Sally-Anne Whybrow, healthcare business development manager, Siemens Financial Services, UK examines how smart financing can help CROs invest in financially-sustainable technology.
Key insights:
- CROs have been compelled to reconsider strategies, the result being an increase in hybrid models where traditional clinics operate in parallel with decentralised trials.
- The digitalisation of processes is driving modernisation in the industry and accelerating trial speeds, and it is clear that a significant investment in equipment, software and infrastructure, is needed, for CROs to remain competitive.
- Smart financing offers three major advantages: technology expertise (real business outcomes); breadth of financing solutions (meets every organisation’s needs); and smooth, sophisticated processes (allows seamless use of smart finance).
The pursuit of innovation fuels the progress of competitive markets. For the pharmaceutical industry, this has driven a trend to outsource R&D activities to Contract Research Organisations (CROs) . CROs boast therapeutic and geographic expertise, are cost-effective and, perhaps most importantly, help to speed up the research and delivery process of new medicines.
However, with pharmaceutical, biotechnology and biomed companies of all sizes pursuing outsourcing relationships, CROs are often faced with financing and cash flow problems as they oversee the various phases and multi-faceted challenges of the drug delivery process. On the one hand, large pharmaceutical corporations need a CRO to manage the whole drug development process independently, while on the other hand, in order to promote sustainable growth, small and developing biotech frequently require the assistance of smart financing tools and infrastructure.
CROs in the UK and impacts of the pandemic
While the CRO market is international by nature and contributes to global healthcare research, the UK has established an impressive footprint. According to the Contract Research Map, there are almost 1700 labs operating in the UK. In England alone, clinical research is worth £2.7 billion a year, and the UK pharmaceutical industry invests £4.3 billion a year into R&D.
Clinical trials – a key aspect of R&D – are predominantly undertaken in Europe with the UK leading the pack in early clinical research. Prior to the pandemic, research from the Association of the British Pharmaceutical Industry (ABPI) recognised the UK as a world-leading expert in the areas of heart disease, immunology and conditions affecting the nervous system.
As part of the global response to the pandemic, research on chronic illnesses and diseases was suspended as scientists focused their knowledge and attention on the urgent need for a COVID-19 defence. Yet the industry faced a challenge on two fronts: social distancing measures severely restricted its ability to perform clinical trials, all the while being under pressure to conduct more trials to aid in the development of a COVID vaccine. Thus, the impact of the pandemic can be felt equally in the design and delivery of clinical trials as well as the quantity carried out.
CROs have subsequently been compelled to reconsider and change strategies, the result being an increase in hybrid models where traditional clinics operate in parallel with decentralised trials and environments. These decentralised trials offer increased patient convenience and engagement, as well as reducing the time required to carry out the trial by an estimated 15%.
Continuous studies amid the successive lockdowns and changing restrictions were made possible via hybrid clinical trials and remote patient monitoring, which also resulted in cost reductions of 15-20%. Furthermore, it is estimated that 50% of clinical trials will be either hybrid or decentralised by 2024, simply put, growth prospects for the CRO market will not be hampered by the lifting of restrictions. This means those organisations that leverage digital technologies in their approach will be best placed to take advantage.
Scaling the drug development pathway
While the pandemic inflicted severe disruption to the day-to-day CRO market, the effectiveness of the industry’s COVID-19 response has helped propel the market to a swift recovery. There is now an elevated standard for solution delivery that CROs of all sizes will be expected to meet. These CROs must therefore rapidly scale their offering in order to deliver these standards and tackle the existing backlog of R&D work delayed by the pandemic.
With this in mind, the pace of future research is now expected to be higher with tighter deadlines where CROs are required to react with total flexibility. This can only be achieved with access to digital ready and high-end clinical chemistry equipment such as high-resolution mass spectrometers that can simultaneously quantify thousands of samples enhancing precision, depth, and throughput. Additionally, smart automation software is breaking down paper barriers, facilitating seamless scheduling, data collation and sharing as well as improved safety and security measures.
The digitalisation of processes is driving modernisation in the industry and accelerating trial speeds, and it is clear that a significant investment in equipment, software and infrastructure, is needed, for research organisations to remain competitive and meet the heightened expectations for seamless drug delivery.
Finance as a key enabler
Many CROs are turning to smart finance to enable sustainable pathways to investment. Smart financing – offered by specialist financiers – enables the acquisition of technology and equipment for competitive advantage, in a way that is financially sustainable and tailored to the organisation’s specific business and cash-flow needs.
Smart financing offers three major advantages over generalist finance: technology expertise which understands real business outcomes; a breadth of financing solutions which can meet every organisation’s exact needs; and smooth, sophisticated processes which makes the use of smart finance seamless and easy. Healthcare financiers who have an in-depth understanding of the drug research and development technology and its applications can provide these tailored financing packages.
Conclusion
While COVID-19 has quickened the pace of research, it has also slowed down crucial studies and clinical trials for other illnesses and diseases. To meet these and future challenges, CROs require high-end digitalised equipment and technology that can enable processes to get back on track and satisfy the increased demand for their services.
Preserving cash flow is a key concern for any business. This is why more and more CROs are turning to smart finance options from specialist financiers to enable investment. Specialist financiers collaborate with CROs to adapt finance periods and conditions in order to fit with strategic goals and outcomes, drawing on their in-depth expertise of the drug research and development industry.