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OUTSOURCING INSIGHTS OUTSOURCING INSIGHTS By Victor Coker, director of business intelligence, That's Nice LLC Clinical Development rounds out the top five CROs for CROs provide independent development services for the infectious disease projects, with the company's strongest pharmaceutical and biotechnology markets. CROs have scores coming in innovation, followed by regulatory evolved from offering basic support, to providing a wide compliance. range of clinical, central laboratory, and analytical services After a deeper examination of the strengths specific to that meet the present demand of the market and its sponthe leading CROs by therapeutic category, it has become sors. Currently, smaller CROs are consolidating (as defined by revenue market shares) and, coupled with acquisitions, are expanding and adding new services. As a result, there is a build up in early-stage research segments, creating a downward pull on growth rates and a severely price sensitive marketplace. Many management teams within these CROs have simply focused on pricing structure as a primary lever to sustain growth and encourage brand awareness amidst the current constrictive economic conditions. To investigate the validity of this business practice, we reviewed the Brand Index data from the recently released Nice Insight Contract Research and Manufacturing (CRAMS) report. First, we identified the top 10 CROs of which our survey respondents were most familiar — respondents indicated they either know the company well and/or have worked with the company. The companies were as follows (in no particular order): ICON (Prevalere Life Science), Lancaster Laboratories, Millipore, Huntingdon clear that strong regulatory knowledge is highly valued Life Sciences, Nanosyn, Boston Analytical, Covance, EMD for facilitating study execution (and later, market entry) Chemicals, West Pharmaceutical Services, and Capsugel. across regulatory jurisdictions. Expediting the path to We found that the top 10 companies rated similarly on market with inventive methods of increasing productivity the perception of pricing; however, this close match in — such as rodent model diets or recruiting methods for rankings did not transfer over to brand awareness. For in-patient clinical research — is another factor. example, Lancaster Laboratories and Capsugel aligned closely in pricing, rating 5.5 and 5.8 out of 10, respectively. In terms of awareness, however, 42 percent of respondents indicated they were either familiar with or had worked with Lancaster Laboratories, whereas only 20 percent indicated the same of Capsugel. This means that pricing structure alone is not an indicator of brand growth or recognition. Most management teams within the CRAMS industry view marketing as simply a support function to sales, instead of a tool to increase awareness among current and potential customers. Understandably, the problem of establishing an adequate benchmark for marketing ROI can make it a daunting investment. However, our observations from the Brand Index data indicate that the companies with the highest awareness — and thus the most productive pipelines — are those communicating a differentiated value to the appropriate target audience. It follows that the ability to leverage the product or services of an organization through targeted marketing could significantly improve lead generation. Survey Methodology: The Nice Insight Pharmaceutical and Biotechnology Survey is deployed to outsourcing-facing pharmaceutical and biotechnology executives. The 2012-2013 report includes responses from 10,036 participants. The survey comprises 500+ questions and randomly presents ~30 questions to each respondent in order to collect baseline information with respect to customer awareness and customer perceptions on the top 100+ CMOs and top 50+ CROs servicing the drug development cycle. Over 900 marketing communications, including branding, websites, print advertisements, corporate literature, and trade show booths are reviewed by our panel of respondents. Five levels of awareness from "I've never heard of them" to "I've worked with them" factor into the overall customer awareness score. The customer perception score is based on six drivers in outsourcing: Quality, Innovation, Regulatory Track Record, Affordability, Productivity, and Reliability. If you want to learn more about the report or how to participate, please contact Nigel Walker, managing director, or Salvatore Fazzolari, director of client services, at Nice Insight by sending an email to niceinsight.survey@thatsnice.com. Walker 18 LifeScienceLeader.com September 2013