Outlook For Clinical Drug Development and Outsourcing With Rene Stephens

Speaker 1:
Welcome to TD Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.
Charles Rhyee:
Hello, my name is Charles Rhyee, TD Cowan's healthcare technology analyst and welcome to TD Cowen's FutureHealth Podcast. Today's podcast is part of our monthly series that continues TD Cowen's efforts to bring together thought leaders, innovators and investors to discuss how the convergence of healthcare technology, consumerism and policy is changing the way we look at health, healthcare and the healthcare system. In this episode we'll be looking at the outlook for clinical drug development and outsourcing. As over the last decade, contract research organizations or CROs have become an increasingly important stakeholder in the clinical trial process with over half of biopharma R&D budgets outsourced to CROs up from less than one-third 10 years ago.
The role in the supply chain is quite critical with the high cost of drug development and importance of time to approval, CROs are increasingly relied upon for a number of services, including trial expertise, site network building and abilities to accelerate KPIs such as study startups and recruitment timelines. With an influx in demand during the pandemic spurred by COVID 19 and heightened biopharma funding, where does R&D budget growth now go and where does allocations go from here? Can CROs innovate their people intensive processes to improve drug development costs and timelines going forward?
To help us discuss these topics and more, I'm joined by Rene Stephens. Rene leads Renata's Consulting, an independent advisory firm to the CRO and life science industry. His experience spans the outsourced clinical trial procurement process, including procurement and contract negotiations during his time at Pfizer and Astellas, as well as business development during his time at Inventive Health. Rene, thanks for joining us today.
Rene Stephens:
Thanks, Charles. Glad to be here.
Charles Rhyee:
Maybe Rene, I know I gave you a quick intro there, but maybe you can share a little bit more about your background and how it's gotten sort of into the industry.
Rene Stephens:
Yeah, absolutely. It's funny, and when I think about that, I was in a meeting about a year ago with a bunch of colleagues and we were having dinner talking about how we all got in the industry. We all have approached this as a small subset within the larger pharmaceutical environment itself, and all of us around the table kind of fell into this industry. There wasn't a defined pathway 25, 30 years ago into the development world itself. You kind of made your way in one way or another and I'm the same way. Back in the early days for Pfizer sildenafil trials, which became Viagra and other studies, Covance, which was called Corning Besselaar at the time, was running those trials on behalf of Pfizer.
They had an explosion of growth needs for people to fill the seats essentially to conduct those studies and to get those done. That opened the door for me and I got in into the CRO industry at that point, learning the business from the ground up as a monitor and doing some cross-training and data management, but didn't spend a lot of time in there because I had more of a business communications background and was interested more in how I could explore that area of the CRO industry in the world itself. Moved quickly into a business development role where I was doing contract management. I was, we call it herding the cats, when a bid request comes in to the CRO, you have to coordinate quite a few individuals to pull together that RFP and to get the proposal out the door.
I did that for a long time and then moved into contract management. Eventually made my way up into the sponsor side as a career path and got into the outsourcing function at Pfizer in New York and did that in a couple of different stints with the company managing the investigator contracting group. We did over 3,000 investigator contracts a year. I also helped support a lot of the phase 2 through phase 4B studies out of New York and out of Groton at the time.
Then from there moved into Astellas. Had other roles as well along the way, but at Astellas as a global head outsourcing and contract management with teams in Europe and the UK as well as the U.S. then moved into for the past five years now independent consulting in the outsourcing and the vendor management and relationship management and contract negotiation workspaces essentially and functions within this larger clinical business operations function itself.
Charles Rhyee:
That's great and brings a lot of experience here and I think very topical to what we're going to discuss. You've been at the ground level watching the CRO industry evolve over the years. Maybe you can help provide some of that context and think about where have we gone from when we think about the origin of the outsourcing model, and maybe you can share for us how you've seen that evolve to how do we get here to today?
Rene Stephens:
Yeah. Actually when I was working on my masters through the GWU in clinical research administration, I did a paper on this actually and wrote about the history of the CRO industry because it really got started based on the fluctuations in resourcing due to failed programs within the drug pipelines. So pharma company has a number of compounds and drugs in their pipeline. They start working on that portfolio. What was happening, as I understand it from many years ago, was that larger companies would go through a period where they had a failed drug and they needed to redeploy or lay off potentially those staff.
