Pfizer turns to CROs as it upends huge R&D operation

June 11, 2011

May 26, 2011 — 10:05am ET | By

As Pfizer hatchets billions of dollars from its R&D budget it’s turning to two CROs as preferred providers for outsourcing its clinical trial work. In separate releases Parexel and Icon both announced that they had won special outsourcing status with the pharma giant, a coup in the CRO world.

“This new strategic partnership model (with Parexel) is part of a comprehensive program to sharpen our research focus at Pfizer, and creates a more flexible cost base through outsourcing of certain research and development services. We are creating partnerships for activities that can be performed most effectively and efficiently outside of the company, and have selected Parexel because it is a leader in providing combined technology and clinical capabilities,” said John Hubbard, SVP of worldwide development at Pfizer.

As Pfizer lays off thousands of R&D workers and scales back a research wing which consumed a whopping $9.4 billion last year, it’s turning more to outside companies to handle trials rather than keep everything in house. Pfizer is following a path already blazed by rivals like Sanofi, which has developed a close relationship with Covance. And the change has helped drive a wave of consolidation in the CRO world as companies band together into large global operations that promise to provide a more efficient method for development as they compete for these exclusive deals.

“The two-partner model will simplify our processes, significantly reducing the number of external service providers we use for clinical trial execution, and clarify accountability in risk and quality management,” said Hubbard.

“Today’s announcement is another significant indicator of Icon’s ability to partner with major companies in helping them transform their drug development model and validates the investments that we are making to capitalize on the changing market environment,” says Icon CEO Peter Gray.

Link to article here.

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