Earlier a company's technical core was believed to be a resource and competency that should be buffered and protected. But nowadays, with the growing complexity of business, research and development (R&D)-intensive companies recognize that they have to collaborate, partner and sometimes contract with outside entities to help with technical development. The outsourcing of back-office functions, R&D and business processes is one of the macro-business trends of the current century.
Biostatistics is an integral part of clinical trials, because clinical trials are scientific experiments involving human subjects and are supposed to produce objective inferences as to the benefit of intervention. Clinical trial data are complex and usually incomplete. For example, recently, behaviour modifications such as smoking cessation and diet are being evaluated by clinical trial methods. People believed beta-carotene and vitamin C would prevent cancer, but clinical trials have shown no benefit. This points out that the medical plausibility should not be accepted blindly. Here comes the role of a statistician in clinical trials.
The most R&D-intensive industry in terms of percentage of sales invested in R&D is the pharma industry. In the pharma industry, innovation is recognized as the mainstay for competitive advantage and is cherished by strong investments in biological discovery, biotechnology or chemistry processes. The drug discovery productivity is partly dependent on internal organization of R&D and firm-level expertise in diseases. However, the chancy and conservative drug discovery process, along with skewed economic returns in major firms wherein a few blockbuster drugs dominate the portfolios, makes it difficult to determine the significance of a specific know-how on any measurable firm-level outcome such as sales, profitability or market share. Interestingly, Pfizer is recognized as having a competency in marketing, Merck in R&D, Eli Lilly for manufacturing and recently for alliance building etc. However, within the literature there has been little exploration of resource-based competencies of these pharma companies due to some reasons.
Today, pharma companies want to enter all major markets of the world with their drugs in a very short span of time and so perform global development programmes that consist of clinical studies conducted in a multinational setting almost all over the world. Biostatistics and data management would be handled by a project biometrical team. Their business will include planning of biostatistics and data management for individual studies and project summaries, generation of standards, smooth and efficient conduct of related activities and corresponding documentation. Some successful firms have a core competency in processes that helps them to clear regulatory hurdles. Statistical analysis of the clinical data is a key point of regulatory scrutiny and hence, biostatistics would have to be developed as a core competence for pharma companies to bloom. Many CROs (Quintiles, Covance, MDS Pharma Services, etc.) are handling biostatistics for the pharma companies. Among the BPO are included TCS, Infosys, Cognizant, Icon, etc.
Role of biostatistics
Though statistical analysis has always played a key role in the pharma industry, it is only recently the drug discovery phase has employed heavy statistical analysis. This hot-off the fire use of biostatistics in discovery is driven by the onset of ample amounts of bioinformatics data that require fairly sophisticated statistical analysis to interpret and validate. In the drug development process, a biostatistician is typically involved in early planning of an experimental study in the preclinical (animal studies) and clinical stages (protocol design). The quantum of a statistician's work lies in analyzing the data.
There are three main stages of the drug development process: early discovery, middle (or preclinical) development and final development to commercialization. The early discovery is frequently licensed in by pharma majors from small biotechs and universities, and the middle stages of late preclinical testing and early human testing is largely process-driven by regulatory and safety issues. Thus the core competence that is recognized as exclusive to big pharma increasingly seems to be focused on the final stages of drug development which includes large-scale, expensive, clinical studies to establish efficacy, regulatory interactions for marketing approval, manufacturing in large quantities, and marketing, sales and distribution of the final product. In this framework, the role of biostatistics is critical to establishing success of the large-scale phase III clinical trials, with results of complex statistical analysis holding the key to regulatory approval to go to market.
SWOT analysis of India as an outsourcing destination for biostatistics
STRENGTHS (S)
1. Large talent pool of statistics/biostatistics graduates.
2. Cost advantage.
3. Rapidly developing wired communications.
4. Stable business environment.
WEAKNESSES (W)
1. Statistics graduates having less knowledge of clinical research.
2. Imprecise documentation system.
3. Non-adherence to time schedules and secrecy modalities.
OPPORTUNITIES (O)
1. Vendors can take advantage of the influx of talent through ‘reverse brain-drain’, i.e. Indian graduates who have worked abroad and are now returning in large numbers.
2. Biostatistics is a rapidly evolving field.
THREATS (T)
1. Expected load.
2. Level of capabilities.
3. Organization structure.
4. Key decision-making proc-esses.
5. Little understanding of the intricacies of global regulatory requirements.
Trends in R&D outsourcing
All drug companies seek to reduce costs and reduce the time to market in a lengthy and expensive product development process. In this high-risk process, where a project could fail at many different steps, it is more attractive to rent or outsource the resources needed at a given stage. For smaller companies involved in the clinical trials process, outsourcing is not a choice but a need, as they cannot afford to build up internal resources with required skills and efficiency.
The CRO market will grow at an annual rate of 14 per cent over the 2009-13 period. This growth is expectecd to be largely driven by cost containment pressures in the global pharmaceutical industry that have encouraged R&D outsourcing. And this increase in outsourcing is particularly interesting, considering that the large pharmaceutical companies view management of large clinical trials as a core competence. For example, Glaxo SmithKline (GSK), a few years ago, restructured its business and R&D units, launching a hub-and-spoke model, where the R&D units were independently organized around the core hub that contained clinical phase III management capabilities, marketing, manufacturing, and corporate functions. Then GSK has created six Centres of Excellence for Drug Discovery, or CEDDs. Each CEDD is dedicated to specific therapeutic categories; each is responsible for taking lead compounds forward to the point where the therapeutic rationale for those compounds is demonstrated sufficiently to justify the start of large-scale clinical trials.
Outsourcing R&D functions is a "buy versus build" decision in most companies. Projects will be outsourced when tasks are readily programmable (for example, in extension trials). When projects are long-term and arms-length monitoring is difficult, the cost of outsourcing may be too high. But for pharmaceutical companies, where the risks are high and capital costs for clinical trials are significant, outsourcing is the apt solution.
(The author is Team Lead - Drug Safety, Tata Consultancy Services)