By Kate Hammeke, VP of Market Research, Industry Standard Research (ISR)
Many factors are contributing to the complexity of storage and distribution of clinical trial materials as trials in new geographies may entail different regulatory requirements, changes to existing import/export regulations, biologics that need special handling and temperature controls, and cell and gene therapies that will likely bring another layer of new intricacies to the distribution of clinical trial materials.
All of this points toward a need for highly knowledgeable service providers. Drug innovators who need to engage a third-party clinical logistics provider have a variety of options: integrated clinical trial service providers, specialty couriers focused on the life sciences industry, transportation/package delivery companies’ healthcare offering, freight forwarders/integrators with experience across multiple industries, and airline cargo services. Knowing which type of provider will best match the needs of your organization — or a particular trial — can be tricky.
ISR asked 100 outsourcers of clinical logistics to weigh in on their outsourcing preferences and practices when it comes to the various types of service providers in the market. The data show that respondents use an average of 2.4 different types of logistics providers of the five ISR inquired about. The majority use integrated clinical trial service providers (79 percent), specialty couriers focused on the life sciences industry (71 percent), and package delivery companies’ healthcare offering (63 percent). A significantly smaller proportion of respondents use freight forwarders (14 percent) and/or airline cargo services (12 percent).
USE, PREFERENCE, VOLUME, AND SPEND
When it comes to the preferred supplier category, the distribution of responses is much more concentrated. Two-thirds of respondents (68 percent) confirmed that if the choice were entirely theirs, an integrated clinical trial service provider would handle all of their outsourced clinical trial logistics. In fact, more than one-quarter of respondents who use integrated providers (28 percent) currently allocate 100 percent of their outsourced logistics to them; three-quarters of respondents who use integrated providers outsource 50 percent or more of clinical trial logistics to integrated service providers.
This strong preference has a powerful impact. Respondents were also asked to allocate the proportion of clinical logistics activities conducted by each provider type and to divvy up expenditure across provider types. The data show that not only are integrated clinical trial service providers used and preferred by the largest percentage of respondents, but they also conduct the largest proportion of outsourced logistics volume (50 percent), and receive the largest proportion of outsourced logistics spend (52 percent). This means there isn’t much market share for the other provider categories to vie for. Specialty couriers capture roughly half of the volume and expenditure allocated to integrated clinical trial service providers (28 and 26 percent, respectively). Package delivery companies come in third, averaging 18 percent of volume and 19 percent of spend, leaving less than 5 percent to freight forwarders and airline cargo services (each averaging 2 percent of outsourced clinical logistics volume and spend).
Will the share of outsourced clinical logistics secured by integrated clinical trial service providers continue to grow? Quite possibly so. When asked about service providers’ selection criteria, Integrated clinical trial service provider/F Full-service CRO offering topped the list for most important attribute and is considered a top five attribute by 43 percent of respondents. Benefits of working with integrated providers cited by respondents include streamlined processes, a single point of contact for global projects, and reduced vendor to vendor coordination.
* Outsourcing clinical logistics was a requirement for participating in the research. The data reported are not intended to be representative of the overall clinical logistics market size or industry; rather, they are representative of the participants in the study who are active outsourcers.
KATE HAMMEKE is VP of market research at Industry Standard Research.