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CROs
Table 1. Qualifying CRO Partners (Step 3)
A. Get the Paperwork in Place (Confidentiality Agreements, etc.)
numbers of test articles, numbers of replicates, the extraction process, its
related analytical process, the testing completion criteria, and finally, the
mechanism for reporting the study's results. A fixed price quotation would
B. Supplier Audit, Focus on Quality Systems
address aspects of timing, such as project milestones.
C. Financial Audit
The significant positive point of the fixed price quotation is that the exact
1. Available financial models
a. Project-based
financial commitment is clear and predictable. However, extractables can
b. FTE Model
be notoriously unpredictable and it is questionable whether the cost of
c. Hybrid
completing a study can reliably be predicted upfront. Organizations may
2. Compatibility of financial systems
be inclined to view contract modifications unfavorably. Managing the
D. Technical Audit
1. More detailed review of resource inventory
process of contract administration may consume time and resources that
2. Detailed review of methods and procedures
are better spent on the actual execution of the study.
3. Competency evaluation
Another financial approach is an FTE model, by which the contracting
process. In some cases, the qualification process, particularly its technical
laboratory essentially contracts for a fixed portion of the CRO's capacity.
aspects, may require that a considerable expense be incurred by one of
For example, the contracting laboratory may purchase a certain level of
the parties. The magnitude of such expenses and the responsibilities and
support over a defined time period (for example, 5 FTEs per month for
obligations for those expenses must be established and documented. If
a full calendar year). Such a model provides the contracting laboratory
laboratory studies are required as part of the technical audit, then the
with a certain amount of flexibility in terms of the deployment of such
study design and the data reporting process must be established. Under
purchased capacity to meet the specific needs of the contracting
certain conditions, additional documentation must be in place before the
laboratory at any given time. For example, the activities in one month may
qualification can be executed.
be such that the contracting laboratory primarily needs chromatographic
support, while the next month it might need technical writers to complete
Supplier Audit
study reports. Presumably, such flexibility would allow the contracting
As noted previously, pharmaceutical companies have established internal
procedures for auditing and qualifying their vendors. Typically, the
primary focus of a supplier audit is the CRO's quality systems, although
other operational aspects of the CRO may also be examined. As an
organization's supplier audit process may have been developed to deal
with suppliers of materials instead of suppliers of services, it is possible
that the process may need to be modified somewhat to deal with an
E&L CRO. It is reasonable to expect that the spirit and intent of a contract
organization's supplier audit process will be exercised in its audit of an
E&L CRO.
laboratories to shift priorities between activities and between projects
without the burden of contract adjustments. From the perspective of
the contracting laboratory, the challenge of managing this type of FTE
approach is the management of the work stream so that all the resources
are utilized in slack times and no more than the available resources are
used during peak times. From the perspective of the CRO, the challenge of
managing this type of FTE approach is having the flexibility and capacity
to deal with the contracting laboratory's changing and shifting priorities,
as well as dealing with the financial issue of not having all activities being
billed at the same rate.
A third financial approach is the hiring of staff through a CRO and then
Financial Audit
placing the staff within the working laboratories of the contracting
Understandably, an E&L CRO will expect to be paid for its services. The
contracting organization will desire to procure those services at what it
considers to be a fair market price. The financial audit is an opportunity
for both organizations to iron out the details of their financial relationship.
While the quality audit seeks to find and address weakness or issues within
the CRO's quality system, the financial audit seeks to establish the rules for
organization. While the staff is managed by the CRO and the work is
performed consistent with the CRO's standards and procedures, the
work is performed with instrumentation and facilities provided by
the contracting laboratory. Such an approach may be attractive to a
contracting laboratory that has the facilities to support a larger staff in
addition to a project load that requires a longer-term CRO relationship.
the financial engagement between the two organizations and serves to
One could envision that a hybrid approach could provide both the
establish and document the financial expectations of both organizations.
CRO and the contracting laboratory with the financial framework that
An important aspect of the financial audit is to establish the cost basis
for work performed for the contracting organization by the CRO. It is
noted that there are a number of standard practices in terms of this
aspect of the financial relationship. One standard practice is to quote
facilitates efficiency and effectiveness. For example, the two parties might
develop a FTE-based relationship at a sustainable level and could choose
to manage "excursions" (e.g., emergencies or short term bottlenecks) with
fixed-priced, activity-based projects.
individual jobs or projects. For example, the CRO might quote a fixed
In addition to establishing the financial model that the CRO and
price for performing a certain extractables assessment. One presumes
contracting laboratory will work under, the financial audit is the proper
that the fixed price quotation would be based on a well-defined study
time to deal with any inconsistencies between the partners' financial
design that enumerates the relevant aspects of the study including the
systems (e.g., establishing payment terms).
Pharmaceutical Outsourcing |
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Seqens eBook
Table of Contents for the Digital Edition of Seqens eBook
Contents
Seqens eBook - 1
Seqens eBook - Contents
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