That's how the industry really was born was that a couple of people, one, Dennis Gillings, who eventually started Quintiles and was the leader of Quintiles for many years, and Hein Besselaar who started Besselaar and Associates, which became Corning Besselaar and then Covance. They were really pioneers in this industry and realized that if they could attract and retain resources to fill the gaps, essentially when a new program came in into the sponsor that they didn't have resources for, they could actually deploy those. Then really by diluting the risk across a number of clients with the number of programs, they could actually minimize the up and down nature of hiring and then either redeploying or laying off as the sponsor community was going through.
So that's kind of how the industry got started and it's evolved over time now to, I think to your point Charles, where we started, which CROs are increasingly a more important stakeholder in the process. The models that have been used to staff trials and to execute on programs have gone back and forth. We call it the pendulum swing, from essentially a full service type of an outsourcing paradigm to one where you are either piecemealing or a hybrid type of an approach for certain functions and services that are outsourced to a resource-based model. The industry started out on a time and materials type basis where you just assigned 15 people and you charged X amount and however many hours they worked and under contract, that's how you did it.
We moved into a unit based and fixed price structure. There's lots of different models that we use in how we contract for studies nowadays with CROs. Then into the FSP model, the functional service provider model, which is kind of like a time and materials, but within a different set of guardrails and constraints that really focus on the function that is being deployed across a portfolio versus a single study. So if you look at data management for instance, where that one started out, it wasn't as risky to deploy resources for data management if you were doing it across a sponsor's portfolio versus one single study.
So that functional model has grown a number of different ways over the last few years, but it now mixes in with a full service type of model for delivery. You see all kinds of different amalgamations really of the same basic platform which is it takes good people to execute clinical studies and that is still the same today as it was when we started.
Charles Rhyee:
I think one thing that's been very unique, certainly in the last few years, has been the pandemic and what we saw was a significant increase in funding, right? 2021 just saw masses amount of capital come into the industry. I think you saw CROs respond in kind, real growth across the board. So it was a major tailwind. Obviously we are coming off the backside of that and the environment has changed dramatically relative to just a couple years ago. I guess if we look in the aggregate, it's not that different from 2019. What would you say is the state of the CRO industry now post-pandemic?
Rene Stephens:
The pandemic put some constraints on certain trials and access to sites as we all know, with lockdowns and with a lot of restricted access. At first there was a lot of buzz out there in circles about how that was going to negatively impact the portfolios of sponsors and their clinical trials. There was a lot of worry, and rightfully so. I think about how do we keep getting this done? How are patients going to get in to see the physicians and with lockdowns going on and how do we keep that moving? But what happened was everybody kind of pivoted to employing more innovative type solutions to the studies that were in flight and looking at how studies could be launched and continue to keep going even in the face of the pandemic and what was happening.
From my own standpoint, my work didn't slow down. It increased. It kind of aligns to, Charles, what you're saying is that there was an influx. The COVID 19 trials themselves was an influx of work that hit the industry and really bolstered the CROs because the need for staff is still there. We've had this discussion. I used to moderate the Linking Leaders round table of outsourcing colleagues that we'd come together every quarter and we almost every single time talked about the state of resourcing in outsourcing as well as in other functions and how it's a continuing issue that we need good people in here.
So the pandemic really accelerated the adoption or at least the piloting of technology solutions and other creative ways to keep work flowing and keep studies going so that sponsors could continue to progress towards milestones in their launch targets and those types of milestones. There was a question really on the back end of the pandemic as we started coming out of it among colleagues about, well, all these new and these shiny new toys for instance, and things that had gotten taken up during the pandemic itself, would they stick around or would we revert to the mean of doing it the same way that we've always done it?
I think what's been really kind of cool in my opinion is that a lot of this has stuck. It's maintained and people who are sitting in innovation groups within sponsors and who are consulting as well out in the industry and as well as within the CROs and their technology groups and their innovation groups, they are continuing to push these things and to keep them going, which I think actually creates another new segment of the market, or at least expands the possibility of how the technology sector and the innovation sector within research and development can continue to play a big part. I know we're going to get to AI at some point because that's another now hot topic, but.
