Top Ten Ways For Sponsors To Manage Risk Better With CROs

1.      Due Diligence. During early discussions with a contract research organization (CRO), a sponsor should make broad requests for information (RFI). By asking probing questions and delving into the experiences listed in the CRO's glossy brochure, the sponsor can better understand the CRO and identify general legal or financial troubles that could impact the CRO's ability to help the sponsor. Information requested from the CRO should include turnover rates, interactions with the U.S. Food and Drug Administration (FDA), FDA inspections results, demonstrated relationships with sites and investigators, as well as client references and sample standard operating procedures.1 Publicly available financial filings, press releases, and other general corporate information also should be reviewed.

2.      Accountability. Recently regulators and academia have focused their attention on the issue of CRO accountability; some suggest that CROs have fallen through the cracks.2 For example, Rachel Behrman, Director of the Office of Critical Path Programs at FDA, states "CROs are accountable to the FDA but it is not clear whether their accountability is through the sponsor or directly to the FDA."3 Because of that ambiguity, sponsors must remember the ultimate responsibility for clinical data—and risks associated with poor quality research—falls on them, despite their ability to delegate (or even transfer) particular requirements to a CRO. One important way to help ensure accountability is through contractual obligations.

3.      Contracts. A sponsor must have a valid contract with a CRO before the CRO work begins. That's easy to say, but in practice, a CRO often starts performing services before the contract and statement of work are negotiated and executed. This can be problematic to both parties for legal liability, scope creep, and payment reasons. While a detailed discussion of contractual provisions is beyond the scope of this list, such contracts should contain not only important financial and legal liability provisions, but also provisions that give the sponsor control over its study—such as audit rights, personnel changes and training, quality procedures, and study delay provisions.

4.      Statements of Work. Before executing a statement of work, sponsors should ensure it includes three things: detail, detail, and detail. Although this sounds obvious, the unfortunate reality is that the addition of detail typically requires input from other sponsor and CRO personnel and beckons more discussion—thus, slowing down the negotiation process. Although it can be tempting to decide that the parties will simply "figure out the details later," that approach almost never pays off. A comprehensive statement of work gives the sponsor an opportunity to lay out its expectations for the CRO, which, in our experience, avoids countless headaches down the road.

5.      Training and Oversight. Sponsors should not assume a CRO will always properly train and supervise its employees. In one case, inadequate CRO oversight may have contributed to patient deaths.4 To mitigate the risk of bad outcomes, sponsors should confirm they have sufficiently trained the CRO, and the CRO, in turn, has appropriately trained both initial and subsequent team members. A recent article in the New England Journal of Medicine noted that the turnover rate at some CROs can reach 100% during the life of a project.5 Fortunately, sponsors can reduce the impact of turnovers on their clinical research through contractual means—such as getting the right to approve individual study personnel assigned to their clinical research, including personnel added later to the study team.

6.      Quality SOPs. Standard operating procedures (SOPs) addressing quality help ensure the CRO will perform its work efficiently and in compliance with good clinical practice. Sponsors can require the CRO to follow the sponsor's SOPs,6 or pick a CRO that has established, detailed and reliable SOPs that embody the sponsors' vision. Either way, by exercising greater control over the procedures used in the study, sponsors can improve the integrity of a clinical trial and, ultimately, the reliability of the study.

7.      Quality Metrics. As with SOPs, performance and quality metrics can help ensure compliance and efficiency. Specific measurements may include database error rates, analysis of non- or under-performing sites, final protocol to first patient enrolled, and last patient/last visit to database lock. However, sponsors should be cautious about tying these metrics too closely with payments to the CRO and inadvertently encouraging cutting corners.

8.      Auditing. Sponsors should secure broad audit rights. For example, the scope of an audit may include quality assurance, personnel, facilities, processes, data, and certain financial records. The CRO should be contractually obligated to remediate all adverse audit findings or suffer contractual or financial penalties. Some CROs will refuse to give competitor CROs access to facilities and personnel, so sponsors may be forced to consider creative alternatives. 

9.      Continuity. With today's trend toward outsourcing, an investment in developing a long-standing relationship with one or more CROs can yield important dividends in the future. For example, as a sponsor develops a preferred CRO, communication and efficiencies typically improve, and relationships among the sponsor, sites, investigators, and the CRO grow stronger. Some CROs offer "preferred client" programs where sponsors obtain rates that are discounted in proportion to the amount of work for which they contract.

10. Currency Rate. Finally, although it seems like a technical point, sponsors should carefully consider which currency rate will govern their relationship with the CRO in a global study.7 This rate may affect not only CRO payments, but also monies for sites, investigators, and, potentially, subjects, if the CRO administers such payments. In today's rapidly fluctuating global economy, exchange rates could produce million dollar differences in cost. By establishing a specific currency up front, sponsors will better understand the actual cost associated with their research and, thus, can budget accordingly.  


1Anonymous,  Responses to New Eng. J. Med. Article.  Applied Clinical Trials.  (Oct. 24, 2007).
2Miriam Shuchman, M.D., Commercializing Clinical Trials — Risks and Benefits of the CRO Boom.  357 (14) New Eng. J. Med. 1366 (Oct. 4, 2007).
4David Evans, Michael Smith and Liz Willen, Big Pharma's Shameful Secret. Bloomberg Markets.  (Nov. 2005).
5supra at note 2.
6Frank Henke, Outsourcing the Biotech Trial. Applied Clinical Trials.  (June 1, 2008).
7Greg Richard, Preferred Providers Face Outsourcing Challenges. Applied Clinical Trials.  (Nov. 1, 2007).