key therapeutic areas, and fewer resources with which to mount large-scale, fast-track projects. This can make it difficult, if not seemingly impossible, for clinical groups to put together the right mix of resourcesMDs, statisticians, CRAs, medical writersto develop new products successfully. |
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Adding to the pressure of doing more with less is the increased globalization of drug development. Since most compounds are now being developed on a global basis, a company needs not only the right mix of skills and experience, but also the right people in the right countries. The ability to get to market on time may depend on the ability to carry out studies in different parts of the world simultaneouslyand few companies today have the resources to do that efficiently, if at all. |
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These circumstances may be specific to drug development, but their effect is the same as that of the general trends toward downsizing and globalization: a greater willingness to make up for lost resources by contracting to CROs to carry out drug development projects. |
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III. Contracting Out Versus Contracting in: From Vendor to Virtual Corporation |
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A. The Potential for a New Relationship Between Sponsor and CRO |
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The use of a CRO is hardly revolutionary; pharmaceutical companies and other drug developers have been farming out work to contract organizations for years. What is different is the potential nature of the relationship between the sponsoring entity and the CRO, specifically the potential for the CRO to become an integral and vital part ofan extension of, reallya company's drug development team. |
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Of course, there will always be times when it is perfectly appropriate simply to contract out certain aspects of a drug development project, without regard to the potential for extended involvement on the part of the CRO. But in a downsized, globalized environment, sponsors also have the opportunity to consider the possibility of contracting inor compensating for reduced staff, resources and expertiseby finding a CRO with complementary experience and making that CRO an integral part of the drug development project team. |
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