Charles Rhyee:
I'd really definitely want to jump to that in a little bit here. So obviously we're having this period where an external factor has kind of changed the landscape a little bit. I think a lot of what people are worrying about I think today is that this lack of constrained funding environment, particularly for biotech, and anecdotally we hear maybe even at pharma some tightening of budgets to a certain extent, and maybe that's really just more macro related as it were.
But are you seeing any impact in terms of, I guess any impact related to biotech funding in terms of how sponsors are approaching new projects? Does this create the potential for cancellations in the future? How are you looking at sort of what the potential ramifications of what's now going on let's say about a year and change where at least from public capital markets, we're not seeing a lot of funding? Obviously we still see some from private arenas, but just curious your thoughts there.
Rene Stephens:
It's an interesting thing to think about because when the capital markets started changing with some of the clients I was working with, there was a heightened sensitivity and scrutiny on the outflow on spend and was that going to result in a reprioritization effort or some synergy targets to try to keep the portfolio moving and what does that really mean. I'm kind of like you, Charles, as far as anecdotally, I hear things out there and what I keep hearing is that there's money out there and it's not really being deployed yet. It's not that it's dried up, it's that it is more hesitant and potentially there is a bit more diligence going on before investments are made.
But I haven't seen really a big slowdown in the launch of new studies or the progression of portfolios, at least from where I sit, in my perspective. What I have seen though is a heightened interest really on controlling costs and how do we get the most out of our dollars and our budgets and keep everything in flight. That plays into what I do for a lot of my clients, which is to try to make sure that the costs being presented are accurate and they're fair and that you're getting a good deal, et cetera, and negotiating the right kind of a contract paradigm. So I think there's too many potential targets that are out there.
There's too much going on within the discovery end of science now, and in the bench essentially, that really would say that it's drying up and that biotech funding is on the wane, they're in big trouble. I think the terms may not have been as good as they were before and what you have gotten from the investors before has changed a bit and maybe it's balanced a little bit more towards the middle or even swung more towards the investment side versus the biotech side. That pendulum I think is going to swing back and forth a bit as well.
Personally, there's too many diseases out there and there's too much need. Patients are waiting, as many companies will say in their mantras and their taglines and it's true. I think the continuing innovation and advancements in discovery and how that's working within other areas of the industry, it's going to drive more products into the market and more potential therapies and hopefully cures eventually for some diseases. So I still think positively about what's going on.
Charles Rhyee:
You mentioned earlier about the resourcing continues to always be a challenge, finding good people to come into this. Do you have any concerns that there's any kind of over capacity right now among CROs? I guess the question really is kind of gets to pricing. Do you feel like pricing has swung more back into the advantage of sponsors? I guess perhaps during the pandemic, maybe CROs were a little bit more in the driver's seat. Where do you think we stand in terms of pricing and capacity? I guess capacity's impact on pricing, to be honest?
Rene Stephens:
I think in the recent inflation or relatively recent inflation pressures have hit R&D budgets for sure. That's starting to translate through the CRO contracts and their pricing models that come out. In some ways, I think it's still a little early to tell what the long term impact of this might be or whether it's going to change back into a different... if inflation gets a bit more under control and then what does that really mean? I have seen quite a bit of discussion with sponsors and their CROs about how to address inflation. Contracts up until the last 18, 24 months had been either silent on inflation or had put very generous language in the inflation clauses that I've seen in contracts that didn't really address it because it was low and it wasn't a concern.
Now there have been more discussions about, hey, we're seeing 8%, 9%, 10%, and in certain countries it's even more when you see rates come through that are increasing and that's driving a lot more discussion. I think as it relates to capacity and resources and the number of those in the industry, I haven't seen that really dip at all. Anything I see from layoffs or attrition within the CRO segment itself I believe has been more due to the M&A activity there.
It is a pretty common experience now that when CROs merge or acquires one versus the other, there's a period of disruption and certain sponsors get more nervous about using CROs that have gone through that until they come out the other side because there are, even though a lot of times you know hear that the acquisitions or the mergers are complimentary or that they fill a gap that one had versus the other, there are still quite a bit of overlaps that go on and some redundancies in functions that get addressed over time. But those resources don't just go out of the industry. They're moving to other CROs or they're coming back into sponsor companies.
