According to the report the trend is for pharma companies to engage contract research organizations (CRO) and contract development and manufacturing organizations (CDMO) as well as other suppliers “to cover nearly every aspect of drug development from target identification to clinical-trial execution.”

Better efficiency and, importantly for our audience, improved compliance of R&D operations are cited as other key drivers for this significant shift away from more centralized research and development.

McKinsey’s research has revealed that CRO and CDMO spending has grown by 12-13% annually against the backdrop of a 7-8% annual increase in overall R&D spend. And this trend is “expected to accelerate” with executives from leading pharma R&D and supplier organizations projecting a potential increase of 10-30% in overall spending on outsourced R&D.

McKinsey survey results reveal, however, that some outsourcing relationships lack the “maturity” needed to “fully realize the potential gains in R&D efficiency and flexibility.” The report points to five key areas “in which both partners see opportunities to unlock greater value from their collaboration”:

• increased transparency;
• aligned incentives;
• joint data governance and integration;
• aligned operational expectations; and
• improved communication on change orders.

And the consulting firm’s analysis has identified four key enablers as critical to a successful partnership:

• best-in-class procurement and contracting function;
• closely aligned business-procurement relationship;
• involved, efficiency-driven leadership; and
• robust technology integration capability.

One critical element underpinning each of these key enablers is effective communication. It is in this context that compliant and technologically sophisticated communications tools are indispensable. Practical examples of how they can effectively drive the key enablers identified by McKinsey include:

• the ability to comprehensively capture the negotiations and fact finding, including regulatory compliance and risk management assessments, undertaken by the procurement function;
• compliant, comprehensive and easily searchable communications between cross-functional teams that span multiple organizations and various channels employed in the modern workplace;
• comprehensive repositories of data and communications that enable leadership to exercise oversight and “extract deeper insights and facilitate clearer communication with suppliers”; and
• secure, compliant and auditable communications between the parties, including data sharing and project tracking, that mitigate and reduce risk.

The report concludes by pointing out that outsourcing relationships that encompass “a shared vision, joint accountability, governance, and transparency” can, ultimately, “accelerate drug development to address unmet patient needs.”