Atlantic Research Group (ARG) has become the first U.S.-based contract research organization (CRO) to join up with Pharmaceutical Services Network (PSN), a tightly knit, Netherlands-headquartered group of small to medium-sized CROs in Europe.

The thrust of the network? To provide small CRO service (read: high quality and much personal attention) to small and medium-sized pharmaceutical and biotechnology sponsors, while offering a global footprint. PSN is one of a handful of such organizations that have allied several CROs to compete for contracts that are global but not so massive as to require only the very largest outsourcing organizations.

PSN was launched in 1997 by Michael Gierend, owner and managing director of Medicomp, a small CRO based in a suburb of Munich; and Odette Jochems, owner and director of clinical research for MediServ, a small CRO in the Netherlands. Both firms had more than ten years of industry experience under their belts at the time they came together. Two other CROs were also founding members, but are no longer part of the network.

At that time, trials were beginning to go global. Gierend recalls thinking that players with just one office in one country didn't stand a chance. He also remembers thinking that relying on consultants or loosely affiliated partners all over the globe could be risky. What if their standards weren't the same?

Circle of Trust

The answer, he and Jochems decided, was to start a federation of small, similarly minded CROs, targeting strategic markets and leaders who could trust each other to perform high quality work.

Many CROs—likely feeling the same pressures Gierend was—jockeyed for inclusion. And over time, criteria for entry into the network began to gel. Potential members had to be owner-driven (they couldn't be part of a larger company). Headcounts had to be more than five people and less than many hundreds. Prospective members had to be in existence for at least three years. They had to be willing to open their financial statements, and their financial health had to be excellent. “We didn't want to have someone who was seeking inclusion to the network because he was desperately seeking work,” says Gierend.

Potential members had to have command of their local market's regulations, have a solid grasp of the culture as well—and be willing to share potentially proprietary information with other members of the network. Finally, each member firm had to operate inside geographical regions that 1) sponsors were requesting, and 2) were not already covered by other PSN partners.

Good Chemistry

Mostly, though, they had to get along well with all the other members, as all are expected to interact frequently by phone and email and then meet three to four times a year. “You can check everything, but if chemistry is not right, you can forget the rest,” says Gierend. “At the end of the day, I'm still responsible for what someone is bringing into my project. I need him to have the same ideology and same thinking.”

All network member CROs harmonize their standard operating procedures (SOPs), which are adapted to international ones, so sponsors can feel confident that trials done by one are almost identical to work done by another.

Recent Doubling

In the last nine months, the network has doubled in size, adding four new members for a total of eight. Together, the cluster of CROs offer services in Germany, Austria, Switzerland, the UK, Ireland, Italy, Denmark, Sweden, the Netherlands, Norway, Belgium, Spain, Portugal, Poland and other Eastern European countries. Plus the U.S., “the world's largest and still most important market,” Gierend says.

As managing partner of five-year-old, Virginia-based ARG—PSN's first U.S. partner—Paul Bishop has a huge job ahead. He wants to spread the word about PSN to small and medium-sized sponsors in the U.S. His 17-employee company is ready to take on the influx of work that may come to ARG through the network. (Here's an article we wrote on ARG earlier this year.)

Unhappy Campers

Bishop says that one of ARG's biggest clients, upon learning of PSN, told Bishop that he hasn't been happy with the large CRO he's been using in Europe and is excited to now look into PSN. (Dissatisfaction with the largest CROs is not a new phenomenon; some sponsors prefer working with the very largest CROs.)

Sponsors usually hear of PSN through a member CRO that they are already working with or considering. The sponsor can contract with that CRO as the lead CRO on a trial, if they like. That CRO's participation in the PSN network opens up a path for the sponsor to other PSN members elsewhere.

The member CROs don't harmonize prices. But they do make sure their prices are in the same ballpark and don't conflict with general national pricing rules. However, sponsors aren't obliged to use other PSN members. If a sponsor has a firm they prefer in, say, Sweden, they are welcome to choose that CRO instead, not a member of PSN's alliance. "It's their choice," says Gierend.

Simpler Contracts

There are multiple contracts, but PSN is working on a template for a unified contract that would be used to cover all its CROs on a trial. Sponsors will be able to chose multiple contracts or just one. PSN is also working on hiring its own staff to coordinate global studies (right now, leaders at member companies do it).

PSN's member CROs pay a fee for entry into the network, then an annual fee, then a small percentage of incoming service charges on trials received through the network. With 10 multi-national trials either done or in the final stages of completion, PSN is starting another six to eight such projects over the next year, says Bishop. The network has handled Phase I - III trials. It can handle large Phase III studies, but not mega-trials.

Member CROs have come and gone over the years, some because they didn't prove to be a good fit, others because they were acquired by other CROs. One dropped out due to the illness of an owner.

After all of PSN's new members are fully integrated, Gierend says the expansion will resume. But PSN is not urgently interested in India. That's because many of the large CROs have a big presence there, and also because medium-sized sponsors working on smaller trials (Phase I, II and smaller Phase III) aren't so interested in India. It's more likely that PSN will look to increase its coverage of Europe, potentially in France. Gierend also sounds interested in South America. But the process is a democratic one, with members voting on new areas of interest.

For now, PSN will focus on what it has: a robust network across Europe and its first U.S. partner. And it will continue its white-hot focus on customer service. Says Bishop: “Smaller CROs just provide better service to Phase I, II and small Phase III trials.”

—by Suz Redfearn