With the rise of more, and this we did see quite a bit during the pandemic, some have called the war on talent, I call it the war for talent because with all the tech companies and other solutions, point to point as well as platform solutions that have emerged and that are on the scene now, well, they're recruiting heavily from the same pool of resources that the CROs and the sponsors are recruiting from because sponsors go through their own pendulum swings. They staff up, and so they may grow a function internally more because they want more control over it or they think that the quality will be better if they can do it themselves.
Then sometimes market and financial realities start to weigh in more and they start to shed those roles and they transfer them back out. Those people don't necessarily leave the industry as much as they go to other types of providers. So it's still a pretty robust market I think for people who want to get in it and who moved into this industry to be employed and defined work all over the place.
Charles Rhyee:
Then maybe asking the question a little differently, do you think that labor remains a concern? Yes, ability to staff projects, does that remain a challenge?
Rene Stephens:
Yes, I do think it still remains a challenge. We used to see that. I was trying to go there a little bit. I probably missed it a bit with what I was saying about how the recruitment state and resources, but we used to see this a lot and it's been part of the underlying challenge where CROs were poaching from each other to fill the contracts that they had just won or the book of work that they had won or working on with the sponsor and that's that put its own pressure. There was I guess some increases in salary and some inflation of expense around what people are being paid because a lot of nice bonuses and raises were being offered to certain elements or groups in certain CROs to jump ship, and to come over.
That has been impacted by the rise of additional tech and other types of suppliers into the market. So I think the need for resources is still there and it's a big need and how it's being addressed is I don't know is being effectively factored in yet as far as how universities or colleges are putting in play R&D type pathways and educational pathways. When I started and did my masters in clinical research administration, I was the second cohort that went through that and I started that in I think it was 2004. So that's not really a long time necessarily to have an entire program in a university setting.
At GWU at the time, I think it was one of maybe two that I'd heard of, but now there's more of those. I think we need more of that out there so that there are pathways for people coming out of undergrad to move into this industry and time for them to get their bearings in the R&D world. We did see this a lot during the pandemic and we still see that to some degree, at least I do, where there's some over promotion going on because companies are really scrambling to keep resources and trying to control their attrition rates.
So they may be promoting people who are taking on jobs or taking on titles that they might need a few more years before they're really ready for that. We've seen some of that in the quality that's come out, which has driven some difficult conversations between the providers and the sponsors about deliverables and timelines and the quality of those things coming in. So it's a multifaceted problem that is still in existence I think today.
Charles Rhyee:
Before we jump maybe into another topic, one last questions kind of on the market overall. I think I mentioned at the beginning, we were probably over a little over half of all R&D is outsourced today. What do you think the upper limit of outsourcing is or can be? How much of clinical R&D can be outsourced? Is that 100%? Are we at the limit? What do you think the upper limit is?
Rene Stephens:
That's a good question. I don't know if you'd ever get to 100%t really, but there are virtual CMOs out there now and fractional CMOs. There are consulting firms that are offering resources to help augment staffing needs within biotech especially so that you, instead of hiring a full-time CFO or a CMO or even a CEO, there are people and companies out there offering fractional models like that. So that gets you even closer to something that might be 100% outsourced. The design of protocols and the implementation of those and execution of them all the way down through your commercial strategy, I mean, there's been outsourced sales forces and marketing out there for quite a long time, that's nothing new, as well as on the research end of the spectrum.
So it's not inconceivable that you could launch biotech and have really a skeletal crew of experts that guided and drove the whole program itself and you outsource everything else and you don't really have much, if any, internal capacity beyond possibly some baseline bricks and mortars to operate a business in. So I think in certain viewpoints you could outsource everything pretty much within that. Now is that really going to happen? I don't think that's really that plausible, but it's conceivable. Kind of the same thing when you think about technology applications, how far could you really design a fully virtual and technology enabled trial so that you didn't use humans at all in it, except for the patients and the physicians, but all the other functions around execution of the trial could be tech enabled or driven that way? That's I think possible too, but I don't know that that's at least-
Charles Rhyee:
We've heard some ranges of like 65 to 70% seems like a reasonable level that we could get to over time.
Rene Stephens:
Yeah, no, I don't think that sounds crazy at all. That sounds totally feasible that that could be the case.
