How to Train a Team to Walk a Tightrope?

Steve Jacobs, Chair of the Global Clinical Suppliers Group and President of Global BioPharm Solutions, joins Helen Winsor from Pharma IQ to discuss how to go about creating the best sponsor/vendor partnership and how to balance cost versus service. Listen to the podcast now: A Direct Route to an Optimum Sponsor/Vendor Partnership 
Pharma IQ: I’d like to talk to you about how you go about creating the best sponsor or vendor partnership and could you highlight for us what the main points are to consider?

S Jacobs: The importance of actually creating a great vendor/sponsor relationship is that the industry is actually rapidly heading towards a partnership model because our own clinical supplies group are actually moving towards a virtual business model themselves. We’re getting rid of our operations groups and we’re actually going ahead and partnering more with vendors outside. So the best relationships for business, interestingly enough, actually align with what Deming said back in the early 80s. Deming was the father of total quality management systems and what he said was, end the practice of awarding business on the basis of price tag and instead, minimise total cost, move towards a single supplier for any one item on a long term relationship of loyalty and trust.

So the key is that in order for you to create a really good partnership, you’ve got to qualify your vendor and you do that through references and audits, and you go ahead and make sure that they’re really a cultural fit. Are they collaborative? Do they partner with you? Do they have great project managers? Or are they fast response and is that what you really need? And then once you do that, of course as we all know, we put a technical or quality agreement in place and then, and I’m going to be a little controversial here, stick that in the drawer and literally work continuously to improve the relationship and trust that you have with your comparative supplier. You’ve got to involve them early and often and then give them realistic forecasts and establish the expectations you have for each other early.

The key to this whole thing is making sure that as time goes by and you continue to work together, you do lessons learned and you continue to improve each other and hold each other to a higher standard.

Pharma IQ: Can you explain the importance of developing relations to get the best balance between service and cost, and what are the key problems when this balance isn’t met? Do you have any examples?

S Jacobs: Typically what I see in pharma and biotech, and I know this is slowly changing, is really internal problems with collaboration, what we actually call silos, and that is where clinical operations doesn’t really talk to clinical supplies or the folks in charge of the IMPs, and this poor communication unfortunately leads to poor planning which also impacts the vendor/sponsor relationship and leads to last minute knee jerk demands. Now the challenge with this is, of course, it’s tremendously stressful for the vendor/sponsor relations and really destroys trust. Trust is interesting and I like to classify trust in four ways, and typically if you have these things, you’ll have trust.

The first one is consistency: if you’re consistent, people know what to expect and they’re not surprised. The next one is confidence: if you know what you’re doing, you know you’re going to do it well every single time. The next one is commitment: that’s actually how committed are you to the relationship and to making sure that each of you gets what you need. And then, finally, character. Those are, in my role, the four Cs of trust.

Building trust in this vendor/sponsor relationship, especially for comparators, is absolutely essential. It is what provides the balance between the two groups. Now the problem is when this not met, what you wind up having is demand curves that look like spikes across. You really don’t have any transparency and typically what ends up happening in the long run is if you think you’re saving costs, what you find yourself doing is actually paying higher prices because of this lack of relation and this imbalance. I’ve actually got two great examples of what has gone wrong.

One company actually went ahead and sourced a comparator for a study and because of their internal communication breakdown, what they did not realise was that their company had changed the comparator that they wanted, so they were actually out a little over a $1 million for sourcing the one comparator because the comparator company went ahead and sourced it and then, of course, they didn’t need it. So I think that in the long run the comparator company worked with them to try and get them some kind of a reimbursement, but I don’t know how well that one worked out.

The second one was literally in a situation where a company didn’t have transparency with their comparator vendor and what ended up happening was they waited until the last minute to realise that they did not have enough IMP to go ahead and continue the study in terms of having another campaign for the study supplies. Well, when they then rushed in an emergency fashion to their comparator vendor, what the comparator vendor found was this was a product that was in high demand and very short supply, and there just wasn’t enough out there to support the clinical trial. So the clinical trial actually had to go on hold until they could actually source more material.

Pharma IQ:
How can we use forecasting and planning to allow enough time to source the right comparator and what are the integral steps?

S Jacobs:Forecasting and planning really has become the cornerstone of most organisations’ clinical supply or investigational and medicinal products units. What happened in the past was the only way you could do without it was if you had really, really great relationships between clinical operations and clinical supplies. Now the bottom line is that, with this good forecasting and planning system in place and typically even a small group of people that are responsible for it, the demand for the clinical supplies and the comparators actually eliminates the spikes and troughs that I talked about before and actually smoothes the costing based on the fact that we can actually identify exactly what’s needed, make sure that we don’t actually get too much, and go ahead and make sure that it’s sourced in a timely manner.

