Functional Service Provision Model

Business chartsHow can smaller companies – like small to mid-size pharma, biotech and medical device – achieve more scalability and reduce costs by adopting a specialized outsourcing model? How can these companies maintain control over their staff overhead, not to mention the staggering cost of clinical trials?

One outsourcing model that has proved successful for some larger companies is the Functional Service Provision (FSP). This involves streamlining operations by function – Data Management, Statistical Programming, Statistical Analysis, Medical Writing, etc. – to improve efficiency and allow specialist CROs to manage non-core activities.

The FSP model facilitates a scalable, expert team of resources for a particular function and results in improved quality, eradication of change orders, reduced training and greater efficiency. Large pharma and biotech companies have found it can reduce costs by up to 20%. So the question is, can this work for smaller companies?

Small companies won’t need a team of one hundred SAS programmers, but taking a mini FSP approach might be a lot more efficient than creating a small data management or statistical department, or seeking out freelancers when the workload increases.

Using FSP, Sponsors can save on recruitment fees, training costs and HR management time. The CRO is responsible for procuring the required resources and ensuring the continuity of trained resources. Using a CRO, the customer can easily swap out individuals that do not work well in the team.

Perhaps the greatest advantage is that it allows the customer to build a relationship with the supplier, making them a virtual team that is familiar with their requirements, can plan ahead and be there for the long term. Specialist providers, rather than large CROs, tend to be a closer fit for small sponsors because they are more likely to be given the same team every time there is a new study, the level of attention is good, staff turnover tends to be lower, and they are less likely to be stretched by preferred provider arrangements.

Considerations for Functional Service Provision Provider

hA Sponsor must determine which functions are best suited for outsourcing under the FSP model. Ideally, Sponsors should outsource functions in which they are not experts and the activity is not a core competency of the company. It is also best to outsource by product or device so that all data from that product can be kept in one place and in a consistent format.

Consider the following aspects when selecting a provider:

  • Adequate capacity (sizeable team and not over stretched)
  • Trustworthy
  • Good communications
  • Low staff turnover
  • Motivated staff
  • Well qualified and experienced staff to ensure high productivity levels.

The flexibility that comes with FSP puts an end to change orders and budget surprises. Daily rates for “ring-fenced” resources usually end up more favorable than traditional fixed price contracts.

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