Effective Vendor Oversight: A Fundamental Element of Drug Development


Of all the potential drugs being developed today, it’s likely no more than five percent will make it to market. On top of this high failure rate, complex protocols and stringent regulatory requirements—while necessary to ensure safety and efficacy—have greatly increased the burden of process, documentation and data collection. This is, at least in part, why so many BioPharma companies depend on vendors to conduct some of their most complex and sensitive development activities.

In fact, the industry spends nearly $50 billion a year on outsourced services. With an investment of that size, it’s critical to make sure those services meet expectations. But many sponsors struggle with helping their internal staff make the transition from study management to vendor oversight.

The ability to oversee outsourced activities in a way that delivers optimal performance and minimal risk requires an entirely different set of strategies and skills than running a clinical trial. And once a sponsor’s internal team has the right training, it will still need the metrics and leading indicators to proactively identify risk and reliably predict timelines and costs. Without these tools, there is no way of knowing if the value being achieved meets the objectives that drove the decision to outsource in the first place.

To help ensure a maximum return on outsourcing investment, sponsors can use the following best practices:

  • Start with the right contract. Make sure vendor agreements are fit for purpose. They should be clear about deliverables and expectations and easily understood by the people who need to implement them. Then make sure they’re operationalized in a way that’s consistent with their original intent. What if a contract is out of date or if those initial operating ideas just don’t work the way they need to? Consider renegotiating. It’s important to keep outsourcing contracts up-to-date with best practices. Other industries do it all the time.
  • Establish clear lines of accountability. Remember that regulators will evaluate the effectiveness of oversight against what sponsors said they would be doing. Simplify as much as possible. Determine and clearly communicate who is in charge, who to go to with questions, who resolves conflicts, who approves deliverables and who approves changes to operating strategies.
  • Document requirements and expectations. Even if there hasn’t been a lack of vendor oversight in the pharmaceutical industry, there has been a lack of documentation. In the absence of documentation, there is no way to prove adequate oversight has taken place.
  • Monitor performance. Establish in advance what successful deliverables will look like, how often they are expected and what interim measures of success are going to be evaluated. Use metrics and key performance indicators, not raw output, to measure progress against risk plans, quality plans, project plans and customer satisfaction criteria. Use audit techniques to evaluate quality.
  • Communicate constantly. Sponsor companies should not assume a vendor knows what’s most critical if business drivers change, which happens more often than any of us would like. And be prepared to bring new team members up to date if needed. Proactively manage frustrations. They will not go away just because you ignore them. Most importantly, ensure all project staff are trained to use these standards. Otherwise, they are likely to default to the way they’ve always done things.
  • Remain flexible. Encourage vendors to suggest alternative ways to get the job done. Make maximum use of their experience, but also continually assess the maturity of their processes and the health of the relationship. If necessary, renegotiate critical terms in the contract to reflect newly established oversight practices.

Effective oversight begins with the realization that vendor resources are an integral part of the project delivery team. Appropriately conducted oversight is the most powerful tool a company can use to ensure the return on investment from outsourcing.

Join me to discuss how you can assess and improve oversight of your drug development vendors during an ISG Smartalk™, October 18, 1pm ET. Register here: The Science of Clinical Vendor Oversight: How to Ensure Performance and Mitigate Risk. Or contact me directly for further information.

About the author

Fran works with global and regional biopharma and contract research organizations to streamline and optimize all phases of drug development and clinical sourcing. She helps identify gaps in alignment, implement practices that deliver measurable efficiencies and increase the value of outsourced relationships for all parties. Fran provides both broad insight and specific strategic and operational expertise on clinical outsourcing, service provider selection and engagement, service integration, governance, operational excellence and utilization of metrics.