Purveyors of clinical trial happy talk would have the industry believe that every clinical trial is an alliance of organizations with the permanence and seriousness of NATO—that every outsourcing engagement is a marriage of equals.

Think again, says Joseph Anderson, principal associate of Waife & Associates. The Boston-area clinical trial consultancy specializes in process change and is not one to use jargon or faddish language. We last wrote about the firm here.

Anderson says the outsourcing shift was originally rooted in the desire to minimize the fluctuations in human manpower needed at various stages of the research process. But right from the start, he notes, there was unhappiness at the way services were provided inside research-driven firms.

When outsiders offered the same services, it was enticing and alluring. “There was an internal dissatisfaction with services being offered by internal departments,” Anderson told the annual meeting of the Society for Clinical Data Management in Minneapolis this year.

But guess what? Just moving work to new providers did not address the core issues. “Problems that folks thought they were leaving behind are still with us,” Anderson says ruefully.

The P-Word

Part of the trouble, he believes, is that control of a clinical trial can be surprisingly fluid, surprisingly unresolved. Governance is not always explicitly defined. “A lot of our relationships were based on a cost-saving model,” Anderson says. “There was no clearly defined governance. That has caused problems for us all along.” One simple governance issue that can be surprisingly thorny, Anderson said, is who gets to decide what happens next at a particular point in the trial.

Nebulous terminology, he suggests, is also causing conceptual problems. Does the sponsor use a contract research organization (CRO), a functional service provider (FSP), an offshore service provider? Whatever. “I wish you would all stop using the word ‘partner,’” Anderson said. “Because you’re not. As long as there are two parties, one providing services, one paying the bills and taking the risk, 'partner' is wrong nomenclature that will confuse us.”

He went on to say that there is a make-believe quality to some outsourcing discussions. Such conversations may never be grounded in the reality of the business relationship. “Part of the reason we are having trouble with governance is that we are kidding ourselves that a service provider is on an equal footing with a sponsor,” he said.

CRO Reassessments

A common epiphany about outsourcing at many sponsors of research, he says, is that distance and multiple organizations working on the same project do not necessarily raise the level of productivity. Some trial professionals, Anderson says, confess that We didn’t execute all that well when we all sat on the same floor. Why would it work better when we never see each other?

So some of the central questions facing every company doing clinical research are timeless, eternal. How do we get a large clinical trial team working well together? Do we have the real operational expertise we need?

Is outsourcing in the current model truly saving sponsors money? Anderson says the issue remains unanswered, due to the complexity of all of the costs related to a trial. Says Anderson: “As the ultimate costs, the real costs, begin to be threaded out, we may well see a reassessment of what has been done, and see ourselves talking about the same topics once again.”

Ordering Change

One proverbial elephant in the room, a large smelly animal that no one cares to discuss in detail at any industry gathering, is the change order. Anderson did not flinch from exploring that unmentionable topic.

From a CRO perspective, the change order may be the only thing standing between it and a financial loss, protecting the CRO if a sponsor changes its mind for the 17th time. In such circumstances, the CRO will be able to recover the cost for honoring an infinite number of requests and changes in the scope of the trial.

Except, Anderson says, that the contracting process has become a protracted chess game, locking sponsors and CROs into mutually trapped and unsatisfactory positions. “Many contracts I observe are eating up the teams that have to live with them,” he said.

Sticker Shock

On the sponsor side of the table, there is disbelief that the actual cost of honoring a change order is as high as the number quoted by the CRO. Says Anderson: “Change orders are eating up the teams. Change orders go right into the teeth of, ‘I need a change, I didn’t think it was going to be that high.’ The method of contract administration is wearing us down.”d9A2t49mkex

Anderson says a new approach is needed. While it may take time to arrive, he said, a unit-based approach to contracting would protect both sponsors and CROs, allowing more time for productive work and less for contractual haggling.

“We should be describing the obituary of the current model. There has got to be a better solution,” Anderson says. “There are unit-based models that create clarity and visibility that make the change process easy.”

Editor's note: After the conference, we checked in with Anderson to assemble a separate, forthcoming article exclusively about unit-based clinical trial pricing. Informal or on-the-record .(JavaScript must be enabled to view this email address) on change orders are welcome.