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How COVID-19 Put a Spotlight on the Biotech Industry in Europe

On July 5th, COVID-19, the largest contract research organisation (CRO) in Europe and a key supplier of services to the biotech and pharmaceutical industries, was acquired by private equity firm Welsh, Carson, Anderson & Stowe (WCAS).

The sale follows a clinical trial scandal that prompted the UK government to halt the use of COVID’s services for five years. What lessons can you learn from biotech companies in Europe?

Biotech Industry

Focus On Quality over Quantity

As Innovative Medicines Initiative (IMI), EC Directorate-General for Research and Innovation (DG RTD) stated in its recent report on CROs: “CROs come in two basic types: global players with many thousands of employees and local players focusing on a particular country or region.” COVID-19 falls into the latter category.

It was born in April 2002 out of an initiative by biotech specialists from six leading European universities to establish a CRO that would focus exclusively on service provision for academic spin-offs, public research institutes, and SMEs instead of servicing bigger pharma companies directly.

[“Focus on quality over quantity”: This means CROs should support small companies with fewer resources.]

Quality Comes at a Price

COVID-19 was different from other CROs regarding pricing policies that were among the most favourable in the business. For example, its Standard Business Unit (SBU), dedicated to early-stage clinical trials, had fixed prices associated with each study, subject to a few exceptions (cohorts/populations and imaging studies requiring particular expertise were charged hourly rates).

These principles attracted academic and public research institutes, which preferred to rely on affordable services rather than build up in-house capabilities. The downside was the risk of losing profitability because COVID didn’t have enough volume to spread its fixed costs over large-scale projects.

[“Quality comes at a price” means that you should understand the prices should be high if the quality is high.]

Risk Management

Around 90% of all clinical trials conducted by COVID were for small biotech companies in Europe or single investigator sites; only 10% were for big pharma. As a result, less well-funded biotechs relied on the trustworthiness of COVID’s track record.

But lately, COVID has been under scrutiny for allegations of data fabrication in at least three clinical trials. The UK government is still investigating the case, but it has led to a widespread loss of confidence in COVID’s ability to deliver high-standard services ethically.

[“Risk management” means that you need to have good risk management.]

Knowing Your Customers

COVID-19 understood one thing very well: academic researchers are not business people. They are focused on scientific questions, and they often underestimate the time required to manage clinical trials successfully.

They are so happy when CROs take care of everything from site identification to contract negotiations and data collection. As a consequence, big pharma companies were not interested in partnering with COVID-19. It wasn’t an excellent match to the needs of the industry and was unlikely to become one.

[“Knowing your customers” means that you should know what your customers need.]

The Ongoing Quest for Excellence

The scandal sparked by COVID’s alleged actions raised issues beyond regulatory compliance and brought the responsibility of CROs in ensuring ongoing high standards. Pharmaceutical companies have been under pressure from their shareholders for years to deliver more reliable clinical data while containing costs. This is an ongoing challenge since it requires a cultural shift towards a higher quality standard across phases of clinical development.

Sarah Williams
Sarah Williams

Sarah Williams is a blogger and writer who expresses her ideas and thoughts through her writings. She loves to get engaged with the readers who are seeking for informative contents on various niches over the internet. She is a featured blogger at various high authority blogs and magazines in which she shared her research and experience with the vast online community.

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