Charles Rhyee:
You touched on the technological innovation. Obviously a lot of discussion both around AI but also just in this space in general. You've seen a lot of new companies come to market, particularly around DCT, decentralized clinical trials, and trying to offer new ways to create access for both patients and obviously allow sponsors to find patients for trials, maybe reduce timelines. What have you seen so far among this let's say new crop of technology enabled tech solutions or technology enabled services? What's your impression of what you've seen so far coming into the market? Do you think they are helping in recruiting patients faster? Or do you think it's having a dent in drug development costs and timelines?
Rene Stephens:
Well, I don't know about cost yet to be honest, but timelines is I think where a lot of the focus is. Some of that is from maybe from one element of the cost perspective on a DCT level, right? So decentralized trials, if you're doing home health visits or you've got remote or virtual type monitoring going on, remote monitoring's not new. Remote data capture has been around for a little while as well. But the impact on timelines I think is the biggest factor within the technological innovation space and the tech companies that are coming in these days that I've seen. It is about how do you find the patients faster and how do you keep them in your trials though.
So there are companies that are focusing more on the behavioral aspects of patients and how do you interact with them more effectively through handheld devices and tech and that's type of thing and apps to keep them engaged and keep them in the study and keep your data flow on time. I think a lot of that, there was this focus a few years ago, patient centricity was the buzzword and that's still alive today, but now it's being taken over by DCT and now that's even being taken over to some degree by AI and what's going to happen there. These things sometimes, and DEI also, right? So DEI is now coming from the FDA as well and the regulatory bodies to have an inclusion and equity plan in your study design and in your program. That's not necessarily technological, but there will be some technological I'm sure apps and solutions that are brought forward to help address that and to meet that need.
But all of these things outside of how of the more esoteric or relational type technologies that are designed to improve the experience of the patient journey are designed around how do you decrease the timeline, so speed to market and that's really the target. Whether it is cheaper, I don't know. I think it's hard to say. It's a trade-off, right? So you might need less of one thing and it could be a net neutral, right? Cost impact or it could even be an increase, but you can offset a cost increase by proving a timeline reduction. If you can get to market faster as we know, then that's significant.
Charles Rhyee:
Are you seeing that? I mean, I guess the question is first in some of the work that you're doing now, are some of your clients employing some of these DCT models? Have they tried using some of these offerings that are delivering on faster patient recruitment? I mean, some of these companies all claim that, "Hey, we can recruit two times faster or three times faster, our model going out either through social media or through certain other avenues." Curious if you're seeing any signs that that might be the case.
Rene Stephens:
Well, I'm seeing that the promises of those signs are there. Now, this is just one person's viewpoint, right? So there are probably some case studies out there where it is showing benefit to employing these types of solutions and strategies. But I think it will take some time. The thing that I have experienced over my career is that, especially large pharma, but the industry is a bit risk resistant, right? They're risk shy. So taking on a new technology that hasn't been proven by somebody else that's in the public eye, it makes companies a bit nervous. Plus you have a pretty significant investment internally in the qualification of these new suppliers or the new technologies or offerings that aren't resident already or that you haven't already been using.
So you have a quality assurance process, you've got an IT process, the legal review of how these things shake out have become more intense as these applications and solutions have come up into the market. That does cause project teams and project leaders to pause sometimes and to take a step back and either run a pilot and to see how it might work before they fully implement it. I think that's actually what makes these technology providers and solution providers, and not all technology based, but frustrated and probably their investors a bit frustrated sometimes too, is that the uptake or the adoption, it might look right and it might feel right and it might be pretty evident on paper that it's going to work and it's going to save money and time, but the practical implication of it on the sponsor side is a bit slower.
But that's beginning to change, I do believe, because I think there are people from, and I know there are people actually, colleagues who have moved from the service provider side of the equation into the sponsor side of the equation, and they bring with them that adherence to and that willingness to adopt technologies or other types of solutions that impact that those timelines and those functions and make them more efficient. There's an old adage out there that nobody ever gets fired for hiring Quintiles, which is now the IQVIA these days, because they were that for the longest time the biggest, and it was the safe play, and that was what the adage really meant. It wasn't about the particular CRO. It was about the way that things have always been done.
So stepping out of that box is a real risk, especially for the medical directors who own these programs. Their careers might be on the line if the drug fails and it fails because of something that they tried versus something that was tried and true even if it was slower. So it's a tricky situation to be in, but I do believe we are making advancements. It's just maybe not as fast as some of us would like.
