This tweet recently caught my eye. (I’m assuming pharma here is drug related, including biotech.) We’ve certainly heard about the R&D cutbacks in pharma and lean/backyard/virtual biotech companies need their work done somewhere. But 2/3 of pharma R&D is to be done by outside labs?!
One reason I was caught off guard is my own experience working with contractors/consultants. Although our non-GXP was done by our scientists, we worked with a variety of CROs/CMOs/etc. on projects large and small to get our lead cancer drug into the clinic. During that time, I learned an interesting fact about the contract world: employee turnover is high.* I learned about this reality from colleagues as I researched how to select contractors, but the data back up the anecdotes. From PharmaTimes:
The initial findings from the 15th annual CRO Industry Global Compensation and Turnover Survey show the employee turnover rate at US CROs remained stagnant in 2012, with 18.6% of employees leaving their companies compared with 19.7% in 2011.
While direct costs are likely already built into the contracts, the losses in productivity and/or institutional knowledge can be very real. Contract R&D relationships are driven by the technical (e.g. experience with a particular assay), but in my experience the execution of the projects is dramatically impacted by the PEOPLE. If these turnover rates were internal, you would likely try to identify the causes and fix them. But what happens when these people don’t actually work for your company?
We could debate that whether using ‘high quality’ contractors protects your company but I suspect that there is an intangible feature beyond a good culture where people are well treated and compensated.
For most scientists I know, there is a strong sense of identity with and commitment to their research. We tend to be tribal, associating strongly with the labs of our advisors, our universities, our specific disciplines. Once in industry, many view the holy grail as working on a drug that actually makes it market. Ask scientists who have been in drug development a while and you’ll find many with that on their bucket list.
Many colleagues on the contract side have expressed frustration with not being able to see a project through. Once their work is done, the company moves on to the next stage with another contractor and following the drug through licensing and name changes can be challenging. As the R&D process is broken into ever more discrete pieces, this sense of disconnect from the final product, the drug that may help people, will continue to grow. The build and contract nature of small biotech as companies move from pre-clinical to clinical has a similar impact.
In biotech/pharma, leaders don’t often have to convince their teams that we have a worthwhile and fulfilling mission. As we rely more on contractors, perhaps we can allow those teams to participate more in the journey to patients. Perhaps as public and private companies disclose information to shareholders, we can be reaching out to our extended teams to show them the impact of their work.
*Note: There are features that can be built into contracts to help lessen the impact of key personnel departing.