4 models of drug development programs compared

Perhaps the time has come to re-examine the concept of virtual development and what that really means.  That point-of-view from Greg Dombal, the VP of Regulatory and Clinical Affairs at biopharmaceutical consultant Halloran Group, writing in a recent issue of GEN.

He says that despite the industry’s grounding in science and its need for precision, we are loose with our business terms. For example, if an executive says, “We are running this program on a virtual model,” there might be several sets of criteria that define exactly what constitutes virtual.

Typically in a virtual model, a company hires a select number of internal staff and then contracts the rest of the work to vendors. Most pharmaceutical and biotech companies operate under some level of outsourcing, though, so there needs to be some specifics for where to draw the line between a virtual model and a lean yet traditional outsourcing model.

1. The Sponsor-Vendor Relationship:  Pharma companies and their service providers have a symbiotic relationship. Project leaders and development teams are adept at utilizing contract research organizations (CROs) to expand capabilities by both discipline and geography.
2. The Preferred-Provider Arrangement:  The natural evolution of this sponsor-vendor relationship. Sponsors receive a modest discount on services, and the vendor has priority status in landing new business from them without having to go through a lengthy and costly proposal or bidding process.
3. Risk-Sharing Deals: Range from CROs agreeing to reduce or defer compensation in exchange for equity, to profit-sharing deals, to direct investment in a sponsor company.
4. The Virtual Model: An interesting development because of the evolution of how programs and products are described. For example, a molecule is no longer just a drug candidate but also an asset, a milestone is a value inflection point, and a product pipeline is a portfolio. These terms were once limited to financial descriptions. Now, however, they are used in development situations to facilitate new ways of looking at product advancement.

It is easy to imagine how a virtual team constructed around this concept could improve program efficiency and considerably reduce development costs. Such gains in efficiency could lead to more sophisticated financial models with which to manage risk across product portfolios while helping promising therapies reach patients more quickly.

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