Charles Rhyee:
It makes sense that sponsors are risk averse and they're cautious. It might take a little time for some of these to really get more adopted and kind of fits in with the mantra that healthcare tends to lag in terms of certain types of technology adoption. But clearly the focus of everyone these days is this generative AI and large language models. Where do you think that can be applied in drug development? I'd imagine that it does have a lot of potential applications.
Rene Stephens:
I think it does. I was listening to a podcast the other day actually about AI. It's only been around for a few months really, right? But the exponential increase in how it has come out, went from you'd think it might take years for certain things to happen, and now the rate of advancement within the AI space itself is being measured in months and days. I guess one of the things that this podcast talked about was CEOs who two, three months ago didn't even understand what AI was are now thinking, "Oh wait, let's pause hiring." I think I heard IBM is paused hiring of what, 8,000 is the number I heard on this podcast, of back office office personnel for their organization because the CEO believes that AI may actually play a role in helping them avoid that cost and that overhead and those employees.
So it's really interesting how that's all starting to emerge in our industry too. I know that pharma companies are being very cautious around open platforms, right? ChatGPT and the natural-
Charles Rhyee:
That's the closed version, right?
Rene Stephens:
That's right, that's right. Yeah. So there's really some serious concerns and legitimate concerns about IP getting out through any type of an open AI type of application. So the brakes are being put on the use of those open source platforms for sure. Now, that doesn't mean that the technology itself in other areas in a closed loop type system aren't going to be employed and adopted. There are companies out there, I'm working with one that I'm on their advisory board for that are looking at how they can literally reduce the collection and the consolidation of data for patient safety narratives from hundreds of hours into minutes. It's amazing what that really shows that it can do.
I believe there are other applications along the critical path of development that AI solutions like this can be employed. Anything that reduces the churn and the physical researching of cross-referencing papers or data sources that you know have to go through now, or the filtering of different databases and datasets to get to where you're going. If AI can enable that and really bridge the gap, then that does a couple of things in my mind. One, it speeds that process, yes, and it helps get you towards that speed to market type of goal that you're looking for, but it also then reduces the need for resources that you have to have today to do that type of work to get to the point where you can analyze and interpret that data and those results. It helps alleviate that pressure.
We were talking about the state of resourcing in the industry just a little bit ago. I think one of the solutions AI may help with is that area, where you're still going to need people, but if you can start to then find and train and educate people in and resources in the higher end, the value-add end of the spectrum versus the data collection and the consolidation phases, I suppose, that's really going to be a place I think where AI is going to help us too. Even in the outsourcing arena, I'm pretty sure that I'm going to see some solutions come out where AI is going to help us get to a faster paradigm where we can solicit requests for proposals and get bids in that would enable that process and get you a lot faster to the goal of selection and then startup of your study. So I don't know if that helps with the answer, but I think there's quite a bit that's coming.
Charles Rhyee:
Yeah, no, I mean, it's all moving so fast.
Rene Stephens:
Totally.
Charles Rhyee:
I think what we'll be talking about tomorrow maybe could be completely different. Maybe just to close out here, just as you think about the CRO space overall and just where clinical development is going, I guess more specifically the CROs first is what is the competitive... as you advise clients on CROs to work with or not, what differentiates one CRO from another these days? Maybe we can think of the big guys first and then maybe separate from maybe niche players in specific disease categories. But more generally speaking, how do you differentiate the offerings? Because I would generally think they can all generally do the same thing, and probably the big guys, they all generally do it pretty well. Just curious how you look at it.
Rene Stephens:
Yeah. Differentiation, to me it comes down to the quality of the people that you have and your ability to retain them. I say that because the technology that you bolt on, and we've seen a lot of this with the big CROs as well, they're looking to add on services and applications to differentiate themselves one from the other. It used to be what's your therapeutic area experience and are you really experienced in this indication, what's your global footprint. That stuff is still very important within the right perspective of the need of the sponsor and the study itself. But the EDC years ago was new to the scene and there were hundreds of, maybe not quite hundreds, but probably a hundred EDC companies out there that were trying to make their way.
CROs were looking to buy those up. They started buying them up. Some of them went out of business, others merged, and it evolved over time. That was initially a bit of a differentiation, but then all of a sudden all the CROs had some EDC, either a partnership with a provider that was doing a great job or they brought it in-house or they they built it themselves. So I think the runway for differentiation on some of the technologies and some of the shiny new things that you can throw in is limited and it comes back down to your project managers, your data managers, your statisticians, your monitors out in the field, those key people, your medical directors that are overseeing and your safety teams.
