Written by Bill Finger, Managing Director, Kineticos
As we see more pharmaceutical and biotech companies looking to outsource central lab testing, it is important to understand the dynamics of the relationship between the two. Laboratory data are vital to clinical trials, and is a complex element in bid requests. We’ve conducted a fair amount of primary research in this space and the data has consistently shown that professionals within the pharma/biotech industry prioritize quality over cost when it comes to partnering with central labs. This trend is particularly important for central labs to consider when submitting their bid requests..
There are a number of approaches pharma/biotech companies could take for obtaining outsourced lab services. Let me share two scenarios, both with missed potential for successful outcomes:
Scenario 1: The bid request is forwarded with little understanding of what is needed. A vague synopsis of the trial is sent to vendors and contacts are unable to answer questions or provide additional value due to missing information.
This approach to a bid request is common and often results in precarious conditions moving forward. Vendors typically make minimum assumptions, thus keeping the bid price low. Also, when bid requests fail to include specific information, such as a site list (i.e., only geographies) or testing details, budget problems can occur. Important questions go unanswered (a few examples are listed):
- Are the tests fully defined?
- Do you have primary or secondary cities?
- Can samples be batched or do they need to be tested in real time?
These gaps can lead to inaccurate budgets as well as present challenges for the study set-up teams. Additionally, the budget will increase as the details of the study are defined during set-up.
I have also seen examples where the original study budget is exhausted only partway through the study; vendors that take the path of offering the lowest pricing will quickly exhaust the original study budget. This tactic is not recommended as unexpected price increases are typically not well received by customers.
Another option is to help the customer understand the importance of more information for accurate quotes. As their central lab partner, you want them to succeed. Explain your shared responsibility in the outcome of their trial. This will bring about a more accurate proposal and foster a stronger relationship.
Scenario 2: The customer forwards a bid request with no protocol or synopsis, but with a listing of needs.
On the surface, this scenario appears better for the lab, because the customer listed their needs. However, this often forces the lab to make several assumptions, many of which are beneficial to the lab. The problem is that customers often do not know what they need.
For example, when working at a central lab, there was an instance where a customer of ours did not really know specific reporting structures for oncology testing, although they had listed their needs. Consequently, as we approached the first data review and were asked about reporting parameters, we needed to delay the data review. Here, I saw the importance of avoiding assumptions and sharing accurate information.
I understand that there is almost always urgency because the bid is due and the sponsor wants it now. They do not want to go through the process of defining their needs. Additionally, the lab may not want to take the time to go through a process of defining the scope to ensure the budget is aligned with the client needs. However, spending more time upfront clearly defining the critical needs of the sponsor can save countless dollars and hours down the road.
There are certain best practice steps to help pharma/biotech and central labs establish a mutually beneficial partnership. Deliver value by taking the time to fill information gaps. Create templates and explain your process. Offer your expertise to customers to help build common understanding. This creates trust, and shows that you are what your customers want: an experienced central lab that puts customer needs first.
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Bill Finger, Managing Director of Kineticos’ Diagnostics Practice, brings 20 years of diagnostics and laboratory experience to the team. His team is focused on helping diagnostic companies maximize their commercial potential at the corporate and product levels while ensuring companies operate in an efficient manner.