What that does is it really ensures that the sponsor companies can get the largest amount of drug made from the largest batches with the greatest expiry dates, and in that situation the integral steps, of course, are having a forecasting and planning group that really understands what the comparator group does, how they need to function, and how much time they need to go ahead and plan to actually get the materials they need to in the industry. They need to understand the relationships the sponsor companies have with the actual OEM manufacturers of the drug they’re actually trying to source and then what they have to do is they have to have a very clear process that’s shared on both sides of the table, both with the comparator vendor and the actual sponsor forecasting and planning group. And if the forecasting and planning group can even do simulations to figure out what the best dosages are, especially for comparators, that actually winds up helping the comparator sourcing vendors even more. 

Pharma IQ: Clearly having a vendor as part of the planning and forecasting team to develop the role is an advantage. Is this a realistic goal and what are the key considerations to set this kind of thing up?

S Jacobs:It’s not only a realistic goal, it’s actually going to become essential to the success of the virtual clinical supplies group that our industry is evolving into. If you really don’t have early and continuous communication and collaboration, fulfilment of comparators is going to become more and more difficult. What’s even more interesting is that in a lot of companies, these companies shoot for the lowest price on comparators and all that that does is it just creates a scramble amongst companies to go ahead and provide the lowest price, but not literally the greatest lots or the greatest expiry dates, and it creates a competitive environment that actually undermines the success of the entire team.

So realistically unless you can go ahead and establish a single comparator vendor and make sure that, if not part of the planning and forecasting team, they are actually a sub-team of it so that somebody from the forecasting and planning team actually communicates with them early and often, then the success of actually sourcing the comparators is in jeopardy. So if you do it, and you do it well, then there really isn’t an issue with the supply chain for sourcing comparators and that’s literally the way the industry is going or literally has to go. It will be interesting to see how well that works because typically what I see is smaller to midsized companies that have a greater agility in process and can get that in place quicker, whereas some of the larger companies actually require more time to go ahead and establish roles and responsibilities, who’s going to do what and then go ahead and establish the teams, figure out who they’re going to work with, go through the bidding process and finally hopefully find a partner rather than just always trying to do the lowest price, and that’s got to be the future or else there’s going to be a lot of companies that are going to be hurting.

Pharma IQ: Looking to the future, do you think that it’s possible that we’ll have a pharma comparator sourcing group or a comparator sourcing consortium amongst pharma and biotech companies. I know that this is something that sponsorship companies are interested in, but there are challenges foreseen. What’s your view?

S Jacobs:This was a really hot topic at a recent comparator conference I was at just a series of months ago and, of course, as you can imagine the comparator vendors were not pleased with the concept and the sponsor companies were really trying to see if this was something that they could float as an idea. And the challenge with this is, as you can imagine with most large companies or even midsized companies these days, liability is absolutely essential as well as intellectual property protection. Now the problem with that is that if you’re going to be going ahead and sharing comparators between pharma and biotech companies in order to ensure that can actually go ahead and use them, there’s going to have to be a certain amount of transparency with regards to intellectual property.

The other thing is there’s going to have to be some really, really good early communications between those companies in order to go ahead and make sure that the companies have the ability to have production in time to support the needs of the other pharma/biotech companies in the consortium. So I see a whole bunch of issues. The first one is legal. Typically legal’s going to get involved and not be happy with this concept, because their job is to protect the liability of the company both from a legal perspective as well as an IP perspective. The second one, of course, is patent protection. That’s going to be also a key issue especially once again with the legal folks. The next one is going to be early and often communication. What I find is some of the larger companies that I deal with are constantly struggling and slowly but surely moving towards a very good collaborative internal environment, but I can tell you the amount of companies that are doing this successfully I can count on one hand, and that’s not good!

So there’s a lot of room and a lot of, I guess, space that they can grow but right now because of that issue of lack of internal collaboration, communication and team work, it’s tough enough to actually get the company to work well inside let alone to network with other sponsor companies outside. So I’ve got to tell you my feeling is that the odds on this actually coming to fruition are amazingly small, and my other feeling is, just from a personal perspective, I think I could get better odds in Vegas or Monte Carlo, so the reality is that I don’t think this is going to happen. I think it was a neat idea, but I don’t think that the comparator vendors really have a lot to worry about.

Pharma IQ: Obviously you’re going to be speaking at our conference towards the end of June. What do you think are the benefits of taking part in a business conference in this digital age where we’ve got so much access to materials online? What do you think are the actual benefits of attending a conference?

S Jacobs: It’s a great question. These days training can take place certainly online or with eLearning. I don’t think I’m necessarily a traditionalist, but the odds of any good conference are twofold: the first one is certainly to learn, but the second one is to network. You’re really only as good as your network or, as I once heard, your net worth is your network. The bottom line is that you go to these conferences not just to learn but to actually meet other people that are having the same challenges that you’re having and either to learn from them how they were actually able to cope and handle those challenges, or even avoid those challenges, and also to establish a relationship so that they can call you if they have questions.

This industry is changing way too fast not to continue to build your network and not to continue to collaborate and identify the folks that are really, really sharp, that can help you and your company out on a consistent basis.


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