The era of outsourcing has enabled the pharma firms to hire third party vendors to perform non-core processes at lower cost and higher quality. In this context, global pharma companies are taking a serious look at their performance of pharmacovigilance (PV) activities. A recent study demonstrated that between 1998 and 2005, there was a 2.6 fold increase in serious adverse drug events reported to the US Food and Drug Administration (FDA), and a 2.7-fold increase in fatal adverse drug events. Clearly, the early detection of drug safety issues can help avert public safety disasters. Early detection can also help save pharma companies billions of dollars. The industry, however, will need to ensure high quality PV operations at sustainable costs.
Maturity of PV operations
Four areas of PV operations are particularly important for success. They include:
■ Processes and procedures
■ Information technology
■ Organisation and decision making
■ Performance measurement
A PV maturity model developed by PRTM Management Consultants helps to evaluate the practices used in each of these areas at each stage of maturity - from basic compliance to operational excellence. The rigor and sophistication of operations improve vastly at higher stages of maturity in each area.
A survey of 26 global pharmaceutical firms (including seven of the top ten), conducted by PRTM, a management consultancy firm, in 2007 indicates that the industry largely functions at stage 2 of its PV maturity model. Finding qualified staff is perceived as the biggest organisational challenge facing drug safety handling, followed by increasing productivity. Firms focusing on productivity reported the regular use of local contract research organisations to meet variable demand.
A similar earlier survey had indicated that most companies with sizeable PV outsourcing programmes reported that cost reduction was their main driver. Capabilities typically considered for outsourcing include data entry, case processing, reportability assessment, follow-up and reporting/distribution in both clinical trial and post-approval drug safety. So far, most respondents focused on outsourcing a large portion of their data entry from post-marketing surveys.
Pharmacovigilance as a service offering
Indian companies are well positioned to reach the performance bar set by current global players. Two groups of providers - local contract research organisations (CROs) and traditional business process outsourcing organisations (BPOs) offer PV services in India. These two types of companies differ in background, scope, scale and global footprint. CROs have an established history of working with pharmaceutical companies and are well versed in managing drug development through all the stages, employing medical practitioners with experience in clinical research. BPOs, on the other hand, are better equipped to handle professional services at a much larger scale and breadth. Therefore, they are in a stronger position to ramp up their operations if required by global accounts.
A 2007 PRTM study of PV outsourcing capability in India found that 12 of the 31 representative service providers surveyed had large-scale capabilities. The study concluded that while the country's existing capacity is still emerging, it is maturing rapidly. New business models are fast developing, as Indian companies organise to meet their clients' operational scale and scope requirements. Most of the providers are expanding their PV experience, scope and scalability to facilitate the growth of future offerings. Companies lacking current capabilities expressed interest in seeking partners to grow their operations.
Suppliers seeking to promote their PV capabilities should be able to provide detailed information on several criteria. Size is an important consideration, including the number of physicians, because high-end PV work, such as case processing and reportability assessment, requires a great deal of medical expertise. Other criteria focus on overall experience and productivity measures, such as the number of adverse events (AEs) and periodic safety update reports (PSUR) handled by the vendor both in total and per reporting period (on a full-time equivalence basis).
Criteria related to processes, IT resources and infrastructure are also good indicators of the vendor's operational capabilities to track and report product safety information. Other key considerations include demonstrated global operations, along with an established market presence in the country of the client's headquarters.
Capturing the opportunity
Currently India is poised to become the destination of choice for the outsourcing activities along the entire value chain of drug safety. The country has four key advantages. They are:
■ There is a large talent pool of graduates with a life sciences background that can be trained in drug safety
■ India offers a considerable cost advantage, as labour costs are one seventh of those in US or Europe
■ Wired communications, a key success factor in outsourcing knowledge-based industries, is rapidly developing in India's urban centres, including instances of world-class connectivity
■ India offers stable business environment, which is indispensable for conducting risk management functions like PV that require a great deal of attention and precision
Indian companies interested in pursuing pharmacovigilance must start with the usual due diligence by assessing the market opportunity versus their existing capabilities. Then, to address the gaps, they need to address certain factors like:
■ Expected load
■ Level of capabilities
■ IT system
■ Organisational structure
■ Key decision-making processes
■ Performance metrics
■ Transition time to the next level of PV maturity
The PV maturity model can guide outsourcing vendors in developing functional services that fully meet global standards and requirements. Indian companies aiming to secure large pharmaceutical accounts should consider expanding their global footprint, including their operations into other low-cost international destinations. Alliances with other CROs and BPOs should not be ruled out. It is also important for Indian suppliers to establish front-end offices in each of the key markets. As their volume of business with multi-nationals increases, these suppliers will be better positioned to reap the benefits of operational synergies and global economies of scale.
The ability to hire and train the right human resources is key to developing world-class PV services. Vendors in India can take advantage of the influx of talent through 'reverse brain-drain' - i.e., Indian graduates who worked abroad and are now returning in large numbers. In addition, by tapping the expertise of outside advisors experienced in the contractual, operational, organisational and governance aspects of pharmacovigilance, Indian companies can fast track the PV learning curve.
Clearly, pharmacovigilance is a rapidly evolving field that presents important opportunities for CROs and BPOs to build world-class functional services and for pharma companies in India to improve their product development process. While the PV business in India is still emerging, it has the potential to mature rapidly, given the demonstrated interest by global firms in outsourcing PV work to India.
(The authors are with PRTM Management Consultants)