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5 Ways Dynamic Contracting Can Accelerate Product Development

Sponsors are harmonizing solutions across multiple complementary services and technologies. According, to our 2022 Health Trends report, the possibilities for acceleration require investments in time and labor as the operating model gets more complex. Biopharma companies have responded by experimenting with different resourcing models and mixes of in-house delivery and staff augmentation, augmented by FSP (functional service provider) or   FSO (full-service outsourcing) models and more. This shift will likely gain momentum as organizations hedge against future supply chain disruptions. This approach can accelerate product development as:

  1. Operations are fully managed in-house with onshore resources. This approach utilizes sponsor’s SOPs and processes, with costs related to headcount.
  2. Third parties provide resources to directly contract with sponsor. This can include any "traditional" clinical research functions and utilizes sponsor’s SOPs and processes. Costs are typically FTE-based.
  3. Offshore operations are established in low-cost countries, owned, and managed by the sponsor company. This approach utilizes sponsor’s SOPs and processes, with costs related to headcount.
  4. “All in one” provider whereby the CRO can undertake all services for a clinical study. This typically includes clinical plus at least two other services and can include an entire “end-to-end” process. Most often, this approach includes project management functions and utilizes CRO or sponsor SOPS and processes. In this case, contracts are typically milestone or unit based.
  5. CRO provides delivery of a defined business process as agreed with the sponsor. This can include “traditional” clinical research functions. Both transactional and logistical operations are mostly outsourced, and cost can be FTE-based or output-based (transactional). Typically, the CRO controls the SOPs in this arrangement.


While no single model seems to out-perform the other industry-wide, there is evidence of a trend toward building a hybrid that blends the advantages of each, building on the consolidation drive of recent years. With a limited pool of partners, biopharma leaders can ensure standardized training on shared systems and—importantly—shared ways of work, creating flexibility to work across and within the models.


Are your teams interested in new ways to collaborate with their outsourcing partners? Read our deep dive on Appropriate Acceleration in Clinical Development from our 2022 Health Trends report.

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