We're never going to get away from that, I think rightfully so, because the ability and the quality of the people to keep programs on track, to manage all the chaos that goes on in a clinical trial, things happen every day that can throw you out of whack and you've got to figure out how to keep it on track and keep going. That is the real competitive advantage of a CRO. I know one of the things that I look for when I'm working with a client and we're going through a selection effort is their retention and their retention strategies and their culture and how do they treat their people and what do I hear on the street. Because it's not just that we were talking about earlier M&A and with the big CROs when they come together and there's some disruption, that there's a lot of voluntary attrition in those things too.
I lived through that at Pfizer a number of times when the development organization would reorganize, you lose good people because they get nervous or it makes them uncomfortable that the change that's going on, for them it doesn't work. So how do you keep those people even in the midst of something like a merger or an acquisition from a CRO perspective is a challenge. How do you keep them in when other CROs might be throwing a lot of extra money at them because it's not always about the money. Once you get over, you find that the culture doesn't fit. If the CROs can show us and show me and the team that I'm working with that the team they're presenting has been with them and they're really strong, they've got some depth in the area, those are key things that differentiate.
Pricing, I negotiate that stuff all the time, one against the other. Also running my own metrics and ratios on what pricing looks like. I think that my goal whenever I'm working with a client is to take the cost of the trial out of the picture and the cost from the CRO out of the picture and let them make the decision on the quality and their belief that the CRO that they've got in front of them is going to be able to do the job for them and deliver on time with as little disruption as possible that they can control. So I've had that belief for a long time and I stick to it.
Charles Rhyee:
That's great. I think we're kind of coming up on time here. Maybe one last. I think we talked about the future with ai. Let's close out on the future on data, right? I think with the last 10 plus years we've finally digitized all our electronic health records and it seems like a very potentially exciting area for pharma in particular to dive into this clinical data that probably only until last three, five years have really been able to get your hands around. I think about use cases like synthetic control arm design and or patient identification for trials. How far along are we on that? Do you think that's a real opportunity, both from the CRO perspective, but both as sponsors, right? Is this dataset as potentially useful as some seem think it is?
Rene Stephens:
I think it is. It's interesting to me. I remember a company, I'm forgetting the name of them now, and this was back in probably 2008, '09 or so, quite a while ago now, where they were trying to pioneer the EHRs and the portability of that, right? So as a patient you could take your electronic health record and go wherever you wanted, and then how to translate that or access that within the clinical trial environment. So the work in trying to access and pool and consolidate and enormous datasets like that and figure out how to target patients down to the regional and even the disease state areas, using that data is in some ways still a challenge, but it has a lot of promise because everybody would say, I think, and most people would say that the data is the key, right?
It's always what we look for. Show me your data on everything, on your metrics for your monitoring, for your data collection, for your statisticians and your clinical trial reports. Where does the data come from and how do we use it? That is translated back into how do we access large datasets and pools of data to find new patients or to get people involved in the research process more for recruitment and then for other applications.
But I don't know that it's been completely solved. I think there are companies out there that have good approaches to accessing that and utilizing it, but you do run up against the privacy concerns and you got to make sure that, and we have to make sure that data is anonymized and that you're not putting personally identifiable and information out there or it's that it's accessible. So there's still some hesitation in some corners about really relying on that because of those types of concerns, but an interest in it and I think it's got some promise, but I don't think it's played out just yet.
Charles Rhyee:
Yeah. Okay. Well, that's something we'll definitely wait out for. Rene, really enjoyed having you on. Would love to have you come back again in the future and discuss how we've progressed, particularly maybe on AI. We'll see how much it's really taking over everything.
Rene Stephens:
Every 30 days, we could do a touchpoint, couldn't we, Charles?
Charles Rhyee:
Well Rene, thanks so much. I really appreciate you being on and thanks everyone for joining us for this podcast and look forward to having you join us for future TD Cowen Podcast. Thanks everyone.
Rene Stephens:
Thanks a lot.
Speaker 1:
Thanks for joining us. Stay tuned for the next episode of TD Cowen Insights.

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